No matter of being one of the things of the future, esports is already and undoubtedly one of the hits of the present times. Especially considering the financial issues. Money in esports is big and could be even bigger as an entirety. Some say that cash rules everything around us, so let’s see what kind of cash rules the gaming world.
Esports' growth is a trend worth observing. The thing gets the attention of masses and these masses are ready to pay a decent price for the possibility of being a part of this phenomenon. This unbelievable boom for electronic sports could not be and will not be underestimated because of the one simple thing that surrounds it. And there is one simple answer to the “why esports is such a big deal” question. The money.
Over the last few years, the popularity of electronic sports soared and many companies all over the world realized that there is a growing cake to be shared. Some famous personalities, like for example Michael Jordan, jumped into esports as investors. The development of different technologies throughout the years enabled this business to become one of the fast-paced moving sectors of the economy. Infrastructure is propitious, so is the business itself. Coronavirus pandemic, with all sports being postponed or canceled, only established esports' an already strong position as one of the leading and fastest-growing markets. Esports undoubtedly broke the bank lately. Here is our profound look at the vault itself.
How much is esports worth?
So far the biggest challenge of esports has been fulfilled. The thing hit a historical point. According to Business Insider Intelligence, esports is an industry worth one billion dollars. Yep, $1 billion! On one hand, this achievement may seem like a big success and nearly the dream coming true but for this biz, that started in academic holes and classes, this may be only the beginning of the road itself.
The meteoric rise of the industry throughout the years has been highly noticeable and now electronic sports seem like a real deal, capable of competing with much more experienced and known industries. The vault deepens constantly and nothing seems to stop this process.
According to research by Green Man Gaming, the process itself may only speed up. Esports is already worth more than one billion dollars and it’s predicted that it will keep the good momentum. Paul Turner, EVP of performance marketing at Green Man Gaming, told Forbes:
Esports is at its peak right now, and we as a gaming retailer really wanted to see how far it had come compared to the more traditional sports we know and love.
As the interactive shows, the sky really is the limit, as esports continues to outgrow the more traditional sports, and the lucky professionals involved continue to bag bigger purses than their more traditional rivals.
No matter if esports is a sport or not, it can be put on an equal footing with the most prestigious and the most popular disciplines in the world. Big faces from the sports world constantly join the esports haze, with basketball player Kevin Durant and American footballer Odell Beckham Jr. being the newest gaming crew members. They invested in Vision Esports, a leadership gaming group that operates all around the world. Stratton Sclavos of Vision Esports emphasized that it was a good choice from two superstars. He told Smart Series:
Our investors are some of the smartest and most accomplished names in sports and media and they share our passion, committing not only capital, but also their organisational [sic] resources and relationships in our quest to change the professional sports landscape.
With the biggest tournaments only getting bigger and beating record by record, with a rapidly growing audience and even an idea of joining the Olympic games, there are no limits for the future of esports. There are no boundaries. Just a pure imagination and chances that come with electronic sports rise.
Who is the richest gamer?
Since esports is a booming industry, it’s good to know something about the people behind its phenomenon. The ones that create the whole fuzz in the present days. The players themselves.
The rivalry over the esports throne seems intense. There are different opinions from different sources about the wealthiest of pro esports athletes. According to one group, the title of the richest gamer in the world should go to Tyler Blevins, known as Ninja. Self-styled King of Twitch earns over $10M from his work on a highly-popular streaming platform and that’s still not the end. It's only the beginning. Ninja profits from various advertising contracts, sponsorship deals or donations and although his tournament profits are not high, his other activities make him one of the richest gamers in the business. If not the richest one at all.
The other gamer aspiring for the throne is Johan Sundstein, known under his N0tail alias. He is the Dota 2 player and The International star. Literally and figuratively. N0tail won the biggest esports tournament in the world twice, in 2018 and 2019. His earnings to date equals nearly $7M in prizes.
The third prince of esports is Kuro Takhasomi, also known as KuroKy. He is, as N0tail, a dedicated Dota 2 player. He became the richest gamer in the world, by winning The International 2017 and since then KuroKy fights to reign the throne. Nevertheless of his position in all world ranks, his status in the esports pantheon is undoubted. Living and still active legend of gaming in the making. Hands down.
What esports team makes the most money?
What’s obvious, the players are not alone in the esports world. They create larger entities and they unite in esports teams, also known as organizations. Based on tournament results, player transfers and team statements published on the internet, the best and the richest team is Team Liquid, with nearly $35M earned on various activities. Nevertheless, there is a slight difference between the first and second place occupied by OG.
