Op-Ed: Cloud Technology Empowers Esports Organizations To Reach New Frontiers

Cloud-based tools help lower-tier producers compete with the big brands

Esports has undeniably cemented its position as a pioneer in live event production. The coverage of esports events has served as a wake-up call to major players in the global media landscape, revolutionizing the way consumers engage with real-time virtual content.

JD Wu

The success of esports is borne out by tremendous revenue growth across the sector. According to data from Futuresource (May 2023), esports industry revenues boomed last year, growing from $963 million in 2021 to $1.28 billion in 2022.

Sponsorship continues to drive a majority of esports revenue, and it’s unlikely this will change anytime soon. Yet, while overall growth speaks volumes about the confidence that major event sponsors have in esports’ capacity to innovate, thrive, and captivate audiences, lesser-known leagues and tournaments are working with a much smaller slice of the financial pie than gaming’s big names do.

The upshot is, lower-tier esports organizations face a tough challenge in upping their game, competing with much larger peers that are already household names in both esports and traditional live sports.

Finding Esports’ Broader Media Footprint

Esports organizations have received investments, sponsorships, and other funding through various sources in recent years. Many of Netflix’s significant shows are tied to gaming brands, from The Witcher to Resident Evil to Arcane. Microsoft and Sony led the charge in esports-driven acquisitions in 2022, with industry-wide esports merger and acquisition activity totaling more than $72 billion last year alone.

Despite the surge in investment in the big brands with name recognition, many smaller esports organizations still struggle with considerably smaller budgets, hampering their pursuit of the wider audiences that would vault them to a higher tier to compete not only with the esports elite but with mainstream live sports.

Established esports leagues and brands consistently attract global audiences and generate significant revenues that midsize organizations don’t. That, too, is unlikely to change. Esports’ current monetization model relies heavily on sponsorship deals with prominent brands ranging from luxury clothing to sportscars to supermarket chains. Although the big global esports organizations can leverage such deals, smaller or regional entities may lack the resources or connections to secure similar arrangements.

Re-Writing the Map

For midsize and emerging esports organizations, the key is to find their footing in the broader media landscape as they strive to create top-notch events without extravagant budgets. The main obstacle confronting many esports leagues, teams, and other organizations outside the top tier is the need to deliver high-quality live event coverage despite financial constraints.

Matching the production standards and quality of traditional sports events on a limited budget requires innovative approaches that leverage the strengths of esports’ ingenuity. With industry disparity wider than ever, leagues and teams at this level must find cost-effective ways to bridge the quality gap to help the whole industry thrive.

Many are turning to ground-breaking technologies like cloud-based production and streaming distribution across various devices to ensure that they can compete in an ever-evolving playing field and cater to a growing global fanbase.

Gaming Production in the Cloud

To join esports’ top tier, mid-level organizations must capitalize on growing worldwide interest in viewing gaming tournaments and league play. The audience is definitely there — and growing. According to the Global Esports & Streaming Market Report 2022 by Newzoo, the total global esports fanbase is projected to reach 640 million by 2025, up from 532 million in 2022.

What is critical for challenger esports brands is to deliver live-viewing experiences that approach the quality of coverage of elite esports tournaments and leagues as well as traditional sports events.

Mid-tier esports organizations and teams embracing cloud-based technologies for live content production and delivery find that they can create the spectacle and excitement that fans expect — approximating the live-viewing experiences of elite esports tournaments and leagues — while keeping costs down. Cloud video platforms enable them to leverage the cost-effectiveness, flexibility, and scalability they need to build live content that wins new audiences.

By adopting cloud solutions, esports leagues and teams with limited resources can create unique and captivating elements of tournament coverage without breaking the bank. Cloud production empowers them to efficiently incorporate moments like player meet and greets, celebrity appearances, behind-the-scenes interviews, and audience interactions, thereby forging connections with fans and elevating the profiles of individual players and teams.

With an abundance of live esports events on the horizon, gaming leagues, tournament organizers, and even individual teams have an opportunity to harness the power of the cloud to deliver live content that rivals the quality of the best live sports content but without the exorbitant price tag. Using cloud-based tools, esports organizations can provide multiple camera feeds from a greater number of events, while deploying remote or distributed production teams to manage costs effectively.

To Level the Playing Field

Tapping the cloud enables all esports organizations to compete effectively with globally recognized gaming brands and even traditional sports counterparts. This approach is particularly compelling since most esports fans access live events through streaming platforms, such as Twitch, rather than through major mainstream TV, for which broadcasters invest millions, if not billions, of dollars in live-content rights that become a central part of their fixed schedules.

Delivering engaging live content allows esports organizations to deepen their relationships with fans and cultivate fan communities. While meeting a favorite NBA or NFL player may be a rare and exceptional experience for basketball or football fans, connecting with a beloved esports player can be as simple as tuning into their Twitch stream, engaging in live chat, and immersing oneself in the action of gameplay.

Esports organizations of all sizes must reshape their business strategies and forge paths toward sustainable revenue streams. By embracing more-cost-effective methods for producing and delivering live event productions, these organizations not only achieve tangible financial benefits but also showcase their visionary approach to prospective investors and sponsors. Esports leagues, tournament organizers, and teams that deploy these tried-and-tested tools and resources have a remarkable opportunity to reinforce themselves as prominent players alongside the world’s leading sports-media brands.