At the League of Legends World Championship finals last November, 44 million viewers watched China’s FunPlus Phoenix team hoist the winning trophy next to a custom high-tech trunk designed by Louis Vuitton.

The gamers wore matching Nike sneakers and Swoosh-branded jerseys as part of a four-year sponsorship deal the athletic giant signed with China’s 16-team League of Legends Pro League. Fashion, it was clear, was finally starting to take esports seriously.

In recent weeks, as the world of traditional sports has effectively ground to a halt fight the spread of the coronavirus, organized video game competitions have emerged as one of the most adaptable corners of the industry. The NBA, NHL and MLB are at a standstill, Wimbledon is canceled for the first time since World War II and the Tokyo Olympics are postponed until 2021,  but their viewers are arguably hungrier than ever for entertainment.

Social distancing has made most in-person esports competitions an impossibility for now, but online alternatives are increasingly filling that void, bringing together seasoned fans and new gamers from around the globe.

Video game streaming is seeing a surge in interest, with average viewership on Amazon’s Twitch platform jumping to 1.64 million in March from 1.41 million in February and 1.26 million in 2019 overall, according to Twitch Tracker.  Many of the most popular esports leagues have moved to online-only play after a few weeks’ hiatus to sort out logistics.

While it’s still unclear how big of a hit the industry will take due to lost ticket sales and missed in-person sponsorship opportunities, Goldman Sachs has estimated that the global esports market will generate $1.59 billion in 2020, growing to $2.96 billion in 2022. According to esports and gaming research agency Newzoo, the broader gaming market was worth $148.8 billion last year.


ESports Data

The Gaming Boom: By the Numbers

CREDIT: Pheanny Phen

As the industry has grown larger and more lucrative every year, the perception of gamers, too, has shifted: Far from the schlubby stereotypes of the past, many today are sneakerheads and fashion fans. They also have disposable incomes, and they’re willing to spend on brands that connect with them on their turf.

Knowing this, many industry experts said they aren’t surprised to see brands like Nike and Louis Vuitton trying to get a bigger foothold, particularly in League of Legends. The online battle arena game is today the largest esports title and the most-played popular PC game globally, with 80 million monthly users across 145 countries.

“League of Legends is probably in its own class in terms of the viewership that it’s drawing right now,” said Will Hershey, co-founder and CEO of Roundhill Investments, which manages an esports exchange-traded fund (ETF). “In terms of the way that the game and the competitive esports around it have been built, from an infrastructure standpoint, it’s years ahead of the rest of the industry.”

It’s also hugely popular in China, a market that’s been key to Nike’s rapid growth in recent years. For the sportswear giant, this dedicated audience — along with the projected growth of the relatively nascent sport — may help explain its recent investments, even if the potential upside today would be barely a blip in its revenues.

Chinese customers also account for a third of global luxury spending, according to a 2018 study by management consulting firm Bain & Co.

And importantly, Louis Vuitton didn’t just slap its monogram on a trophy case and expect fans to open their wallets: Its multi-pronged partnership with publisher Riot Games also includes skins — that is, custom in-game outfits — designed by creative director Nicolas Ghesquière and a real-life collection of handbags, footwear, apparel and accessories inspired by the game. Depending on their budget, fans can buy limited-edition LVxLoL Archlight sneakers for $1,140 or purchase a skin for points earned in game play.


Models wearing the Louis Vuitton x League of Legends Collection.

Looks from the Louis Vuitton x League of Legends Collection.

CREDIT: Louis Vuitton

“In general, the gaming industry isn’t always supported with high-quality merchandise,” said Tatiana Tacca, director of esports at experiential advertising agency Momentum Worldwide. “So to see someone like Louis Vuitton — that’s not even just high quality, it’s full-on luxury — come in and really take it seriously… it really helps to showcase the legitimization of esports.”

While most players won’t be wearing Archlights in competition, many top esports organizations are upgrading their merchandise through sponsorships and collaborations. Overwatch League (OWL), which is run by Overwatch publisher Blizzard Entertainment, recently tapped veteran streetwear designer Jeff Staple to overhaul the jerseys and gear worn by all 20 competing teams for the 2020 season.

