The eSports industry, presently unregulated, allows sponsors to negotiate directly with players and event organizers, thereby turning its explosive growth into an opportunistic sphere for all parties involved. However, this freedom continues to stoke various debates regarding unbalanced ecosystems, ethical concerns of advertising for underage consumers and a need for guidelines to ensure fair competition.
In an era of intense transition, the entertainment industry has seen a dramatic shift in its viewership trends. The surging popularity of eSports — competitive video gaming — has taken the world by storm, causing ripples of change that extend beyond simple spectatorship. As eSports continues to gain traction, the surge in viewership has sparked an ongoing conversation concerning regulation and sponsorship in this rapidly growing sector.
The eSports industry, worth over $1.1 billion in 2019, according to data from gaming analytics firm, Newzoo, has shown enormous potential to become an even more lucrative sector. The expansion of this industry has been catalyzed by the rise in digital communication and technology, the COVID-19 pandemic that drove people indoors, and of course, the unbridled enthusiasm of avid gaming fans the world over.
With an estimated 495 million people tuning into eSports in 2020, this sector is not only attracting a staggering number of fans but also sparking significant commercial interest. Interestingly, the COVID-19 restrictions have further given eSports an unexpected boost, with traditional sports viewers turning to eSports for entertainment during sporting hiatus.
However, the influx of viewers has led to intense debates regarding sponsorship regulations. The lack of a governing body to oversee this industry’s explosion leaves it ripe for exploitation and unregulated advertising. Advertisers drawn by the impressive viewership numbers look to capitalize on the emerging audience demographics, mostly younger people who typically shun traditional forms of media.
According to Nielsen’s data, eSports sponsorship is currently unregulated, meaning sponsors are free to negotiate directly with tournament organizers or individual players without any standards or restrictions.
Critics argue that this lack of oversight leads to an imbalance in the ecosystem, where bigger brands can overshadow smaller, endemic sponsors who have been supporting eSports players and tournaments for years. Furthermore, without regulations to ensure fair competition and equal opportunities, growth in the eSports market could become stagnated, dominated by a select few.
Also, ethical concerns arise with unrestricted advertising in eSports. With a significant portion of the eSports viewer demographic being teenagers or younger, industries like alcohol, gambling, and junk food have sparked debates for using eSports to target underage consumers, flouting advertising guidelines that exist within traditional sports spaces.
In the UK, a survey by the Royal Society for Public Health revealed that children and young people are regularly exposed to marketing for unhealthy food and drink products through eSports. Similarly, gambling advertising in eSports, especially ‘loot boxes,’ has attracted significant scrutiny worldwide.
However, some industry insiders argue that the absence of rigid regulations presents opportunities. It allows for a uniquely dynamic sphere that would be stifled by the restrictive policies applied to other mediums. This freedom to negotiate directly with potential sponsors allows the parties involved in eSports – from players to tournament organizers – to make the most out of sponsorships, providing an exciting, accessible avenue for brands to reach new demographics.
The eSports industry is making strides in self-regulation. Industry associations like the Esports Integrity Commission (ESIC) and Esports Certification Institute (eCI) strive to establish best practice standards. ESIC focuses on maintaining integrity in competitions to avoid cheating and other forms of manipulation, while eCI is developing a standard for individual industry professionals’ qualifications.
The debate on eSports sponsorship regulation demonstrates the sector’s growth and the challenges it brings. While concerns over unfair competition and ethical implications are legitimate, the unique nature of eSports provides for dynamic opportunities. Striking a balance between these two facets is crucial to the industry’s continued growth. One thing is certain, as eSports evolves, so too must its practices, its standards, and its rules — all under the watchful eyes of its millions of viewers around the globe.
Sources:
1. Newzoo Global eSports Market Report, 2019
2. Nielsen’s eSports Playbook, 2020
3. Royal Society for Public Health Report, 2020
4. Esports Integrity Commission
5. Esports Certification Institute
