As advertisers grow wiser about gaming, esports companies are stressing community over metrics

As brands and marketers become more familiar with esports, they’re less likely to be wowed by the sector’s flashy productions and high viewership. To keep sponsors interested, esports companies are leaning into soft metrics such as community engagement over viewership and the other traditional forms of measurement — for better or worse.

Esports companies might be struggling to turn a profit in 2024 — but esports, as a form of entertainment, is still growing steadily. Between 2022 and 2023, hours of competitive gaming content watched online increased by 160 million, according to Stream Hatchet’s annual esports viewership report. Interest in tentpole esports events such as February’s Six Invitational has also grown year-over-year, reflected in both rising ticket sales and ballooning streaming numbers — and yet none of this growth seems to be moving the needle with brands, which have only become more wary about committing marketing dollars to the space.

“It’s not that people have got smarter per se — maybe some have — I think it’s that now they’re in a position where they actually need to interrogate this more, because it’s not the shiny new thing,” said Malph Minns, managing director of the agency Strive Sponsorship.

More than the numbers

Trustworthy or not, marketers are no longer moved by pure esports viewership numbers, no matter how impressive they might be. They’re starting to understand that the esports audience is not a monolith, but rather segmented into numerous smaller fandoms based around specific games, teams and creators. High viewership is not necessarily the same as engaging meaningfully with these communities.

Last month, for example, Ubisoft’s Six Invitational broke viewership records — but hundreds of thousands of the event’s viewers came via official co-streams by individual Twitch streamers such as Nicholas “Jynxzi” Stewart. With that in mind, astute marketers might find it more cost-effective to partner directly with those individual creators rather than the larger esports leagues or teams that hired them to restream their events.

“If you want to find that North American ‘Rainbow Six’ audience, you could work with Jynxzi to meet them,” said Joe McMahon, associate director of gaming and esports for the agency Wavemaker. 

To convince brands that working with them is still worth it, esports companies are stressing their viewership and follower numbers less, instead focusing more on building strong connections with specific gaming communities. The resulting high engagement — and the positive brand associations that come with it — are currently esports companies’ most attractive and unique selling proposition.

“My USP is the number of times they engage — where they are, who they are or how persuadable they are,” said Minns, putting himself in the mindset of an esports company. “I’m not competing on reach — I’m competing on something else. I need to tell that story, because that story is the one that’s going to help me unlock the spend.”

Translating community

One esports company that has leaned into community engagement is Luminosity Gaming, which has invested thousands of dollars specifically into the competitive “Super Smash Bros.” community over the past year. By signing some of the game’s most popular players, sponsoring its official annual rankings and organizing a series of in-person tournaments, Luminosity has effectively become one of the centers of this community — and is now able to sell it as an opportunity directly to interested brands, though Luminosity representatives declined to share the specific pricing scale for its esports inventory.

Luminosity’s investment in the Smash community has already paid off. In January, for example, the company has partnered with Amazon MGM Studios to promote the film “The Beekeeper” through Luminosity’s in-person tournament series Make Moves — with community specific activations such as a video of star Josh Hutcherson playing the game, which aired before the tournament’s final matches. At the moment, Luminosity’s Twitch channel is one of the most-engaged on the web, according to the measurement platform Esports Charts. 

“It wasn’t because ‘The Beekeeper’ came to us and said, ‘we want the Smash community.’ They came to us and said, ‘we’re looking for a male audience that’s interested in this type of stuff,” said Amanda Rubin, evp of brand solutions at Luminosity parent company Enthusiast Gaming. “So we’re the translator. A brand is like, ‘we’re looking for this age, this demographic, these interest groups, where should we go?’ And we’re like, ‘well, we’ve got this community that really would resonate, and we can do really cool stuff.’”

Uncertainty ahead

As some brands grow more cautious about spending in competitive gaming, esports companies have managed to recapture some of the magic by leaning on their deep engagement and strong community ties. But this approach, while useful, could give esports companies trouble if they want to scale up further and capture a larger chunk of brands’ marketing budgets. 

In past years, esports companies sold themselves to prospective sponsors as a marketing opportunity on the level and scale of traditional sports. In 2024, it’s become clear that this is not the case, so esports orgs are pivoting — with some success — towards a focus on their communities, and all the soft metrics that come with that. But fandom can only be stretched so far, and brands that want to reach gamers at large, rather than specific gaming communities, might be better served by looking beyond just esports orgs.

“When it comes to the viewership, that’s where the scale comes — and that’s a different partner that you’d be working with,” McMahon said. 

The recent shutdown of Rooster Teeth, announced earlier this week, presents a cautionary tale for companies looking to trade on the engagement of their fandom. In spite of a rebrand last year, the long-running media company was unable to find a buyer for its gaming and nerd culture catalog, though owner Warner Bros. Discovery is still looking to sell it off in individual parts.

Whether or not the company succeeds, the demise of Rooster Teeth shows that a passionate fan base and strong community connections are not necessarily enough to keep a media operation afloat.

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