The launch builds on the momentum created by some of the league’s more fashion-forward teams. OWL team New York Excelsior, whose merch efforts are run by former Converse and DC Shoes executive Collette Gangemi, has already debuted one-off collaborations with Undefeated and Nike, the latter on limited-edition Air Force 1 PEs. Even without custom product, rival London Spitfire has developed a reputation for its sneaker game, winning the 2018 OWL grand finals in Off-White x Air Jordan 1s, Gucci Aces and Balenciaga Triple Ss.

If more teams eventually land footwear sponsors, however, this kind of display could become a rarity, which some insiders see as bittersweet. “Sneakers have become such an important outlet for self-expression for professional players over the last couple of years,” said Lauren Gaba Flanagan, co-founder of Theorycraft, an esports and gaming creative and strategic advisory firm. “It’s one of the few things that you can wear that most leagues don’t have regulation around.”

The total price of the footwear worn by the six-player team (more than $5,000, factoring in current resale value) hints at how much money the most successful esports athletes are pulling in today: In 2019, the average Overwatch League pro earned $114,000, according to Blizzard, while professional League of Legends players earned an average of $320,000 the year prior.

For seven- or eight-figure salaries approaching those you might expect in the NBA or NFL, you have to look outside of esports to the top gamers on streaming platforms like Twitch and YouTube, whose careers — and money-making opportunities — hew closer to those of influencers than they do professional athletes.

Ninja (whose real name Tyler Blevins) is the most popular of this crowd. A former pro Halo player who rose to fame streaming himself playing games like Fortnite for 12 hours per day, Ninja earned $17 million last year, according to Forbes. Most of that came from brand deals, including a multi-year exclusive contract with Microsoft’s Mixer streaming platform worth a reported $20 to $30 million.

In August 2019, Ninja became the first pro gamer to sign with Adidas, and in December, the brand released the first product from the partnership: a Nite Jogger sneaker rendered in Ninja’s signature blue and yellow with his name and the slogan “Time In.” The style quickly sold out, despite the somewhat inconvenient fact that streamers’ shoes rarely make it in the frame.


Ninja x Adidas

Ninja holding his Adidas Nite Jogger ‘Time In’ sneaker.

CREDIT: Adidas

Like Adidas’ first foray into esports merchandise last year — a limited-edition AM4 SpeedFactory sneaker produced for French esports organization Team Vitality — the Nite Jogger is a lifestyle shoe, not a performance sneaker. And on March 10, the brand launched a smart insole — the Google Jacquard-powered Adidas GMR — that connects real-world soccer play with FIFA Mobile, allowing players to unlock rewards or move up rankings based on their physical movements.

Nike, meanwhile, tapped into the virtual basketball world last fall to launch an exclusive sneaker through a partnership with NBA 2K20 — a playbook we could see others follow as traditional sports remain on the backburner.

Brands are also experimenting with products designed specifically to help gamers play at their peak.

For many, this idea can seem like a gimmick — after all, these athletes spend competitions seated in comfortable chairs, rarely so much as breaking a sweat. “It’s a hard argument to make that footwear is going to enhance performance in esports,” said Will Powers, communications director at The Story Mob, an esports communications consultancy. “Some brands are definitely trying [by claiming their products enhance] circulation and blood flow, but I’m not buying it necessarily.”

Gaba Flanagan, though, argues that footwear in esports has to be about more than aesthetics. “When you are sitting feet on the ground in an ergonomically correct position, the support that you have actually does matter.”

The first sneaker brand to seize on this idea was K-Swiss, which has rallied in recent years under the leadership of president Barney Waters. In April 2018, the brand announced that it was partnering with the Los Angeles-based Immortals Gaming Club to create two limited-edition styles: a lifestyle shoe called the Kompass and a technical performance style called the One-Tap, designed specifically to meet the needs of pro gamers.

Waters said the company’s relatively small size actually proved to be an advantage in its entree to esports, allowing it to move fast and think outside of the box of traditional sponsorship opportunities, which can run as high as seven figures for an organization as big as Immortals. (The group is valued at $210 million, according to Forbes, and competes in OWL under its Los Angeles Valiant brand.)


K-Swiss x MIBR ONE-TAP sneakers

K-Swiss x MIBR ONE-TAP sneakers.

