Esports As A Marketing Engine
Judge competitive leagues by what they return to the game, not by team enterprise value
- Difficulty
- Advanced
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 68%
Robbins and Lasky converge on a blunt reframe: esports is marketing. For a team it can legitimately be a way to legitimise a new brand - one hundred thieves used a franchise slot in League of Legends to establish credibility alongside content and apparel businesses. But for the most part the value accrues to the game itself. Thirty million people watching a world championship go back and play more and buy more cosmetics; when the Chinese team won worlds, Riot's people were throwing confetti because it represented a very large unexpected revenue opportunity in skin sales. That logic only holds where the underlying game is a forever game with an incentive to stay alive indefinitely. Robbins's objection to the Overwatch League was structural rather than aesthetic - a sixty-dollar packaged good trying to be an esport has misaligned incentives from the start.
Origin
Extracted from the Acquired discussion between Blake Robbins, who spent five years advising sports owners entering esports, and Mitch Lasky on where esports value actually accrues.
Core principles
- 01Esports is marketing; treat the spend as a marketing line, not an asset class.
- 02Value accrues to the game, not usually to the team.
- 03Only a forever game can justify a permanent competitive ecosystem.
- 04The dream of turning pro is what makes viewers into players.
- 05Every sport has its own economics; 'esports' as a single category explains nothing.
How to run it
- 1
Classify the spend as marketing
Book competitive gaming investment as a marketing programme for the game or the brand, and set expectations accordingly with everyone funding it.
Watch out Framing it as an asset purchase invites valuations that the underlying economics cannot support.
- 2
Verify the game is a forever game
Check that the title has an incentive and a model to stay alive indefinitely. A packaged good with a finite sales window cannot sustain a league.
Watch out Robbins's Overwatch League critique is exactly this: the incentives of a sixty-dollar box product and a permanent league do not line up.
- 3
Define the return in game metrics
Measure lift in play, retention and in-game purchases around tournament moments rather than media rights or franchise valuations.
Pro tip Track cosmetic sales in the weeks around a world final; the swing can be enormous.
- 4
Build the visible ladder to pro
Give ordinary players legible progression and a real route toward competition. Valorant's semi-professional mode lets teams run tournaments and climb toward a world stage.
Pro tip The dream being genuinely obtainable is the mechanism; unlike basketball, the barriers are low and you queue directly against the best.
- 5
Choose a governance model
Either run a franchised league like League of Legends or sanction independent events like Valve does with Counter-Strike majors. Both work; the choice determines who captures value.
- 6
Refuse fear-of-missing-out capital
Do not let traditional sports owners' fear of missing the next league drive the deal. Several who ignored this ended up with dead assets.
In the wild
Around thirty million people watch League of Legends world championship streams, and those viewers return to play and buy skins. Lasky recalls that when the Chinese team won worlds, Riot staff were celebrating because of the scale of the unexpected skin revenue that followed.
→ A revenue opportunity on the order of one hundred and fifty million dollars attributed to a single tournament result.
The organisation built three pillars - content and media, apparel and esports. The esports slot in a franchised League of Legends league was bought primarily to legitimise a new gaming brand, with sustainability treated as a later problem.
→ The apparel and content businesses thrived on the credibility the competitive team conferred.
Common mistakes
Buying a league slot as an investment
Franchise slots pitched as early-stage NFL equity produced dead assets for several traditional sports owners who bought on fear of missing out.
Running an esport on a finite game
A premium boxed product has no incentive to keep the ecosystem alive for a decade, so the league and the game pull in different directions.
Treating esports as one market
Saying esports is like saying sports. Each title has distinct economics, governance and audience, and generalising across them destroys the analysis.
Is it for you?
Best for
Publishers deciding whether to build a competitive ecosystem, and investors evaluating teams, leagues or franchise slots.
Not ideal for
One-off premium titles with a finite lifespan, or organisations that need the league itself to be profitable.
From the transcript
“the view is always which is probably similar to Mitch's is that Esports is marketing right”
“for the most part they really are like a marketing engine and they could be a marketing engine for for your organization if you have…”
“that's a you know that is a that that was a game that's 60 package good that's trying to be an esport”
From the episode
Benchmark’s Mitch Lasky and Blake Robbins on The Art of Business in Gaming
Mitch Lasky