Who would have thought a decade ago that esports would be continually increasing in revenue? Let alone become a billion-dollar industry! The esports industry has become a great opportunity for investments and overall financial success! Because of the growing success and popularity of esports in the last 10 years, there are several ways that esports are able to achieve financial profit.
Merchandise: When you become a die-hard fan of a sport, what typically happens? You start to buy their merchandise, right? Players jerseys, sweatshirts, beanies, posters, etc. The same goes for esports. Putting esport game logos and symbols on apparel and merchandise drive popularity and video game sales up! However, compared to traditional sports, esports’ merchandise sales are lower because of the lack of physical attendance to esports. Even though esports merchandise tends to bring in a smaller fragment of revenue, it’s still an important component!
Advertising: Did you know that esport advertisements generate almost 60% of the esport industry revenue? Advertising during esport events, television and Youtube commercials, and pop-up ads are the most effective way for esports to spread the news about deals, events, and even merchandise! Even advertising to players’ individual streams has become a source of higher revenue.
New Content: Another way that esports make money is through new content creation! Gamers who post new videos on Youtube about the esports they’re playing and how the teams are doing compared to each other generate a lot of advertisement revenue. Esport teams that post videos and photos on social media platforms and/or Youtube reaches not just esports fan audiences, but other gamers (and non-gamers) who might be interested in esports or enjoy watching others play them on Youtube.
Investments: Like any starting company or franchise, they must first receive investments in order to pay salaries, capital, and franchising costs. The same goes for esports. In 2018, esports investments rose to a record of $4.5 billion in investments! There are hundreds of different ways to get invested with esports: team organizing, merchandise products, stadiums, projects, and even events!
Sponsors: Finally, the glue that holds together the financial aspect of esports is the sponsors. You might be asking, “How do esport Leagues and National/International tournaments get funds?” Well, about 90% of esports’ revenue comes from sponsorships When a certain company sponsors esports, this allows them to gain more recognition across different platforms and create even more sponsorship opportunities. Esport sponsorships can reach different demographics that standard marketers cannot and usually advertise the partnership between the esport and sponsor (jerseys with sponsor logo on them, etc.)
The list of financial possibilities with esports doesn’t stop there! In the last decade, the esport industry has done nothing but climb upwards which allows for hundreds, if not thousands of opportunities to create new content, partner with sponsors, and continue to invest. As we roll into 2021, we are looking forward to seeing how the esport industry will continue to grow and what new things are waiting around the corner!
The Street Cred Team