Esports Jargon: Value
By: Hantao Yuan
Tags: Esports, Gaming, Influencer Marketing, Value Proposition, Leverage

What is the term “value”? It’s usually defined as the regard that something is held to deserve; the importance, worth, or usefulness of something. In terms of how it applies to the gaming industry, there are several instances of use. There are different scenarios but the basic principle is the same. The best way to explain this word is by taking examples of different relationships, as explaining the word by itself would make the understanding convoluted.

First the most important one that everyone is most likely wondering is streamer/influencer/player to organization. In terms of value, it goes both ways. For the organization, picking up talent will bring value to the organization since:

A good player will be able to compete for the organization, which translates to more exposure for the organization and sponsors.

A big influencer will bring their community and numbers which translates to more sales and revenue potential.

A undiscovered talent can be grown and molded to be the next Tfue.

For talent, you are getting value from the organization since:

You get exposure and can grow your network.

You can get help with things you normally wouldn’t be able to do yourself like sponsors or merchandise.

So in terms of how value works, is that there must be a good balance. It’s a simple trade that dates back to Maplestory or Runescape trading. If the value that is exchanged between two parties is unbalanced, the trade will not happen. An organization has a lot of choices in terms of talent, so discovery is really hard unless you’re already big. A player or streamer must think about what value they can bring the organization. Are they different than others, can they provide more value to the organization than someone else in an equal position. As long as you can position your value and why you are more worth it than someone else similar to you, there is a better chance at achieving those goals. Are you a designer but only make logos or only make banners? What about someone who has similar skill but they can also make advertisements and/or thumbnails? Someone who has a more diverse skill set will provide more value to an organization than someone who is a one-trick-pony. There are a lot of different values that might be intangible but using another scenario would be a better example.

I would consider there to be another aspect where value matters and that’s the relationship between organizations and partners/sponsors. Money and sponsored product is not easy to get, look at how many organizations there are. Why are only tier 1 organizations like C9, TSM, FaZe, etc. getting all the sponsors? They provide the most value to sponsors. So what value can a sponsor provide an organization:

Free product

Profit sharing through affiliate sales

Direct money sponsorship

How do sponsors get value from organizations:

Exposure

Brand integration with their audience

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Increased sales

Although I listed sales as the last point, I would consider this one of the two most important aspects of why companies sponsor teams. Sales means money. You both make money, you’re both happy. For small companies that first start out, most can only do partnered profit sharing since they don’t have a lot of money to start off with. For example, merchandise companies rarely provide cash sponsorship since they would be losing money or it would provide a huge risk if they were to spend a lot without making sales first. Medium sized companies like energy drink companies have relatively low cost associated with making product, so they can send out product easily. Getting free exposure and integration with an organization could mean more customers and dedicated communities that buy their products. All of these things can provide direct value through sales or indirect value through exposure and branding. I won’t specify too much insight on this topic just yet since it could get very lengthy, but let’s get back to our main point — value. A sponsor can get intangible value from integration of their brand with your organization, as this does not directly translate to sales. When companies consider deals, they all have internal metrics and each company values different things. Why should a company partner with you or sponsor you over another organization that could provide more value than yours? They get hundreds of applications from organizations so how can you separate your organizations from theirs?

More about this in my next article about “Esports Jargon: Leverage”

The most important thing to consider when you’re thinking about value is not only what you can provide, but what the other parties needs are. If you have eggs and want to sell them, but the other party wants bread, the value exchange will not happen. Don’t just think about what value you can provide, but what value the other party is looking for.

Feel free to reach out to me about any questions on Twitter or watch more content at my Youtube. Thanks for reading!