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How Do Esports Team and Organizations Make Money?

How Do Esports Team and Organizations Make Money?

A new craze of esports teams has been sweeping the globe for the past few years. It’s gotten so popular that even professional sports teams in the NHL and NBA are forming their own teams. However, you may be wondering how do esports teams make money?

Esports teams and organizations make money through tournaments, sponsorships, streaming, and merchandise sales. The esports industry is expected to generate $1.6 billion in revenue by 2024.

In this article, we will cover how esports teams make a profit from each of the aforementioned categories as well as some of the potential earnings from each category.

How Much Do Esports Teams Make by Winning Tournaments?

One of the easiest ways to make money as an esports team is simply by being good at esports. Teams compete in tournaments of cash prizes that can be as high as $8,300 per player. 

While this is a great way to make a large amount of cash quickly, it’s not a sustainable or reliable source of income. The problem is that there is no guarantee that you will win every or even any tournament.

While teams that place lower than first place do make some profits, it’s not nearly enough to live off of. For this reason, amateur and semi-professional esports players rely on tournament winnings to support their passion, while professional sports teams and organizations turn to other sources to make a profit.

Do Esports Teams Sign Popular Streamers?

One tactic that esports teams use for advertising is signing popular streamers. Some of the top videogame streamers can earn as much as $1,500 a week from streaming alone and will have several thousand people watching their channel at a time.

Esports teams will hire popular streamers to market their teams on their channels, but will also have their players stream online as an additional source of revenue. 

Do Esports Teams Make Money off Sponsorships?

Over 60% of revenue in the esports industry is attributed to sponsorships. The gaming industry has recognized the influence that popular esports teams have over their market and are willing to pay big bucks to have them advertise their products.

Gaming companies will often pay players to wear their headsets or use other accessories. Additionally, esports teams will sell advertising space on their jerseys.

Do Esports Teams Make Money off Merchandise and Ticket Sales?

Esports teams have officially sponsored gear just like every other professional sports team. Some teams will even partner with other companies to make special jerseys for unique tournaments.

In addition to their own merchandise, esports teams will sell gaming accessories while streaming or have links to their preferred equipment on their team sites. They often will make a percentage of the profits for any sales that were made as a result of their advertising.

Popular leagues and tournaments attract a crowd. These tournaments and leagues will rent out large stadiums and charge fans a premium for coming to watch their favorite players in person. Teams involved in the leagues and tournaments will split the profits from ticket sales.

Do Esports Leagues and Tournaments Sell Media Rights?

Fans who aren’t able to attend tournaments or league games in person want to watch the games on their TV or computer. Just like other professional sports leagues, esports leagues will sell the media rights to certain channels and streaming services. 

One of the more popular streaming services that consistently buys these media rights is Twitch. Teams involved in the tournaments will often split profits from the media rights sale.

Does the Type of Game Effect How Much an Esports Team Makes?

Not all games generate the same kind of revenue for esports teams. The more popular a game is the more revenue a team will make from competing. Some of the top-earning games in 2021 were:

  • Dota 2
  • Counter-Strike: Global Offensive
  • Fortnite
  • League of Legends
  • StarCraft II

Esports organizations will often diversify across several games in order to ensure that they don’t lose revenue if one of the games loses favor.

How Much Do Esports Gamers Make?

One of the challenges for esports teams is to make playing for their team more lucrative than playing as an individual. In order to attract the top talent, esports organizations will pay gamers a salary between $40,000 to $60,000 a year. Often gamers can make additional earnings by streaming on the side.

The Future of Esports 

While esports has been slowly gaining favor over the past 5 to 10 years, we have yet to see the peak of esports revenue and popularity. Over the next decade, it is likely that the esports market will grow even larger and televised games and leagues will become more popular.