As for the top 3, the list presents as follows:
1. Team Liquid; $34,748,941.93; 1686 Tournaments
2. OG; $33,519,101.59; 76 Tournaments
3. Evil Geniuses; $23,766,698.79; 832 Tournaments
As the list suggests, the number of tournaments of these teams varies. Team Liquid and Evil Geniuses earned its money in many rivalries, while OG puts quality over quantity. Though, each team fills its pockets mainly thanks to Dota 2 tournaments. This game is the main core of every top esports team, suffice to say that 99.66% of OG prizes were earned thanks to Dota 2 rivalry. Among other popular esports games are: CS:GO, Rainbow 6: Siege, Melee, Street Fighter, Fortnite, PUBG, LO. Anyhow, if you look for a gaming point of gold, give up on trying because the one already exists.
That’s how the thing goes historically but let’s get into the nearest past, the year 2019. According to Esports Observer, there was a significant change at the top of the stake: OG was the richest esports team of 2019, with $15.84M in prizes, nearly twice as much as the second-placed Team Liquid and almost three times more than third-placed NRG.
What is the highest-paid esports game?
The most popular esports games are the most profitable as well. As for the money made throughout the years, there’s nothing that comes close to the status of Dota 2 as the highest-paid esports game. During all tournaments in this particular game, there has been $222M paid in prize pools, while the players of second on the list Counter-Strike: Global Offensive earned a little over 93 million dollars.
Fortnite, that occupies third place with $84M, has a lot of catching up to do but also has one advantage over the rest of the esports gang. It is the most profitable game of the present day. At the list of top paid games of 2019, Fortnite overtook an all-time leader with $64M in prize pools of 350 tournaments credited to 2272 players. In 2019 Dota 2 players earned more than 46 million dollars. Counter-Strike: Global Offensive stood on the podium once again, with $21M in prize pools.
If you’re into esports history expressed in tournament prizes across the years, this video should be useful. Give it a try.
How do esports make money?
Pretty intriguing and indeed a complex question. What are the foundations and building materials of this financial skyscraper which is esports? To understand the matter, we have to cut the cake into six pieces in various sizes. The gamers’ salaries came from:
- Regular salaries
- Digital streaming
- Media and merchandising
- Publisher fees
What do you think, which of these pieces is the largest one? The answer is pretty logical, especially nowadays. According to the analytic platform Newzoo, sponsorship is estimated to be the most important part of esports business. The report indicates that sponsorship will generate nearly $634M (from projected $1.1 billion) in revenue by the year 2020. Among the biggest investors and sponsors in esports, there are such market leaders as Disney’s Marvel investing in Team Liquid, Pepsi's Mountain Dew sponsoring Team Dignitas and Splyce or even U.S. Air Force sponsoring Cloud9 CSGO team.
Other components of esports fortune, of course, play its important role in esports incomes but somehow to strengthen our belief in one cliche that’s as old as the hills. The one saying that advertising is the key to business success.
Nevertheless, it’s good to explain other streams of esports revenues. Still small, the digital goods segment is the most dynamically growing one. Those are new ways to monetize, usually not available to traditional sports. They also demonstrate a growing understanding of the competitive advantages that esports has over sports. These revenue streams have become pioneering ways for teams, organizations and publishers to develop the business even more. They have a considerable impact on the organizations and especially players' likeness, visibility in an online world and the awareness of their existence itself. This part has a little bit of everything in it, the public relations, the marketing or even the customer support.
Why invest in esports?
You don’t have to be the second Warren Buffett to know that investing in esports is worth every penny. Electronic sports symbolize the path of humanity and the fact that each year we go deeper and deeper into an online world. But it’s good to sort out the knowledge about this pretty interesting but somehow still not fully discovered investment possibility.
So, summarizing mentioned before facts, it’s good to invest in esports because:
- It’s among the fastest-growing parts of the global economy. If we treat it as an actual discipline, then it can be even the fastest growing sport. Or at least one of the top ones.
- According to surveys, it’s expected that up to the year 2022 esports will be valued at 1.79 billion dollars. Wow, just wow.
- COVID-19 pandemic closed all the doors and opportunities for sports but opened the new ones for esports. Some say that this moment may even start the era of esports.
- It’s only projected for long-term growth. Surveys indicate one, simple thing. Esports will be bigger and bigger in the nearest years. The money, the global audience, the awareness - all of these ingredients are going to jointly increase its value in the matter of esports.
- Gaming has rather extremely high user engagement. It’s simple, you need to be an amateur player first to become a gamer and you’re not a proper gamer if you don’t have a solid amateur history.
The high number of people watching video games rivalry and being capable of paying a lot of money for this possibility shows us one simple thing. That the fans of esports are these guys that simply dig this thing. They feel it, they live by it, they have a passion for it. The market is created and governed by their needs that have to be met. The market constantly changes, gets bigger and bigger and evolves into a new kind of entertainment. From gamers to gamers.
Video games became part of our every-day reality, especially for the kids of Generation Z. That’s why it’s such a powerful submarket and that’s why it has such great financial potential. Supply creates its own demand.