Spillover effect in promotion: Evidence from video game publishers and eSports tournaments

Abstract

Companies have increasingly used the promotion of their products through event marketing. However, empirical evidence on whether the events lead to higher sales is mixed. This study investigates the spillover effects of promotion in sales directly and through increasing popularity for global multiproduct firms. The research is carried out on data of the video game industry and eSports tournaments as events for the period of 1997–2015. The data is collected over 20 years, for product-by-product on game sales, events, genre, and location for all companies of the industry. The method of analysis is panel regression with fixed effects. The results support the positive impact of marketing through events in the videogame industry. A threshold number of about 80 eSports tournaments per year was found. Moreover, the existence of positive cross-product, cross-region, and cross-firm spillover effects was confirmed both for game popularity and sales. Videogames publishers should consider this when designing their promotion strategy.