We are now living in a world where our childhood dreams of “playing video games for a living” have actually become reality. With top-earning players like Peter Dager (also known as ppd, a member of EG’s DOTA 2 team) taking home a pay check exceeding $1.5 million last year, succeeding in eSports doesn’t just pay the bills, it can make for an extremely lucrative career. If I were to ask where all this money is coming from, the first answer on everyone’s minds would be…


Image: https://www.twitch.tv/year/2015

While eSports have existed since the ‘90s or earlier, it was only when this fledgling streaming platform entered the game that the industry really took off. Twitch originated as a gaming off-shoot of justin.tv, and it has expanded massively since its launch in 2011 (even going on to eclipse its parent site completely). With online giants like Google now taking notice, it was only a matter of time until twitch.tv received major financial backing, and that came with the $970million acquisition of Twitch by Amazon in August 2014.

Since then, the platform has only continued to grow, competing seriously with YouTube for viewer attention. It’s often the case for individual streamers that their YouTube and Twitch accounts go hand-in-hand, offering the best of both worlds for live interaction, video on demand, sponsorships and monetization.

It’s also particularly noteworthy that top players who wielded fame and influence within their respective communities made use of the platform too – using their skill and knowledge to pull in far more viewers. By doing so, they began earning a more stable income instead of relying solely on tournament placements. The platform became a breeding ground for talent and dedication in players, encouraging many more people to take their gaming to a competitive level. With more players, more games, and more frequent events that are becoming easily accessible to watch live, viewership on Twitch grew exponentially.

Encouraging a competitive environment

It’s not just the tournament winners and Twitch who are profiting though; everyone wants in on the eSports honeypot. For one, game developers themselves benefit greatly from fostering an environment that is conducive to their game being played as sport. The extremely popular competitive game League of Legends is making more than $1billion a year now, and this is a game that is completely free to play, with players ranging from the casual to the elite.

Super Smash Brothers Melee is another example of this, which has garnered a tightly-knit community and cult competitive following since as early as 2002. This is in spite of a lack of support from its developer Nintendo, who did not originally intend for it to be played competitively. While the pro scene for this game was vibrant, it wasn’t until the rise of streaming platforms that its exposure rose. This in turn has paved the way for Nintendo to support the competitive scene, making use of the popularity of Melee to bolster the success of its sequels for succeeding consoles - the Wii and Wii U. Nowadays, Smash Bros. for Wii U and the more than a decade-old Melee can be seen alongside countless other competitive games at tournaments like Evo, Dreamhack and MLG.

eSports as business and lifestyle

image: http://superdata-research.myshopify.com/products/esports-market-brief-2015

The events themselves make for even more opportunities, with jobs created, venues hired, and sponsorship money flowing in. The upcoming TwitchCon 2016 has entrance passes going for well over $100 apiece, but that isn’t even the greatest source of money. Large companies and organisations have recognised the untapped viewership and potential marketing power they could gain by getting in on eSports. As a result, teams and players often receive sponsorships from companies like Samsung and Red Bull, and specialist electronics suppliers like Razr, BenQ and Logitech can market directly to their target demographic. While advertising and sponsorship deals do make up the majority of the revenue, it would be unwise to overlook other avenues that still comprise a sizable share of the money in eSports.

To fans, gaming is an integral part of their lifestyle; they don’t just play the games and watch the streams, they like to keep up to date with the competitive scene, treating their favourite players and teams like celebrities—which by all rights they are. TSM, a popular League of Legends team, even has their own documentary. As such, with the fans heavy personal investment satisfied by their gaming interest, there comes an opportunity for the sale of merchandise and more.

Another interesting sector popping up is that of eSports betting. These fans aren’t really that different from regular sports fans: team loyalty, trash-talking and fantasy leagues, combined with the primarily online audience, have allowed eSports betting to flourish. Right alongside regular sports, eSports specific sections can now be seen on online betting websites like Betsafe, Betway and bet365. Reports state that online eSports betting has taken over that of other more conventional disciplines like Rugby and Golf. Nowadays it’s not hard to imagine a hyped up fan looking up the odds for this weekend’s Starcraft 2 GSL finals and placing a bet on their favorite player.

Image: https://newzoo.com/wp-content/uploads/2011/06/Newzoo-eSports-Conference-Slides-2015.pdf (slide 24)

The Future

While predictions based on past data suggest huge growth for eSports in the coming years, some voices have been sceptical, positing that the market is close to becoming saturated, with limited potential growth when its capacity is reached. As such a new and volatile sector that is inexorably linked to business, entertainment and technology, it’s really anyone’s say on what the future holds for eSports. If you’d like to weigh in on the discussion, let us know in the comments below!

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Last Updated: Apr 28, 2016

About The Author

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James, a lifelong gamer, is a freelance writer who occasionally contributes to Ten Ton Hammer.