Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, October 15, 2019

Partnerships and sponsorship are shaping the eSports business

The massification of games generates a new market with a lot of money in dance: it will generate US$ 152 billion in 2019, with more than 2.5 billion players worldwide. The spectators are around 194 million and would reach 276 million by 2022.

The global gaming market will generate US$ 152 billion in 2019 and there are more than 2.5 billion players worldwide. The data of Newzoo, a consulting firm specialized in gaming, forecasts a phenomenal growth in a market that has 194 million viewers this year and whose forecasts yield 276 million by 2022. China has 767 million players, (the population of the United States is 327 million). In fact, Asia dominates with a 47% share, while North America represents 25% and Latin America 4%.

Mexico ranks 12th worldwide, beating Brazil, and is the country with the most profitable gaming market in Latin America. It is the country with the first university center specialized in electronic sports, which is developed at the Monterrey Institute of Higher Education Technology (ITESM). The market value of the videogame industry in Mexico reached more than US$ 1.371 billion in 2018. While the sector has not yet achieved the international prestige of traditional professional sports leagues, it spreads and expands intensely in the country.

Sponsorship investments are likely to be a signal for the growth of this market. Partnerships between technology providers and investors confirm this: Paris Saint-Germain (PSG) partnered with Douyu TV, a Chinese eSports streaming platform and Mastercard partnered with Riot Games, an American video game developer to launch tournaments together.

The traditional in the techno sector are not far behind. Amazon and Google compete for a piece of cake, with tools for video game developers that allow cross-platform competitions or solutions to be transmitted over the Internet. That's what side b of this explosive growth is about: face-to-face events, which still have a big legal vacuum in the region. In Argentina, for example, FIFA (owner of the licenses) does not authorize the use of games with their rights in face-to-face events, although some big brands such as Coca Cola, found a way to sponsor these meetings with “exhibitions” of games, which are allowed.

In Argentina, there are about 19 million gamers (43% of the entire population) and it is the third most important market in the region, with US$ 450 million generated in 2018 and a projection of US$ 495 million towards 2019.

The Electronic Football Association (EFA), with a presence in Latin America, Europe and the United States has a total of 80 teams at its headquarters in Argentina, behind Brazil, which has 250. Traditional clubs participate, such as Argentinos Juniors, Independiente and those that grow the most, according to Ezequiel Mansilla, administrator of the EFA Argentina, are the second division teams inside, for example, Río Cuarto, Puerto Madryn and Salta. The association has 31,000 users and is one of the groups with more official teams competing in eSports in the country.

But since gaming is all in dollars, national prizes can reach $ 50,000, a significant sum compared to what they deliver in international tournaments, as explained by Julian Oros, creator of eSports Argentina Players. The Fortnite World Cup in New York presented a prize of US$ 3 million. Second place went to a 13-year-old Argentine, who took US$ 900,000.

Franco Colagrossi is the first professional player, hired by the River Plate Athletic Club and represents the institution in the main tournaments in the world. Until that moment this figure did not exist (most have sponsors but no fixed salaries) and their contract includes 7 hours of daily training (with a large theoretical part with studies of movements and tactics) and has a sports psychologist oriented to eSports, the official told Convergencialatina

Traditional sports entities, such as the Argentine Football Association (AFA) do not want to stay out of this digital community and this year it became one of the 16 founding associations of the FIFA eNations Cup. And the Copa Libertadores already exists regionally and the South American Cup, although Conmebol asked to change the names to the American Champion Cup and the Latam Cup for rights. The TV channels are also involved: ESPN + broadcasts one of the main esports events in South America, the Latin America South Clausura Cup of the League of Legends, produced by the Argentine arm of Spain's Mediapro.

Technological Companies: For technology companies, the shaking of eSports forced them to rethink special strategies: Asus created a subdivision in its brand and created “Republic of gamers”, dedicated to commercialize peripheral products exclusively for players and focused on the technical needs of each game. Martín Mai, Brand Manager for Argentina and Uruguay, explained to this media that the economic situation led them to delay launches but are planning to dispatch more than 1,000 units in the local market.

In Telecom they decided to associate the content of eSports with their Flow entertainment platform, integrating it as a new vertical, Silvana Cataldo, Communication and Entertainment Manager, told Convergencialatina. In addition, they were in charge of presenting the first professional videogame league in the country with LVP (Professional Video Games League) as an ally and from their platform they transmit exclusive materials, live competitions and content on demand specific to the development of the league.

They plan to incorporate more specific videogames for use on mobile platforms (such as Clash Royale or Free Fire) and other PC / Notebooks such as Fortnite or League of Legends. The performance of the broadcasts of La Liga Master Flow matches on Cablevision Flow channel 601 had more than 30,000 views and they expect to double the audience in the short term.

The road goes to the professionalization of the sector, and will surely include 13-year-old boys. The main barrier for players is Internet connections, where latency time is key, especially in games that include shooting.

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