Summary of the pro eSports player business: how do pro eSports players work? How do they make money?
Pro eSports players are professional gamers who compete in organized, multiplayer video game competitions for prize money. The most successful players can earn millions of dollars per year from prize money, sponsorships, and streaming contracts.
Most pro gamers start their careers by playing in online tournaments for small prizes. As they become more successful, they may be scouted by professional teams or signed to contracts by professional organizations. The top players in the world compete in major tournaments with huge prize pools, such as The International or the League of Legends World Championship. Players typically make the majority of their income from tournament winnings and sponsorship deals.
Tournament winnings can range from a few hundred dollars for smaller events to millions of dollars for the biggest tournaments. Sponsorship deals can be worth even more, with the top players earning millions of dollars per year from their sponsors. Many pro gamers also earn income from streaming their gameplay on platforms like Twitch.tv.
The top streamers can make hundreds of thousands of dollars per month from donations, subscriptions, and advertisements. Overall, the pro eSports player business is very lucrative for the top players in the world. The best players can earn millions of dollars per year from prize money, sponsorships, and streaming contracts.
List and description of the five most successful companies in the pro eSports player business. How big are they and what is their market value?
- Cloud9: Cloud9 is a North American eSports organization that was founded in 2013. The company has teams in a variety of games, including League of Legends, Counter-Strike: Global Offensive, and Overwatch. As of 2018, Cloud9 is worth $310 million.
- Team Liquid: Team Liquid is a professional gaming team founded in the Netherlands in 2000. The team has players in a variety of games, including Dota 2, Counter-Strike: Global Offensive, and Halo. As of 2018, Team Liquid is worth $200 million.
- SK Telecom T1: SK Telecom T1 is a South Korean eSports team that was founded in 2002. The team is best known for its success in the game League of Legends, where it has won three World Championships and was worth $170 million in 2018.
- OpTic Gaming: OpTic Gaming is an American eSports organization, founded in 2006. The company has teams in a variety of games, including Counter-Strike: Global Offensive, Halo, and Gears of War. As of 2018, OpTic Gaming was worth $150 million.
- Fnatic: Fnatic is a professional gaming team founded in the United Kingdom in 2004. The team has players in a variety of games, including Dota 2, Counter-Strike: Global Offensive, and League of Legends. As of 2018, Fnatic was valued at $120 million.
Income and profitability
List of the top three sources of revenue for pro eSports players (AKA how do they make money?) – including percentages of income and examples in US dollars for each
- Tournament Winnings: The vast majority of pro gamers’ income comes from tournament winnings. The prize pools for eSports tournaments have been growing rapidly in recent years, thanks in part to the popularity of crowdfunding platforms like Kickstarter and Indiegogo. The largest prize pool in eSports history was over $24 million for The International 2016, a Dota 2 tournament. The average pro gamer can expect to earn several thousand dollars per year from tournament winnings.
- Sponsorships: Many pro gamers also earn income from sponsorships. Big brands are starting to take notice of the growing eSports industry, and are eager to get their products in front of the large and engaged gaming audience. Some of the most popular sponsorships in eSports are from energy drink companies, like Red Bull and Monster Energy. These companies often sponsor entire teams, and individual gamers can earn several hundred dollars per month from these deals.
- Salaries: A small but growing number of pro gamers are also earning salaries from their teams. This is most common in the more established eSports, like Counter-Strike: Global Offensive and League of Legends. Salaries can vary widely, but the average pro gamer can expect to earn a few thousand dollars per month from their salary.
Pricing: What are average prices among pro eSports players
- High-end: Pro gaming is a very lucrative industry, with the top players earning millions of dollars per year. For example, the top Counter-Strike: Global Offensive player, Oleksandr “s1mple” Kostyliev, earned over $1 million in 2020 alone.
- Mid-market: While the top players in the world earn millions of dollars, the average pro gamer still does quite well for themselves. For example, the average salary for a League of Legends pro player in North America is around $105,000 per year.
- Low-end: Of course, not every pro gamer is earning six figures. In fact, many players are only earning a few thousand dollars per year. For example, the lowest-paid player in the Overwatch League only earned $50,000 in 2020.
What are the profit margins in the pro eSports player business? In a percentage range.
Profit margins for professional eSports players can vary greatly depending on a number of factors, such as the game they play, their level of success, and the tournaments they compete in. However, some estimates suggest that the average pro eSports player earns between $1,000 and $5,000 per month, with the top players earning much more.
This means that profit margins for pro eSports players can range from 20% to 80%, depending on their individual circumstances.
What is the cost to build a pro eSports player business? With an example.
It is possible to estimate the cost of building a small-scale pro eSports player business by considering the following expenses:
- Player salaries: The average salary for a pro eSports player is around $3,000 per month. This will vary depending on the game, the player’s results, and any sponsorship or prize money earnings. For a business with five players, this would amount to $15,000 per month in salaries.
- Tournament entry fees: Many pro eSports tournaments have entry fees which players must pay in order to compete. These fees can range from a few hundred dollars to several thousand dollars, depending on the tournament. For a business with five players competing in two tournaments per month, this could amount to $1,000 in tournament entry fees.
- Travel and accommodation: Pro eSports players often have to travel to different cities or countries to compete in tournaments. This can be expensive, especially with airfares and accommodation. For a business with five players travelling to two tournaments per month, this could cost $2,500 in travel and accommodation expenses.
- Equipment: Pro eSports players need gaming laptops or computers, headsets, mice, and keyboards that are gaming-ready. This equipment can be expensive, with some high-end gaming laptops costing over $2,000. For a business with five players, this could cost $10,000 in equipment expenses.
- Internet connection: A fast and reliable internet connection is essential for pro eSports players, as they need to be able to play online games without lag or interruption. A good internet connection can cost around $50 per month. For a business with five players, this could cost $250 per month in internet expenses. In total, it is possible to estimate that the cost of building a small-scale pro eSports player business would be around $30,000 per month. This figure does not include other potential costs such as coaching salaries or marketing expenses.
List and description of the top three ongoing expenses for pro eSports players. What percentage does each represent?
- Tournament entry fees: These can range from a few hundred dollars to several thousand, depending on the tournament. Players typically have to pay their own entry fees, although some teams may cover them.
- Travel expenses: Players often have to travel to different cities or countries for tournaments, and the costs can add up quickly.
- Equipment: A good gaming PC and peripherals can cost several thousand dollars, and players need to replace them regularly as technology improves.
History, strategy and challenges
What is the history of the pro eSports player business? With examples for each continent of the world.
The history of pro eSports player business can be traced back to the early days of competitive gaming. In the early 1990s, gaming tournaments were held in arcades and conventions, with the first major tournament being held at the Nintendo World Championships in 1990. These early tournaments were small scale and only attracted a handful of participants.
The first real pro eSports player business began to emerge in the late 1990s with the formation of professional gaming leagues and teams. These leagues and teams would compete in tournaments for prize money. The most notable of these early leagues was the Cyberathlete Professional League (CPL), which was founded in 1997. The CPL was responsible for hosting some of the earliest and most popular gaming tournaments, such as the QuakeCon tournament.
Other professional gaming leagues soon followed suit, such as the World Cyber Games (WCG) and Major League Gaming (MLG). These leagues helped to legitimize eSports and attract more mainstream attention. By the early 2000s, eSports had become a global phenomenon, with tournaments being held all over the world. Today, eSports is a multi-million dollar industry, with professional gamers earning salaries and prize money from competing in tournaments. The biggest tournaments can offer prize pools of over $10 million.