It’s no secret that organisations such as FaZe, Cloud 9, Evil Geniuses and Team Liquid require large amounts of capital in order to operate – so how exactly do these eSports titans make their money? We delve deep into the revenue streams of gaming teams around the world.
Keep in mind that only a limited number of investors are making large profits, while some are even running at a loss. The reason these non-profitable companies still exist is that stakeholders see the eSports sector as a market for the future, which they believe will continue explode with popularity year after year.
From the brands featured on their player jerseys to the products they’re using to compete, many elements of a professional gaming team can be influential and therefore monetized. Sponsorships are the single biggest earner for eSports organizations, making up to 80% of their overall income. Intel, T-Mobile, G Fuel and BenQ are a few examples of sponsors that have offered lucrative deals to various orgs in the past.
Most competitive teams now have an online store (As well as a pop-up shop that travels to events) stocked up with shirts, hoodies, cups and hats. In addition to selling physical items, eSport brands take a percentage of collaborations made with developers – Such as weapon skins and other in-game customizations. Call of Duty did this well, partnering with their league competitors to provide team packs, available to purchase for a one-time charge of $9.99. The packs contain things such as camos, weapon charms and outfits branded with the colours and logo of the team.
Ever seen a stream or YouTube video from a gaming team with a link to various products in the description? If this link gets used to make a purchase, a portion of the sale is given to the directors. The org itself claiming money from affiliate sales is very rare however – most enable their players / content creators to have their own codes and earn for themselves.
Revenue Generated From Events
Many people may think that gaming teams only get paid during events if they play well and place highly – However, this is untrue when it comes to huge names. Besides the prize money, some organisations will be given either a cut of the total event takings, or simply a set fee for attending. It’s common practice for event holders to offer a percentage of ticket sales to organisations, which acts as an incentive for the competition to be heavily promoted across their respective social media channels.
These are the main ways that gaming organisations currently make their capital. As we mentioned in the introduction of this article, eSports is very much a market for the future and there is no doubt that additional sources of revenue will appear as the industry continues to evolve.