The dynamics of esports crowdfunding campaign success: a social exchange perspective

Abstract

Esports—a professionalized, commercialized, and spectatorial form of video game competition—is a burgeoning industrial sector that has relied on entrepreneurial community support and multi-platform media distribution modalities to catalyze its growth. In particular, the esports industry is increasingly turning towards grassroots crowdfunding to gain access to financial resources that can be used to facilitate tournament prizes. However, what remains unclear is which factors contribute to grassroots esports crowdfunding campaigns’ success. We used social exchange theory to identify important social and economic attributes that may influence the outcomes of esports crowdfunding projects. For methods, we scraped crowdfunding data from Matcherino using Octoparse 8. A total of 14,497 esports crowdfunding projects were analyzed by using multiple regression analysis, as well as robustness checks that were estimated through machine learning techniques. We find that equal distribution of prize rewards, the endorsement of big brand sponsors, and genres of games significantly influence the success of esports crowdfunding. This contributes to our theoretical understanding of 1) the process of esports crowdfunding campaigns as a complex mechanism that incorporates financial incentives and social values, 2) esports as an emerging industry that is institutionalizing, 3) the heterogeneity of genre-based community, and 4) the importance of distributive justice of prize rewards for organizing grassroots esports tournaments and events. Furthermore, we discussed methodological implications regarding the use of econometrics approach and machine learning for future crowdfunding and esports research as well as managerial implications for esports entrepreneurs, esports teams and organizations, and sponsors and investors in terms of developing strategies tailored to the dynamics of esports communities.