Is Esports Profitable?
Michael Torres
English 110
Prof Gandi
Intro/Explanation
Esports has been around since the 1970s, it’s been around for a while now, growing and becoming more popular as the years go by. But before people were competing for cash prizes. People used to play for magazine subscriptions and other various prizes. To give a small explanation of what esports is, it is an industry where people around the world come together or online to compete in tournaments for money. It’s the same as regular sports. Esports it’s broadcasted on various streaming platforms like YouTube and Twitch, owners of these esports tournaments either stream on both or get an exclusive streaming deal with either Twitch or YouTube. Esports have widely grown so far, people make a living playing Esports and I’m here to go through the statistics and profits to see if Esports is profitable. I say Esports is a Profitable industry because of prize money, merchandise, and sponsorship deals.
Sponsorships
One way the Esports industry makes money is by gaining Sponsorships. What are sponsorships you make ask; well sponsorships are deals companies make with organizations to help promote their products. For example, NFL has a sponsorship with Gatorade, Gatorade pays the NFL to promote their product and help bring in more sales. The same goes for Esports, Intel has a sponsorship with ESL (Electronic sports league) and it’s been running since 2006 and is still ongoing now in 2022. Various companies sponsor Esports like Razor, Intel, SteelSeries, MSI ETC. “In 2019, sponsorships generated $456.7 million. For endemic brands, sponsorships have an amplified effect. As with any sponsorship, they help create brand awareness around the company’s products.” In this piece of evidence, from the article “How do Esports teams make money?” It shows that in 2019 sponsorships alone made the esports industry 456 million dollars, that is a lot of money from only sponsors. With sponsors making the industry and teams that much money you can probably say where most of their profits come from right, or wrong even though they make a lot of money from sponsors, there are other sources of profits. Like Merchandise, Streaming, and tournament earnings.
Tournament Earnings
Tournament Earning are earnings you get from whatever you placed in a tournament, like say if you placed 2nd place you would have earned 50K, the earnings vary from tournament to tournament depending on how big or small the event is. The very first competition was back in 1972 and the game the participants were playing was Spacewar! and the prize pool was a 1-year subscription to a rolling stones magazine. Since the first competition they have grown in size and have grown in prizes pools, the most notable and biggest esports event in recent years is the Fortnite world cup, it was a tournament made for people to enter all around the world, it 100 players qualified and fought against each other to prove their skills. The cash prize for this one tournament was 30 million, It was split up into Solos and duos cups, 1st place winners being able to earn 3Million. 16-year-old Kyle “Bugha” Giersdorf won 1st place in the solos cup winning the 3 million cash prize at such a young age. This was one of the largest events in 2019 and a 16-year-old won first place it’s crazy how much Esports can do to someone’s life. Winning the cup gave him a lot of recognition and fame, he kept on playing Fortnite and streaming it and he has made a living off the streaming and competing.
Picture of Buddha with his first-place trophy ^
Miscellaneous Profits
Streaming and merchandise are other ways the esports industry makes profits, Game companies who host these big events usually make streaming rights deals with either Twitch or YouTube, “Google will pay video game publisher Activision Blizzard $160 million over three years to exclusively stream the company’s esports leagues on YouTube, according to a report from Sports Business Journal”. Google buys streaming rights to popular games Overwatch and Call of duty leagues, to exclusively stream on YouTube, google is paying 8 million more than what twitch was offering for streaming rights. Merchandise profits are mainly based around the teams, Merchandise is mainly represented by the players and fans who want to show support for the team they root for. Teams like TSM, 100T, and faze all have either merchandise being exclusive skins or hoodies, or shirts. In 2019 100T raised and made over 35 million dollars off their merchandise. These were the two miscellaneous profits the esports industry makes.
Conclusion
In Conclusion, Esports is a Profitable industry because of prize money, merchandise, and sponsorship deals. From what I researched and explained throughout the essay is that esports is profitable which it is, the esports industry may be taken as not a real job or profession but people make lives out of playing video games. It is truly remarkable how far esports has come in these past couple of years. I also dreamed of becoming a professional Gamer and competing in esports. I still want to do it, but we will have to wait and see what the future holds.
Sources: https://www.roundhillinvestments.com/research/esports/how-do-esports-teams-make-money, https://www.ispo.com/en/markets/history-esports-how-it-all-began https://sporttechie.com/google-exclusive-streaming-rights-activision-blizzards-esports-leagues, https://www.espn.com/esports/story/_/page/FortWC_0428a/kyle-bugha-giersdorf-16-wins-fortnite-world-cup-singles-3-million
