How Do Esport Teams Make Money?

How do professional esport teams make money? It’s a question with a lot of answers, but we’ve got you covered with everything you need to know.

Introduction

While professional sports teams have been around for centuries, esport teams are a relatively new phenomenon. So, how do esport teams make money?

The answer is: through a variety of revenue streams. Esport teams generate income from things like sponsorships, advertisements, merchandise sales, and ticket sales to events. Some of the biggest and most successful esport teams in the world are able to bring in millions of dollars each year.

While there are still many smaller esport teams struggling to make ends meet, the industry as a whole is growing at an incredible rate. It’s estimated that by 2022, the global esports economy will be worth nearly $1.6 billion. With such rapid growth, it’s likely that esport team’s revenue streams will continue to diversify and increase in the coming years.

How Do Esports Teams Make Money?

Esports teams make money in a variety of ways. The most common way is through sponsorships and partnerships. Brands will pay esports teams to feature their products and/or services. Most of the time, these sponsorships are in the form of advertising. Esports teams will also make money through prize winnings.

Sponsorships

Most of the revenue for esports teams comes from sponsorships. Brands are quickly cottoning on to the fact that there are a lot of young people with money to spend who are into gaming, and they’re happy to invest in teams and events in order to reach this demographic.

There are a few different ways that brands can get involved with sponsorship, but the most common is simply paying an esports team or organization to feature their logos on players’ jerseys, or on other team merchandise. Some companies also sponsor specific players or events, and may even provide prize money for tournament winners.

Sponsorships can be a great way for brands to reach a new audience, and they’re often more effective than traditional advertising because they’re associated with positive associations (like winning) rather than directly selling a product. For esports teams, sponsorships are essential for covering operating costs and turning a profit.

Media Rights

Media rights are one of the most common sources of revenue for esports teams. In a traditional sports context, media rights refer to the fees charged to broadcast entities in exchange for the exclusive right to show games on television or other forms of media. In the esports world, these rights are typically sold to streaming platforms like Twitch or YouTube, who then broadcast the matches to audiences around the world.

While some esports organizations do generate revenue from advertising during their broadcasts, most of the money comes from these media rights deals. For example, in 2018 the Overwatch League signed a two-year deal with Twitch that was reportedly worth $90 million dollars. This deal gave Twitch exclusive broadcasting rights for all Overwatch League matches, and allowed them to sell advertising during breaks in the action.

In addition to these platform-specific deals, many esports teams also sell their own media rights directly to sponsors. For example, a company might pay an organization to have their logo displayed on all team uniforms, or to have their product featured in pre-game hype videos shown before matches begin. These types of sponsorship deals are often worth millions of dollars per year for the most successful organizations.

Tournaments and Prizes

Most professional esports teams make the majority of their money through tournaments and prizes. Competitive gaming has grown exponentially in recent years, and with that growth has come a rise in the amount of prize money up for grabs. The largest esports tournament in the world — The International — saw its prize pool surpass $20 million in 2017, with the winner taking home over $10 million. Other major tournaments offer similar payouts, and many smaller tournaments offer prize pools of $10,000 or more.

In addition to tournament winnings, some esports organizations also earn revenue from things like fan donations, merchandise sales, and sponsorships. However, these forms of income are generally much less reliable than tournament winnings and prizing, which is why most teams focus on becoming competitive enough to earn a spot in major competitions.

Merchandise and Apparel

In order to make money, esports teams need to find ways to monetize their fan base. One of the most common ways for teams to do this is through merchandise and apparel sales. Teams will often sell branded shirts, hats, and other clothing items through their websites and at events. This is a great way for teams to make money, as they are able to reach a wide audience and generate revenue from sales.

Another way that esports teams make money is through sponsorships. Teams will often partner with companies who are looking to reach the esports market. These sponsorships can take many forms, but they typically involve the team promoting the sponsor’s product or service. In exchange for this promotion, the sponsor will provide the team with financial compensation. This is a great way for teams to generate revenue, as they can secure ongoing sponsorships from companies that want to reach their target audience.

Conclusion

The revenue of an esports team depends on many factors, such as the game they play, their results, their popularity, and the number of sponsors they have.

Teams make most of their money from sponsorships and investments. Bigger organizations also generate revenue from ticket sales, merchandise, and ads. However, these numbers vary greatly from one team to another.

The best way to increase your chances of making money as an esports team is to be popular and to play a popular game. Results also matter, so being good at what you do is important. If you can achieve these things, then you will be in a good position to make money from sponsorships and other sources.