The industry that is esports started small, not many years ago – now it’s a billion dollar behemoth that is growing steadily. It’s a self-sustaining industry consisting of too many different areas and elements to list them properly – and it’s all built on a hobby that was dismissed as being for kids a few decades ago.
Of course, the cornerstone of esports are the games that are being played – one such example is League of Legends. Probably one of the biggest esports in the world, its maker Riot Games recently started selling franchises for the game…at $10 million a pop.
© Riot Games
Activision Blizzard did the same for their Overwatch League…except they charged double that. For the paltry price of $20 million, people/organisations like the New York Yankees, Houston Rockets, Robert Kraft and Magic Johnson bought in…and they certainly didn’t make a loss.
Nearly a year later, those LoL franchises are valued at $50 million now, whereas the Overwatch ones go as high as $80 million. All in all, those numbers are tiny – the overall growth of esports revenues this year alone will exceed $906 million this year. By 2021, the yearly increase will be over $1.65 billion – now those are some impressive numbers.
The most money is, paradoxically in media rights at the moment – an example of this would be the multi-year deal Blizzard signed with Walt Disney to bring Overwatch to Disney-owned TV channels such as ESPN, ABC and Disney XD. Twitch too, is a major player when it comes to media rights.
The next biggest chunk are the players. While players like Ninja (Tyler Blevins) are estimated to make around 6-7 figures per month, organisations like Cloud9 are worth much, much more, and they are the ones that own the different teams. As a matter of fact Cloud9 is the most valuable company in this bracket, worth over $310 million alone.
© Ninja | RedBull
Close behind in value are Team SoloMid (wroth $250 million), Team Liquid (worth $200 million) and Echo Fox (worth $150 million). Of course names like OpTic Gaming, Fnatic, Gen G. Esports, Immortals and Envy Gaming are up there as well – all of them are worth around $100 million and have yearly revenues between $5 and $10 million per year.
That’s hardly pocket change of course…and yet, most of the companies on the list – with the exception of Team SoloMid – are cashflow-negative. In other words, they spend more than they earn. Despite this, most of them are only increasing their value and revenue – the key here is, of course, investment.
Sponsorship deals as well as donations and even earnings from tournament wins are one of the bigger sources of incomes for teams, regardless of what game they play. It’s worth noting that it’s rare that these deals are worth millions on their own – no, usually, smaller deals add up over time. Smaller investments from different sources tend to be more sustainable than individual huge investments. Exceptions such as Disney’s deal with Blizzard exist too of course – just goes to show that the world of esports is as diverse as its fans are!
