Esports in the last two decades has become a billion-dollar industry on a trajectory that would make NASA jealous. Players are celebrities, tournaments fill arenas with screaming fans, and sponsors are increasingly injecting real money into the esports ecosystem.
But where is all the money coming from? Sponsorship and advertising certainly plays a major role. The biggest backers so far have been technology companies including Microsoft, Samsung and Intel, however increasingly consumer brands are investing in eSports, with the likes of McDonald’s, Coca-Cola and Nike all contributing to an estimated advertising and sponsorship revenue of 1.5 billion in 2017 alone. The rest of the income is derived from investment from game publishers (426 million this year), media rights (350 million) and ticket and merchandise sales (235 million), respectively.
Indeed, the players are like rock stars. Or are they? Esports skeptics would hold that the values of teams and the industry itself may be experiencing a bubble. As more than one observer has noted, the same people who report its success stand to profit from it. And like any startup, enormous investments power PR, which enhances valuations, which lures additional investment and keeps the entire game operating. And so the cycle goes on until, as it always does, the music stops. At that time, invested parties may be looking for a chair to sit in.
Some of the most popular esport games are:
- League of Legends
Total prize money: $8,948,000
Most viewed tournament: League of Legends Worlds
- Fortnite
Total prize money: $64,338,000
Most viewed tournament: Fortnite World Cup
