Esports has rapidly transformed from a niche interest into a global industry worth billions. It’s no longer just a matter of playing video games for fun; it’s an ecosystem of professional competition, sponsorships, merchandising, and media rights. Central to this evolution is the adoption of the franchise model by esports teams and leagues.
The franchise model promises more stability for team owners and investors, but it also changes the dynamics of the industry—particularly in how players are developed, how fans engage with teams, and how leagues plan for sustainability.
The Rise of Franchising in Esports
In a franchise system, a fixed number of teams pay for a permanent spot in the league. The upfront investment can be enormous—ranging from millions to tens of millions of dollars—but in return, these teams gain security. They are no longer at risk of relegation, which allows them to focus on long-term planning, brand development, and securing sponsorships without the constant fear of being pushed out of the league due to a bad season.
Teams also now turn to smarter strategies to maintain a competitive edge, including digital marketing efforts such as iGaming SEO link building to enhance their visibility and attract sponsors, ensuring they can continue to thrive in this evolving ecosystem.
Player Development: Benefits and Drawbacks of the Franchise Model
Player development is one of the most affected areas by the transition to a franchise model. The system offers a more structured pathway for emerging talent but also introduces some limitations due to the fixed number of teams and positions available.
Benefits of Franchised Player Development
- Stable Training Environments: Franchised teams can afford to invest in structured training environments. Players have access to professional coaching, mental health support, and physical fitness programs. Teams are now building out development programs similar to farm systems in traditional sports, where young players can be nurtured before being called up to the main roster.
- Holistic Support: Franchised teams are now looking beyond just the game. In addition to improving a player’s skills, teams are focusing on the player’s overall well-being. This includes everything from nutrition and physical health to social media training and mental health resources. The goal is to help players thrive both in and out of competition.
- More Secure Career Paths: With the franchise system, players have greater job security. Unlike the open system, where a team’s success could fluctuate wildly, franchises offer stability. This allows players to plan their careers with more confidence, knowing their team won’t disappear overnight due to poor performance.
Drawbacks of Franchised Player Development
- Fewer Opportunities for New Talent: The closed nature of franchised leagues means there are fewer positions available for up-and-coming players. In the open system, new teams could emerge and give fresh talent a chance to compete. Now, with a fixed number of franchise slots, there are fewer opportunities for new players to break into the scene.
- Limited Player Mobility: Player mobility is another concern. With fewer teams and a more rigid structure, players may find it harder to move between teams or to new leagues. The freedom that once allowed players to climb the ranks through open tournaments is now more constrained within a franchised system.
Fan Engagement: New Strategies for a New Era
For any sport, fans are the lifeblood of the industry. In traditional sports, fan loyalty is often built around geographic locations. Teams represent cities or regions, and fans build a connection based on proximity and community identity.
Esports, by contrast, has always been more global. Fans often follow teams or individual players regardless of where they’re based. With the franchise model, some esports leagues are attempting to cultivate local fanbases, mirroring the strategy used in traditional sports.
Localization Efforts in Esports
The Overwatch League was one of the first esports leagues to assign geographic locations to teams, with teams like the San Francisco Shock or Seoul Dynasty representing specific cities. The hope was that local fans would develop a stronger attachment to their city-based team, similar to how traditional sports teams foster regional loyalty.
This localization effort allows for in-person events and community engagement, such as local watch parties, merchandise sales, and meet-and-greets with players. Teams hope that building a strong local fanbase will create long-term loyalty, driving ticket sales and community involvement.
However, this strategy isn’t without challenges. Esports fans are still largely digital-first. While localization can help build community ties, many fans follow players rather than teams, or they may be more invested in the game itself than any particular region.
Additionally, digital strategies such as private blog networks are often employed to enhance online visibility and engagement, allowing teams to connect with a global fanbase that transcends geographic boundaries.
Digital-First Engagement Strategies
Given the global nature of esports, teams also need to focus heavily on digital fan engagement. This means creating content that resonates with fans no matter where they’re located. Social media platforms like Twitter, YouTube, and Twitch play a central role in this strategy. Here are some key strategies franchised teams use to engage their fans digitally:
- Interactive Streams: Teams and players can host interactive live streams where fans can ask questions, watch behind-the-scenes content, or even participate in games alongside their favorite pros.
- Exclusive Content: Teams are increasingly offering exclusive content to fans, such as player interviews, coaching insights, or documentary-style videos showcasing the team’s journey through the season.
Digital Fan Events: Teams can create digital fan experiences, like online tournaments or fan meetups, that allow fans from around the world to participate.
Here’s a comparison of traditional and digital-first fan engagement tactics:
| Engagement Strategy | Traditional Sports | Esports |
| Regional Identity | Strong local pride and regional rivalries | Growing but still secondary to player loyalty |
| In-Person Events | Central to fan engagement | Focus on global online events with some local adaptation |
| Digital Content | Less emphasis, but growing | Essential, with a focus on streams and social media |
| Merchandising | Heavy focus on physical merchandise | Growing mix of digital and physical products |
Sustainability: Revenue and Stability in the Franchise Model
Perhaps one of the biggest drivers for adopting the franchise model is the potential for long-term sustainability. Traditional sports leagues have proven that a stable league structure can lead to consistent revenue through media rights, sponsorship deals, and merchandise sales. The esports industry is now attempting to replicate this model to ensure it has the resources to continue growing.
Revenue Sources for Franchised Leagues
- Franchise Fees: Teams pay significant upfront fees to secure their spot in the league. These fees provide the league with a substantial pool of funds to invest in operations, marketing, and infrastructure.
- Media Rights: Similar to traditional sports, esports leagues are increasingly selling media rights to broadcasting platforms. This allows for consistent income as streaming services compete to air popular events.
- Sponsorship Deals: Sponsorships have long been a cornerstone of esports revenue, and franchised leagues make these partnerships even more attractive by providing stable, long-term exposure for brands.
Revenue Sharing and Profitability
Revenue sharing is another key aspect of the franchise model. In traditional sports leagues, revenue from media rights, sponsorships, and merchandise is often shared among all the teams in the league. This ensures that even smaller-market teams have the resources to compete, helping to keep the league competitive overall.
Esports is adopting similar systems. By pooling revenue from sponsorships and media rights, franchised leagues can provide smaller teams with a more stable financial foundation. This collective approach helps ensure that the league as a whole remains strong, rather than just a few powerhouse teams dominating financially.
Conclusion: The Future of Esports Franchises
The key to the future of esports franchises will be striking the right balance. Leagues must continue to learn from traditional sports, particularly in areas like revenue sharing and long-term sustainability, while also maintaining the authenticity that sets esports apart. If the industry can continue to innovate while staying true to its roots, the franchise model could help propel esports to even greater heights.
