Fortnite Helps Demonstrate The Value Of Potential Esports Partnerships
BY ADAM GROSSMAN
Earlier this week, Ashland University announced it would be providing scholarships to Fortnite players as a way to attract new talent to its esports team. Some questions that many people in the sports industry may have include:
- What is Fortnite?
- Why would Ashland University offer scholarships for people to play Fortnite?
The Guardian’s Keith Stuart described Epic Games’ Fortnite as:
In short, it’s a mass online brawl where 100 players leap out of a plane on to a small island and then fight each other until only one is left. Hidden around the island are weapons and items, including crossbows, rifles and grenade launchers, and players must arm themselves while exploring the landscape and buildings. It’s also possible to collect resources that allow you to build structures where you can hide or defend yourself. As the match progresses, the playable area of land is continually reduced, so participants are forced closer and closer together. The last survivor is the winner.
Why would a university offer a scholarship based on this description of the game? We can actually use the Block Six Analytics (B6A) Corporate Asset Valuation Model to answer this question. When applying B6A’s analytics to valuing sponsorship, we define success based on two main criteria:
- Return on investment – how does a company make money from a partnership
- Return on objectives – how are a company’s brand and marketing goals addressed from a partnership
Evaluating the impact of an esports team on revenue should not begin or end with direct revenue. As we have discussed in our post on UMBC’s success in the Men’s NCAA Basketball Tournament, colleges primarily make money through tuition. From a purely economic perspective, schools either want to have a higher number of students attend or charge a higher price for annual tuition. The more students that apply to the program, the more likely that the school will have both a higher number of students attend and the ability to charge higher tuition given the greater demand.
Ashland University faces strategic challenges in this context. In Ohio alone (where Ashland is located), the school competes with several public and private colleges and universities including The Ohio State University, The University of Cincinnati, Dayton University, and Xavier University. That does not even factor in the out-of-state options for students. How does Ashland put itself in the competitive set for students applying to colleges in this context?
Increasing brand awareness with the target demographic is the key strategic goal of having an esports team. More specifically, students have to know that Ashland could be a compelling option for their college education. That is where offering Fortnite as a scholarship comes into play. The earned media from the announcement alone from publishers including TechCrunch, Business Insider, Forbes, and Variety provides increases in brand awareness that Ashland would be unlikely to achieve otherwise.
Ashland’s Fortnite scholarship is not just increasing brand awareness in a vacuum. Ashland is specifically able to reach its target high school demographic of students that are considering applying to college. Relatively few people will actually make the schools esports team, but as esports head coach Josh Buchanan said, “Fortnite appeals to both the core and casual gaming audience.”
The core and casual gaming audience has significant overlap with Ashland’s target demographic. The key here is Ashland using Fortnite to show why it is different from other universities and that it will have innovative activities that specifically appeal to its target demographic. Now many students have a compelling reason to apply and chose Ashland over some of its competitors.
Ashland’s Fortnite scholarship also demonstrates an approach to solving one of the biggest strategic challenges with esports. In particular, esports leagues, teams, and athletes (i.e. rights holders) want to attract non-endemic sponsors as corporate partners. Yet, companies not familiar with or who do not see a clear connection to esports have a difficult time making the investment.
Esports rights holders can use Ashland as an example of why companies should become partners. In particular, rights holders can show non-endemic sponsors how partnering with a team or league helps these companies generate more revenue or more effectively reach their brand objectives in novel ways that create competitive differentiation.
Each company generates revenue in different ways and has different brand goals. Understanding what those are and placing a potential partnership in this context provides esports rights holders with the best path to secure new sponsors.