To Diversify or Not? Uncovering the Effects of Identification and Media Engagement on Franchise Loyalty in eSports

ABSTRACT The question of the optimal level of diversification in marketing research has a long history and shows an inconsistent empirical picture. Based on assumptions from the media management field, consumer engagement literature and social identity approach, this paper is aimed at obtaining a better understanding of diversification as a competitive advantage for organizations in eSports. Accordingly, we collected a sample of 216 League of Legends consumers, via the crowdsourcing marketplace Mechanical Turk- to explain the phenomenon of customer loyalty` for different eSports franchises. Using a quasi-experimental approach and structural equation modeling, our results show support for an inverted u-shaped curve of diversification. Medium diversified franchises seem to have the most beneficial positions in the eSports market. Furthermore, our holistic model illustrates that franchise identification has the potential to explain media engagement. Additionally, the two dimensions of media engagement – consumption and contribution – affect franchise loyalty in a positive manner, contrary to the third-dimension creation. We further discuss the contributions of our analyses and identify potential paths for future research in this paper.