The very idea of being a professional video game player would have sounded ridiculous ten years ago. But, today professional eSports players make a living entirely from playing video games. Some make modest earnings, but a few turn into millionaires.
Much like traditional athletes, esports players make money in all kinds of ways. Prize money isn't the only way to make a living. Talented and popular eports players are signing deals with major brands who are interested in promoting their products to engaged esports fans.
In this blog we will break down how much esports players can make, and what their main streams of revenue are.
Gaming is the fastest-growing form of entertainment globally. Revenues are increasing at a massive 9%+ per year. By the end of 2022, the global video game market is forecast to reach $190 billion in revenue.
According to Newzoo, esports revenues were at $856 million in 2018 and are forecast to reach $1.79 billion in 2022.
Revenue for esports includes everything from media rights and merchandise and ticket sales and advertising. There are then also sponsorship and game publisher fees to consider.
The opportunity to generate revenue in esports is larger than many estimated it would ever become. And now as the big bucks are rolling in, players are starting to see their hobby turn into their livelihood.
Let's look at how players are carving out their slice of the esports pie.
Sponsorships are the main revenue channel for most esports players. In 2018, around 40% of industry revenue came from sponsorships according to Newzoo. In 2019, sponsorships generated a huge $456.7 million.
Sponsorships are great opportunities for brands and players. As with any sponsorship, esports players boost brand awareness. Brand messaging can be further strengthened when an entire esports team competes using a sponsor’s gear.
In 2018, 19% of industry revenue came from advertising.
Advertising revenues is anything that comes from content presented to viewers of esports events.
Unlike traditional sports, esports are typically streamed online. The very nature of esports means that there are fewer advertising opportunities. There are often not large breaks and only short ads are shown between large intervals on Twitch streams. Brand are therefore getting creative to carve out new advertising options in this space.
Players are capitalising on advertising by striking deals with brands to give them the rights to advertise on the players' individual streams.
Much like with traditional sports, merchandise sales are a major revenue channel in eSports.
For example, the esports organization 100 Thieves describes itself as “a new lifestyle company and esports organisation built at the intersection of competitive gaming, entertainment, and apparel.”
Fashion and gaming have become intertwined and merchandise has now become a major way to generate revenue. This does not only include tshirt and apparel in the real world, but in the digital world as well. Many fans buy the skins that their favourite players wear.
Team Liquid is another eSports team that is cashing in on merchandise. They partnered with Marvel in 2019 to bring exclusive superhero-themed merch, like a Captain America-styled jersey.
The final revenue channel that players are benefiting from is prize money. Many players, either individually or as part of a team, participate in the major esports tournaments for their game or games in the hopes to rank high enough to take home a cash prize.
For example, the 2019 Fortnite World Cup winner, Bugha, took home a $3 million first place prize.
Esports holds huge opportunities to generate revenue and we are only at the tip of the iceberg. 10 years ago the idea of making money playing video games was crazy and now professional players are making millions through sponsorships, advertising and prize money. How big will the revenues be a few years from now?
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