The Economics of Esports: Prize Pools, Sponsorships, and Revenue Streams

It seems one of the buzzwords in the iGaming industry is esports! These are tournaments that are turning youngsters into multi-millionaires overnight!

At first, it was about a young chap named Wong, who seems to have accomplished everything in life despite being in his twenties. He had the money, confidence, and swag that would make Phil Ivey or Daniel Negreanu green with envy! But as we went down the rabbit hole, it became apparent that anyone could easily become the next Wong. These are my findings as far as esports prize pools, sponsorships, and revenue streams are concerned. 

Who Are Esports Players?

Basically, esports players are professional gamers who compete in the field of video games. Many of them earn their living playing games such as DOTA 2, League of Legends (LoL), Overwatch, Fortnite, Minecraft, Counter-Strike, FIFA, and Halo, among many others. Electric sports players don’t usually start as big-time earners or names in the industry. On the contrary, they play in underground competitions and tournaments.

Through these competitions and tournaments, they earn recognition from other gaming enthusiasts and sponsors, who help them climb the ladder to higher ranks. In esports gaming, you can go on a solo venture or play as a team. So far, most of the successful brands in the esports niche are those that partner as a team. 

Esports Sponsorships

Electronic sports sponsorships are no different from the regular sponsorships you see on a day-to-day basis. They are marketing partnerships between an esports entity, such as a team, player, or event, and a brand. The brand provides the esports entity with material or financial support in exchange for endorsement, exposure, or advertisement to a certain audience. The sponsorship is usually based on performance, such as bonuses or prize money, or it could be on fixed terms like product supply or monthly payments.

Regardless of what sponsors bring to the table, they are the most important part of any esports competition or tournament. They not only help the esports entities meet their costs, such as travel equipment and salaries but also enhance the credibility of the competition. For example, when Red Bull is the sole sponsor for a competition, it is bound to attract big names and a massive viewer audience to the competition. 

Esports Prize Pools

Prize pools vary from one competition to another. Again, the more reputable the sponsor behind the competition, the bigger the expected prize pool. However, this is usually not a guarantee or the case. As seen in The International 2020, players pooled a massive $40,018,195 prize money for the competition. This is so far the largest amount any competition has ever given players a chance to win.

However, it’s not the only one with mind-blowing prize money. For example, The 2019 Fortnite World Cup Finals had a massive $30 million jackpot to the winner. Just recently, the Riyadh Masters allowed the lucky player to walk away with a whopping $15 million. 

Revenue Streams

Sponsors are an important part of the electronic sports community. However, they are not the only ones who can help players or teams generate revenue. There are plenty of other ways to generate revenue, for example, create an online casino account, perform a vulkan vegas login, and play online slots, but mostly through revenue streams. These include several ways, such as:

• Teams/players selling their merchandise online while streaming on different platforms. 
• Subscriptions and donations from fans across the world. Subscriptions give players access to exclusive services.
• Affiliate marketing where the player teams with different brands to promote their services on their platform(s)

Highest Earners in Esports 

You will be shocked to know how much some of the highest-paid esports gamers earn: millions! It’s no wonder why everyone is looking to become an esports player. While there are thousands of players minting money from the industry, these were some of the top earners in 2023: 

• Johan Sundstein a.k.a N0tail – $7 million;
• Jesse Vainikka a.k.a JerAx – $6.5 million;
• Kyle Giersdorf a.k.a Bugha – $3.2 million.

Will You Join the Best of the Best?

As mentioned, anyone can become an esports player whenever they are ready to become one! In fact, as the industry evolves, many potential opportunities are created every day for ordinary people to become the next millionaires in this industry. The only barrier between you and becoming the next big thing is your inability and lack of interest in understanding more about the sport.