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Esports market update 2018 Franchising and audience growth provides commercial confidence in the longevity of esports licensing programmes.
As a consumer phenomenon, esports has continued to rapidly grow its passionate fanbase on a global level Tom Power of PowerStation Studios explains.
As a consumer phenomenon, esports has continued to rapidly grow its passionate fanbase on a global level. The heightened exposure of esports as a mainstream entertainment industry has resulted in a positive change in consumer perceptions in most global regions. Improvements in both IT infrastructure and urbanisation across the LATAM, APAC, Middle East and African regions have also aided its progression. This coupled with the next generation of fans having experienced esports as a natural phenomenon, means that global audiences are predicted to only keep on growing. In 2018, the total number of people who were aware of esports has reached 1.6 billion people, up from 1.3 billion in 2017.
As a business opportunity for brands, esports is now entering both an interesting and critical phase towards its maturity. There have been a few key accelerators in its transition, including expanded viewership through new formats and franchises; the change in perceptions surrounding mobile esports; and the increase in investment and sponsorships from brands. Not only is esports losing its outdated stereotypes, but its financial potential is now resonating well for both investors and brand owners alike. So, what’s been key to changing the industry perceptions on the commerciality of esports? Simple - the proven method of Franchising. Back in 2017, the introduction of franchised esport leagues marked a pivotal moment in the commercial evolution of esports. The change all began when major publishers Blizzard Entertainment and Riot Games both announced their intention to implement a franchised-based competitive league structure for both of their esport series (Overwatch League (OWL) and North American League of Legends Championship Series (NA LCS), respectively). Previously, prospective teams had to qualify to earn a place in the competition and faced the risk of relegation and funding uncertainties.
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In the franchised system, however, new teams were created who had their competition placement secured as a permanent fixture for multiple series to come. The aim of this was to help encourage the continued growth of each competitive series via stability and fan-support. For most instances, these new teams are linked to specific geographical locations which in turn, has helped them win over the hearts of local fans. Within the realm of traditional sports, franchised leagues are nothing new. Just a quick glance at either the NFL, MLB and NBA and it’s easy to see why commercially speaking, a franchised system offers a lot of benefits. The New England Patriots and New York Yankees are both permanent fixtures in their respective leagues. Regardless of how well they play, they’ll always remain within their leagues unless their owners decide to move them. By removing the relegation stages, franchising provides a safety net for the teams; it ensured that if they don’t qualify, large fan bases are not left without a team to support. It also helps to entice broadcasters and streaming services (e.g. Twitch & YouTube Gaming) to broadcast live events via the position of readilyavailable exposure to passionate audiences and the opportunity to monetise via grudge matches between