This guest post was written for The Esports Observer by Victor Frascarelli, a Marketing and PR professional living in Sao Paulo who developed his career in the gaming industry. Worked as content manager (and team manager) at Kinguin, in Poland, co-founded the Player 2 Communication Group, and published several articles at the Gamehall Network in Brazil.
Unlike much of the world, Brazilian companies choose to display their brands as part of the names of esports organizations.
“The Brazilian esports market is in the maturation phase and it should take two or three years to actually take off.” This is the prediction of Bruno Cremona, manager of sponsorships and events at Oi, a telecommunications company that invests in some of the biggest esports events and awards in Brazil. Considering this projection, along with the country’s market, which already reaches more than 21.2M viewers (according to StreamMetrics), companies from a variety of segments with different strategies move to seek their place in the sun. Some of them invest in more traditional models such as sponsorships of athletes and teams, while others choose to take bigger steps, founding their own esports organizations that bear their brands in the names.
Giving an esports team a brand name is not a very usual advertising model in Western markets. Some cases still may be seen, such as Team Kinguin, which existed in Poland and was named after the games marketplace that owned it. However, brands are not seen in the names of the most prominent organizations in major world competitions. In Brazil, it’s different: one of the biggest champions of the Brazilian League of Legends Championship (CBLoL) is Kabum!, a team owned by an e-commerce company with the same name.
After a period sponsoring YouTube content creators during the video game boom on the platform, Kabum!, an online store specializing in electronic products for gamers, turned its attention to esports in 2013. Through the acquisition of the roster of the now-extinct Nex Impetus team, it started its own League of Legends team, which did not take long to become victorious and one of the main organizations in Brazil.
In an interview for the UOL portal in 2019, Fernando Noé, marketing director at Kabum!, revealed part of the strategy: “Our business vision at that time was: ‘how could we bring this new audience, which has a medium/high ticket, to the esports cycle, keeping the revenue?’ We created the team and managed to get fans.”
Despite having a name fully dedicated to the promotion of the online store, Kabum! E-sports does not suffer from negative attention from the press or the public. The team is a constant presence in specialized media reports and its brand is shown without any censorship on Brazilian TV. It is considered one of the most traditional local organizations and had broad audience support in its two participations at the World Championship of League of Legends, in 2014 and 2018; occasions when it won the CBLoL. After investing in esports, Noé says that the brand “ended up becoming a reference when thinking about buying gamer equipment.”
Unlike Kabum!, Havan is not a niche company in the technology or games market. The department store chain has a greater focus on home goods and well-being, but nonetheless it founded its own esports team, Havan Liberty. Samuel Walendowsky, the organization’s CEO, explained the company’s objective to The Esports Observer: “Havan is interested in increasing its share in the electronic goods market and selling products from the gamer universe, so entering this world was a commercial decision.”
Lawendowsky explains that, initially, sponsoring an existing organization was indeed considered. Havan already has investments in some local soccer teams, such as Athletico Paranaense, a club that plays at the first division of the Brazilian Championship, but has the requirement to have a say in the administration of sponsored organizations. Therefore, it considered being safer to have its own team and increase exposure to the public.
Vivo Keyd took a different path. Vivo, a telecommunications company belonging to the Spanish group Telefónica, has no interference at the team management, but acquired the organization’s naming rights when closing a sponsorship agreement in 2018.
Vivo Keyd CEO Tiago Xisto tells The Esports Observer that a study was carried out by the Spanish company to decide which team would receive the investment. The organization, previously under the name of Keyd Stars, was the winner of this competition. The data and parameters of such study are confidential, but Xisto guarantees that after the closing of the agreement, there was a two to three times greater engagement of the public with campaigns promoting Vivo’s products to the gamer universe.
Although all of them already have their biggest sponsors displayed shirts and names, none of the organizations (Keyd, Kabum! and Liberty) reported problems in seeking out other business partners. “On the opposite, it is even easier because Havan deals with the sale of the sponsors’ products, so the investment ends up generating a direct return,” says Lawendowsky. Xisto pointed out that having Vivo in the name increases the organization’s credibility: “Several companies want to relate to one of the biggest brands present in Brazil”.
Challenges of the Brazilian Market
Bruno Cremona from Oi told The Esports Observer that Brazil does not have clear regulations for esports yet, so it may cause some noise when a company decides to invest in the local market. The position of caution is shared by Lawendowsky, who reports difficulties at the time of foundation to fit Havan Liberty in an appropriate position in the National Register of Legal Entities (CNPJ, from the acronym in Portuguese), as well as to register the athletes’ occupation. Therefore, Cremona preaches caution, making the projection of two-to-three years for the local market to mature, and without revealing Oi’s next steps in the esports world. However, he said that sponsoring a team is indeed on the horizon.
Another challenge to which Cremona brings attention to is the size of Brazil and the regionalisms that come with it: “Being such a large and heterogeneous country, you must have in mind your geographic expansion strategy before investing. There are local events and organizations that are smaller and more economical to invest in, but better results may come due to the context in which they are inserted,” he concludes.
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