Esports Business Grows on Merchandise Deals, Olympic Consideration

On today’s episode of the Tech Talk Tuesday podcast, Ryan McQueeney discusses the growing business of esports and the new ways video game companies are looking to cash in on professional gaming competitions.

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The global esports economy is expected to grow roughly 38% to total $905 million this year, making it one of the most exciting growth segments in digital media—and the broader tech investing landscape.

But where exactly is this money coming from? Well, gamers, developers, and sponsors are linking up on massive advertising deals; TV and streaming companies are paying big sums for media rights; and game publishers are collecting fees from competitions.

This week, investors heard some major news about a smaller—but growing—corner of the esports economy: merchandise.

Activision Blizzard ATVI on Monday announced a major partnership with Fanatics that will see the online sports retailer become the exclusive home for Blizzard’s Overwatch League merchandise. The Overwatch League was already one of esports most interesting concepts, but now it will also serve as an example for how the industry’s apparel deals will look.

This news follows another agreement between the North American League of Legends Championship Series (NA LCS) and We Are Nations, an esports-focused merchandiser. We Are Nations will be the exclusive online and in-person distributor of NA LCS gear, including game-day jerseys. NA LCS is operated by Riot Games, a subsidiary of Chinese tech behemoth Tencent TCEHY.

The development of the esports merchandise and apparel business makes the concept look even more like traditional sports competitions and leagues. This could have serious effects on the esports in the long-term, and that notion is coming just one week after the International Olympic Committee discussed the merits of esports during its executive meetings.

That’s right, esports are on the Olympics’ radar. Want to hear more? Check out this week’s Tech Talk Tuesday!

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