The top priority for the esports industry in 2023 is to diversify revenue streams to reduce reliance on sponsorship. In an interview with SBC, Warren Tristram, Head of Games, Lotteries and Esports at Nuvei, spoke about the role sports betting can play in monetizing the esports audience.
The esports industry needs to resolve this issue within the next 12 months. For too long, this industry has relied on sponsorship for its income. Other sources of income never materialized despite a significant increase in viewership.
It’s time to monetize the audience
The biggest problem facing the industry today is how to monetize your audience. Esports teams and brands have been successful in attracting large followings as the sport has grown in popularity. but the cost of fan share and success, especially player salaries, was hung by the mere increase in prize money, immeasurably higher. With all of this, the cost of fan share and success, especially player salaries, is rising in ways that cannot be covered by increased prize pools alone.
Esports companies have turned to sponsorship deals to generate additional revenue. The research shows that 89% of the industry generates some or all of their income from sponsorship deals. 77% percent of esports companies said they expect sponsorship revenue to increase over the next 12 months, yet only 45% of the esports companies surveyed are currently reporting actual profits. Sponsorship alone cannot make up for the deficit.
Unsurprisingly, monetizing a growing audience is a priority for the esports industry, but it’s not easy to do in practice. Fearing to lose much of their hard-earned audience, operators almost never charge to stream the esports content that fans are accustomed to watching for free. Therefore, another solution must be found.
Two-thirds (65%) of industry representatives say the difficulty of audience monetization is their top concern when considering the future of the industry.
The esports industry is ready to accept sports betting
The esports industry is actively looking for new ways to generate income, and it may also be rethinking its stance on sports betting.
The vast majority of e-sports companies (53%) believe that betting is important for the future industry. For comparison, less than a quarter (23%) believe that betting will not play roles in the future. Companies depart from the existing idea that the age of the main audience, the absence of a global governing body and a tendency to contract matches made e-sports and betting unacceptable.
Two-thirds (67%) of companies cite league and game publisher restrictions as one of the top three barriers to esports betting growth. More than half of the industry (53%) said it was the biggest drag on growth.
Audience monetization through sports betting
Today, only 15% of esports companies believe that sports betting currently plays a role in their bottom line. So there is plenty of room for growth as the esports industry embraces sports betting more. This allows for other ways to generate income such as affiliate marketing and revenue sharing. New content related to sports betting can also provide sources of income.
Successful monetization also includes optimizing payments to address many of the challenges facing the industry today. This includes managing international payments more efficiently, finding the right balance between convenience and security at checkout, and adding payment methods to meet customer expectations. With updated payment processes and the introduction of sports betting, the future of esports will look even brighter.
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