Examining the Rise and Continued Growth of Competitive Gaming

The esports industry is positively thriving, and no one could have predicted how much it would grow in the last five years. Originally, esports took a back seat and struggled to gain mainstream attention and backing. However, as video game popularity continued to rise, so did the esports industry.

You can now find esports competitions all over the world that generate huge interest and have prize pools for the participating teams that reach millions of dollars. There are also mainstream publications publishing guides on how to watch and bet on games like Fortnite, like this example: https://www.jaxon.gg/esports-betting/fortnite/how-to-bet. It’s safe to say that esports are now a global phenomenon, so that begs the question, how is the esports industry funded and how do the teams and organizations involved generate revenue?

Understanding the esports industry: The stats and figures

Statista provides an interesting look at esports worldwide including industry revenue and user stats. The main points of these figures are summarized below:

• eSports revenue should surpass $4.5 billion by the end of 2025.
• Revenue growth is expected to be 5.5%+ annually.
• There are an expected 800+ million eSports players and this could reach 900m by 2029.
• eSports betting accounts for around $2.8 billion of annual revenue.
• The US has the largest eSports market.

This global revenue surpasses that of many traditional sports, showcasing just how popular and lucrative eSports has become. It’s also interesting to see the volume of revenue generated from esports betting and how much this accounts for of the overall industry revenue.

Perhaps one of the more unexpected stats is the fact that the US has the largest revenue generation. Gaming has always been big in the US, but when it comes to eSport titles, these have traditionally been much more popular in Asian countries like South Korea and Japan.

How do esports teams and organizations generate revenue?

Just like traditional sports, eSports teams and tournaments get revenue from a variety of streams. Below are some of the main ones. Today, eSports teams and players have multiple revenue sources aside from the potential tournament and competition prize money. This can include:

• Competition prize money
• Live streaming revenue
• Merchandise
• Sponsorship revenue

Prize money is still a big revenue stream and all eSports competitors ultimately want to bring in the top prizes. The biggest tournaments in the world have ridiculous prize money and not just for those who finish in first place.

Teams and players are also often streamers on sites like Twitch and YouTube and use these as additional income streams. They might have an online store too where they sell merchandise to their fans. Lastly, professional eSports teams also have sponsorship deals with peripheral and gaming part manufacturers, plus complementary businesses like energy drink manufacturers.

Even for teams that aren’t winning a lot in prize money, performing well at a tournament can still boost their profile. This serves as marketing to draw more viewers and customers for the team’s other revenue streams.

Esports business revenue

While the players and teams who compete in esports competitions have multiple revenue streams, the businesses that organize and host the events must also be profitable. Generally, these businesses generate revenue in the following ways:

• Subscriptions/viewing fees from users
• Sponsorships from eSports betting sites
• Sponsorships from game developers
• Tournament registration fees

A large part of their revenue is derived from viewership fees. Some competitions will charge a pay-per-view fee for major tournaments in a similar manner to boxing PPV events, or may require fans to have a monthly subscription to see the action. For events that aren’t online-only, many will also sell tickets for the venue where the tournament will take place.

Sponsorships then play a major role in revenue generation. esports betting sites have become one of the main sponsors for events and teams and these plough huge amounts of money into the esports betting ecosystem. Fans and gamers alike will use these sites to place bets on their favorite teams.

The game developers themselves will often partner with eSports organizations and provide funding as they get promotion for their games in return. Additionally, sponsors with a range of complementary businesses such as PC developers, and peripheral manufacturers like Razer and Logitech act as a major source of revenue for esports businesses.

Esports business will thrive in 2024 and beyond

As you can see from the above, everything seems positive for the eSports industry. It’s not difficult to see a future where eSports rivals traditional sports in terms of viewership, revenue, and global appeal. With developers like EA Sports and Activision continuing to bring out games that are suitable for eSports, there is plenty of room for the industry to grow.

Where traditional sports often require certain physical attributes to excel at, eSports have the potential to be more accessible. After all, anyone has the ability to pick up a game and start playing, regardless of their physical stature or condition.

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