Market Reactions to eSports Sponsorship Announcements in Japan: Before and After the COVID-19 Outbreak

This study investigated the effects of eSports sponsorship announcements on the market value of Japanese sponsoring companies and changes in such effects since the COVID-19 outbreak. We calculated the buy-and-hold abnormal returns around the release date of the sponsorship agreements and performed a multivariate regression analysis to examine what factors affect market reactions to eSports sponsorships. Results indicated that market reactions to eSports sponsorship announcements were not significantly different from zero, based on 72 eSports sponsorship contracts announced in Japanese newspapers from 2015 to 2021. However, investors reacted more positively to eSports sponsorship announcements during the COVID-19 pandemic, leading more people to play eSports at home and pay attention to in-game advertising. The positive effects are intensified when sponsors are engaged in eSports-related businesses. Whereas previous studies employed surveys and experiments, this study examined the economic effects of sponsorship contracts on eSports using objective quantitative indicators.