The competitive gaming market is projected to reach $1.5 billion in revenue by 2020, making it one of the fastest-growing industries globally. Esports teams make money through sponsorship, selling merchandise, and prize money, while brands can capitalize on esports through sponsorship, advertising, and product placement. Some of the largest brands in esports include Coca-Cola, Intel, and Nissan. As the esports industry continues to grow, more opportunities arise for both teams and brands to capitalize on this lucrative market. The esports industry shows no signs of slowing down, and we can expect to see more creative ways to make money in esports.
The Business of Esports: How Teams and Brands Capitalize on Competitive Gaming
Esports have exploded into one of the fastest-growing industries in the world. With over 2.5 billion gamers globally, the competitive gaming market is projected to reach $1.5 billion in revenue by 2020. As the industry continues to grow, more opportunities arise for teams and brands to capitalize on this lucrative market. In this article, we will discuss the different ways that teams and brands are making money from esports.
Esports Teams
Esports teams operate in a similar manner to traditional sports teams. They typically have a roster of players and compete in various tournaments and leagues. However, the revenue streams for esports teams are vastly different from traditional sports teams. Here are some of the ways that esports teams make money:
Sponsorship
One of the most significant sources of revenue for esports teams comes from sponsorship deals. Sponsors will pay teams to advertise their products or services through team jerseys, social media, and other forms of advertising. Some of the largest esports team sponsorships include Cloud9’s deal with Red Bull and Team Liquid’s partnership with Alienware.
Merchandise
Esports teams also make money by selling merchandise. Items like jerseys, hats, and mousepads are popular among fans. Teams can sell their merchandise online and at events, which can bring in significant revenue.
Prize Money
Esports teams can also earn prize money from winning tournaments. The prize pools for esports tournaments can be quite substantial. For example, The International, a Dota 2 tournament, had a prize pool of $34 million in 2019.
Brands
Brands have recognized the potential of the esports market and are now investing heavily in esports. Here are some of the ways that brands are capitalizing on esports:
Sponsorship
Similar to esports teams, brands can sponsor tournaments, leagues, and individual players. Brands will pay a fee for the right to advertise their products during tournaments or on player jerseys. Some of the largest brands in esports include Coca-Cola, Intel, and Nissan.
Advertising
Esports events draw massive audiences, which presents an excellent opportunity for brands to advertise their products. Brands can run ads during live streams or sponsor a segment of the event. For example, Monster Energy sponsored the player intros of the Overwatch League.
Product Placement
Product placement is another way that brands can capitalize on esports. Brands can pay to have their products appear in games or on streams. For example, Red Bull has a deal with the game League of Legends, where players can drink in-game Red Bull to gain stat bonuses.
Conclusion
The esports industry shows no signs of slowing down, and as it continues to grow, opportunities for teams and brands to make money will continue to increase. Esports teams can make money through sponsorships, merchandise, and prize money, while brands can capitalize on esports through sponsorship, advertising, and product placement. As the industry grows, we can expect to see more creative ways for teams and brands to make money in esports.