Fan is worth its weight in gold – how eSports clubs monetize fanbase

Cryptocurrency for fans

Fan Tokens are one of the systems for creating an emotional connection between the club and its fans. They work on special platforms, for example Socios, and are analogous to cryptocurrency. Anyone can buy a token for a certain amount, and then sell it – the number of tokens on the market is determined by the club itself.

This system gained popularity in football, from where it moved to e-sports. By owning tokens, fans can influence the life of the team: for example, Juventus fans voted for the song that plays in the stadium after scoring goals, and Paris Saint-Germain fans – the captain’s armband. Since the fan token system is still relatively new, the possible functionality for its members is so far limited only to such votes and discounts on the club’s merchandise. However, this does not prevent fans from buying up all free tokens instantly: for example, the Barcelona currency for $ 770 thousand. dismantled just two minutes after launch.

The token practice was brought into esports by the two-time winner of The International tournaments – the OG team. After the second championship, the organization began to interact even more actively with the fans. The club’s currency is called $ OG, and its main feature is that token holders will be able to generate additional “activity” points and receive separate rewards for them: tickets to tournaments, places at VIP meetings with the team or a unique merchandise. During the first day, the fans bought $ OG for $ 224 thousand – this amount is commensurate with the income of Juventus from the sale of its tokens for the same reporting period.

Token holders can get discounts on team merchandise, play several mini-games, and participate in polls: fans have already decided how the in-game banner of the Dota 2 roster will look in official matches, and have chosen a player for the next interview.

The successful find attracted other organizations as well. So, Heretics also launched tokens ($ TH) and even broke the record for profitability from their sale among esports teams – the entire currency worth about $ 300 thousand was sold out in 20 minutes. But even despite such seemingly successful cases, not all clubs manage to repeat the success. Alliance is also working with tokens from European organizations, but at the moment the club has offered currency holders to participate in only two votes, and it is not yet known whether the list of such activities will expand.

In the CIS, the first token system was launched by the Natus Vincere club. NAVI’s offer differs from all others: the organization released 5 million tokens for sale (for comparison, Heretics had 150 thousand), while the NAVI currency was not sold out for a month and a half of its existence. Now its price is five times lower than $ OG, and six times lower than $ TH. So far, the ownership of Natus Vincere tokens offers fans only one vote – to choose the design of the new merch that will go to the brand store. At the same time, we note that Alliance, whose tokens cost the same, entrusted the fans with a much more important decision – the choice of the discipline for which the organization will sign the roster in 2023.

Anti-example from Double Dimension

An interesting case is Double Dimension, which in the summer of 2018 tried to introduce its own special token system. While in other organizations, fans could influence some cosmetic changes, then the DD management planned to give those who invested in tokens a significant part of the organizational decisions on the team.

For the team to exist, it was necessary to raise $ 2 million. This amount would go to the salaries of the players and the organization of their performances, and they planned to get it through the sale of fan tokens. For this, the fans would be “rewarded” with the opportunity not only to receive a part of the prize money earned by the team, but also to decide the fate of the players: whom to sign and with whom to terminate the contract.

The Double Dimension concept raised legitimate questions from representatives of the esports industry: it was unclear why blockchain was chosen for such a project, rather than crowdfunding, how players should not lose motivation due to prize cuts, and why they should act as an “escort” for investors. Although DD CEO Yuri Fedin tried to answer all the questions in your blog, we never found out a practical solution – the Dota 2 organization’s membership was closed before the investment concept saw life.

Merch and Collaborations: How to Make Money on Regular Products

Selling team merchandise is one of the main ways clubs can monetize their fan base. But organizations go beyond the standard fan jersey and collaborate with different brands – manufacturers of gaming devices, computer hardware, car manufacturers and even film studio projects.

The prices for various exclusive branded products can be several times higher than the cost of conventional analogs. This applies to both simple T-shirts, in the case of which a quality item from Lacoste costs about ₽2 thousand, and a branded T-shirt from Team Secret – about ₽4 thousand, as well as various equipment: SteelSeries Sensei RAW computer mouse in NAVI colors will be released on ~ $ 10 more expensive than a regular paint job.

It is worth noting that some organizations sell not only standard sports jerseys, but even develop entire clothing lines: Team Liquid, for example, has a line in Japanese casual style tokidoki and several collections in collaboration with Marvel, and FaZe Clan in collaboration with FC ” Manchester City has released a joint series of thematic merch.

The situation is similar with larger goods. For example, gaming chairs, which are not cheap in themselves, with the logo of your favorite team can cost several thousand rubles more than their unbranded counterpart. But there are also budgetary ways to get something in the theme of your favorite club: now, gift sets from teams, which contain nice little things like pens, notepads, mugs and stickers, are gaining popularity. Especially for the New Year, Natus Vincere has released a gift set with warm clothes and cocoa.

Another kind of merchandise and a way to get additional profit is in-game items from teams. True, not all developers support the ability to add custom items to their products. The first such system was acquired by Valve: stickers with team logos began to be issued for the CS: GO majors, 50% of the amount of their sales was divided equally among the competitors. And although stickers appeared in 2014, the percentage of profits paid for them are still rumored to be the largest in esports. Much the same is organized in PUBG, where teams receive 25% of the sale of their themed items in tournaments.

In Dota 2, in-game merch is implemented using community items. Analyst and former professional player Yaroslav NS Kuznetsov toldthat on his personal set, he earned about $ 25 thousand since its addition to the game in 2014. And although Valve has now practically abandoned this idea, the developers have announced a new system of “fan kits”, with the help of which fans can support their favorite teams participating in the ranked leagues of the DPC season 2023. It is likely that some of the money from the sale of such kits will be redirected directly clubs.

Riot Games went farthest in this field, offering official support: every year, the company, together with the winner of the World Cup, releases themed team skins. Players receive 25% of the sales of skins, with their club also being paid an unnamed percentage of that amount.

Mobile market entry and franchise tournaments

Clubs keep in touch with fans through special platforms, most often – social networks and mobile applications. The main source of income from these platforms is advertising placement – nothing out of the ordinary. But if every self-respecting organization has an official website or groups in popular social networks, themed mobile applications are just beginning to appear on the service market. In the CIS, Virtus.pro plans to use the new practice, running the Bearloga app, in which fans can follow the team’s progress, purchase merchandise, participate in the life of the team (by analogy with blockchain token holders from other clubs) and even get some “exclusive content”. A similar system is already used by some European organizations with CS: GO rosters – now BIG and Team Singularity have active applications with thousands of downloads and close to maximum ratings, and several more teams are planning to launch them.

Franchise tournaments are another fairly popular fan base monetization system. The team buys a place for itself at a certain event, and then receives part of the earnings from it – from views, tickets, selling merchandise and providing exclusive rights to coverage of the event. For example, in the first season of the Overwatch League, 12 teams bought seats for a total of $ 20 million. In the second season, prices went up, but the seats in the league were sorted out almost instantly. With the growth of attracted investments, the prize fund of the tournament also increased (from $ 3.5 million to $ 5 million), but the organizations are not chasing this amount at all – due to the franchise system they also receive a part of the total profit attracted by the league, which is only in the first season, Rumored to be over $ 200 million.

Today, esports organizations are actively using a large number of media practices that have already been tested in big-time sports. However, given the pace of growth in esports and the coronavirus pandemic, we may see new marketing moves and a significant increase in the capitalization of esports clubs, including in the area of ​​interaction with the fan base.