Generally speaking, it’s obvious to us how people in different industries make their money. Yet, as eSports continues to thrive and the professional players become worth more and more, some are a little confused as to how the cold hard cash is generated.
Streaming and Sponsorship
There still bizarrely remains some incredulity attached to the act of watching others play video games. Yet, Twitch and other streaming sites continue to attract more and more viewers every day and popular streamers have loyal and consistent audience figures.
When a new update or sequel to a popular game is imminent, gamers will visit sites or blogs that offer them developing news about their favorite game. Such is the case with the much anticipated Overwatch 2, as traffic to sites offering the latest Overwatch news continues to grow as developments occur, the released date approaches or news of the beta gameplay emerges. These sites typically benefit from ads from electronics companies and energy drinks, but increasingly these companies are looking at eSports teams and individuals to promote their products.
Major eSports teams are paid to have the logo of a product or service emblazoned on the apparel they wear when in the public eye and as eSports viewership grows, the ability to raise a brand’s awareness through product placement on streaming services becomes big business. A popular streamer will mention the promoted product in their videos, often provide a promotion code for viewers to receive a discount and then take a small cut of any transactions placed using that promo code.
From sports apparel to car manufacturers, every brand could benefit from reaching a large, engaged and diverse audience through a partnership with a popular eSports team. eSports is not so different from other sports after all.
About to get real!
Together we reached over 1.5M concurrent views, the highest day ever for Overwatch on Twitch. Let’s go! pic.twitter.com/bblWCahUYI
— Overwatch (@PlayOverwatch) April 28, 2022
Dota 2 is generally considered the game that awards the most prize money, but tournament winnings are on the up all over. The International 2021 held in Bucharest, Romania, saw Team Spirit walk away with a cool $18,208,300.00 for winning the Dota 2 tournament and the overall prize pool was a tremendous $40,018,400.00. The story of how Team Spirit won is a true underdog tale, but eSports teams securing their future through major wins is not the norm.
Winning represents the simplest way to make money, but for every Team Spirit, there will be a large number of teams that find tournament costs unsustainable and will need to generate a regular income from other sources, including streaming. Ensuring that players are in optimal condition to perform during a big tournament can be an added expense, but eSports injuries could be very damaging for a major team. So, as tournament prize pools go up, so too does the cost of operating at an elite level as a secondary industry focused on keeping players in optimal condition emerges. Again, just like other sports.
— FaZe Clan (@FaZeClan) May 11, 2022
The top teams such as FaZe Clan and the ever-expanding 100 Thieves are in a position to generate large sums through their loyal fanbase, but this generally isn’t an option for others. Fans like to feel part of the team, and just as other sports fans buy replica jerseys, eSports fans can visit their favorite team’s website and buy a multitude of different products, all with the team logo scrawled across.
Unlike other sports, eSports merch can be purchased in-game with many games offering skins that mirror or represent the top teams for that game. Purchasable skins are big business for the game developers and when a fan buys a skin to make their characters resemble a member of an eSports team, the team gets a cut. Overwatch and League of Legends are two games that present this possible revenue stream and while it’s only a small percentage of the overall skins market, they can provide significant and consistent funds.
Turning a profit in the eSports business isn’t so complicated compared to other sports, but aside from the top teams, most tend to find it tough.