CREDIT: K-Swiss

K-Swiss chose Immortals as a partner, said Waters, in part because of its Southern California roots. “We knew we wanted to really participate and learn the space, so being local was an advantage,” he said. “Then it was a meeting of the minds and great chemistry with their team and a joint excitement about creating something unique and breaking new ground that drove the whole project.”

The One-Tap style sold out “immediately,” he continued, though it was a small run intended to test the potential of the market.

Other brands are now following suit: In December, Puma debuted Active Gaming Footwear, a $110 sock-like style engineered for competitive gaming that launched in Australia and the U.K. before selling out in the U.S. in January. Last year, the brand also announced a multiyear sponsorship deal with Los Angeles-based esports group Cloud9 to develop custom gear and outfit its players in competitions, as well as design an apparel collection available for fans to purchase.

For Puma, partnering with an American organization helps strengthen its position in a key market, said Johannes Waldstein, founder and CEO of FanAI, an esports-focused audience monetization platform. Cloud9 is also one of the most established teams in esports, counting companies like BMW and AT&T among its sponsors.

“Puma looked at it as a brand-safe, strong American esports brand… a place where they could develop product, a place that they could develop authenticity and the ability to dialogue with esports enthusiasts and with gaming enthusiasts,” he said.
“We wanted to work with Clould9 because they have always found success in every game they play,” said Matt Shaw, Puma senior strategist, esports and marketing innovation. “Not only do they compete with the best, but their brand is huge and widely respected across esports, plus their passion and dedication to their community of fans was a defining factor in partnering with them.”

Initial reactions from the community were overwhelmingly positive. Ratings agency Nielsen, which launched an esports division in 2017, found that social media sentiment around the partnership announcement was 73% positive, far higher than the 10% typically garnered by similar campaigns in traditional sports, where fan sentiment is mostly neutral.

For mainstream fashion and athletic brands, one of the biggest challenges in esports is earning fans’ trust. “If [the audience] smells something that doesn’t look authentic, they’re going to call BS,” says Hershey.

Here, pro-gaming organizations are already several steps ahead — and a few of them are now building lifestyle brands of their own. 100 Thieves, which counts Drake and LVMH-linked investment firm Aglaé Ventures as investors, has been called the “Supreme of esports” thanks to its wildly popular merch drops, which today can sell out of $500,000 worth of product in minutes.

FaZe Clan, a gaming and esports lifestyle brand known for its social media prowess and roster of influential streamers and esports athletes, has made collaborations its calling card, partnering with names like Champion, Offset and Kappa, and hosting one-day pop-up stores that draw thousands of fans.

That these tactics sound familiar is no accident. “[The leaders of these brands] have taken notes from sneakerheads, they have taken notes from streetwear culture because that’s what these guys grew up with,” said Powers. “Now it’s coming full circle where those brands that they look to for inspiration are coming in and doing partnerships with them endemically, which is absolutely fascinating.”


E-Sports Data

Data shows why more companies are betting on esports.

CREDIT: Pheanny Phen

While for now, the industry’s digital prowess will be what keeps it afloat, IRL events have been key to its growth, and there no doubt that many are looking forward to a future in which teams can again sell out stadiums.

Some malls around the U.S. will also be looking to gamers to help bring traffic back in when they finally reopen. Simon Property Group and Brookfield Property Partners, America’s two biggest mall owners, have invested $5 million apiece in Allied Esports International Inc., an esports entertainment company, to build venues and create gaming experiences in some of their top-tier shopping centers. The first, a 13,000-square-foot venue at the Mall of Georgia, is expected to be a premier destination for gaming fans with facilities to host amateur and pro tournaments, elevated food and beverage options and experiential retail.

Already, hundreds of malls are home to social gaming lounges — smaller, more casual facilities where gamers can drop in and play — and earlier this month, Target opened a new immersive gaming space called Game Room at San Francisco’s Metreon center.

While it’s impossible to know how the COVID-19 pandemic will affect the fate of these venues, the increasing popularity of in-person gaming experiences prior to the crisis hints at an optimistic vision of the future.

“Gaming outsiders view gaming as an isolated activity,” says James Cook, director of retail research at real estate services firm JLL, “but gamers have an entire social life built up through all the connections they’ve made through gaming, and in a lot of cases it’s appealing to have that social world spill over into the real world.”

After months at home, going to stadium tournaments and playing with friends in person may seem more appealing than ever.

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