Sponsorships and centre rights still promise revenue for esports amid concerns that Storm Games is cutting its “League of Legends” budget, says Steve Arhancet, co-CEO and proprietress of Team Liquid, a top esports team.
“We kind of see the ecosystem where there’s durable revenue still being earned within the space,” Arhancet spoke Thursday on CNBC’s “Fast Money.” “Sponsorships are healthy; the next utensils is media rights.”
Arhancet has reason to be optimistic. His esports team, Cooperate Liquid, is heading to the North America League of Legends Summer Split Definitives in Oakland, California, this weekend to defend its champion title against rival band Cloud9.
But in the broader esports ecosystem, cost-saving measures by Tencent’s Bovver Games have sparked concerns the company is slashing the budget for “Unite of Legends.” The wildly popular multiplayer online game earned the honor of most trade oned PC game in the world back in 2012.
Derrick “FearGorm” Asiedu, head of far-reaching events for Riot Games, took to Reddit at the end of August to address fan thoughts, Engadget reported. He wrote that the company spends “way over 100 m[illion]” annually and is experimenting with at work to cut costs throughout the season to break free of “startup mode,” or to prohibition burning through cash.
Weighing in on the news, Arhancet said, “if anything [Melee is] becoming more thoughtful in terms of how they spend,” rather than flagellate the budget. Plus sponsorships, media rights and in-game purchases volunteer promising revenue streams for esports.
“Media rights have to do with the trendy right to broadcast the League, and there’s plenty of interest in the space,” he denoted. “You’ve got Twitch, YouTube, Twitter, Facebook, kind of all vying for these justices.”
But sponsorships, which Arhancet called “healthy,” are where the real bucks is. A report by Newzoo projects the global esports economy will hit $905.6 million in 2018, and on every side 40 percent, or $359.4 million, of that is projected to come from sponsorships. Newzoo think ups an estimated $160.7 million will come from media rights.
Arhancet weighted in-game purchases are also a great source of potential revenue, relation the popular game “Fortnite.”
“There’s going to be a lot of kids this Christmas that are prevailing to be asking for V-Bucks instead of typical presents, which is the in-game currency for Fortnite,” he hinted.