Recently there has been a huge amount of money floating around in not just one or two esports but in almost all of the major ones. Teams are being bought up in Overwatch for upward of $1 million; prize pools in Dota 2 are reaching $18 million; League of Legends is pumping, presumably, thousands into buying players to save a team from getting relegated.
Struggling North American League of Legends team Team Liquid (TL) have been sitting at the bottom of the standings with only a few weeks to go before playoffs and relegations. As a last-ditch attempt to avoid relegations and stay cemented in the league, the team moved players around and hired former Team SoloMid superstar player Yiliang “Doublelift” Peng out of retirement to help save the struggling team. In addition to Peng, TL also borrowed Adrian “Adrian” Ma from fellow team Phoenix1 to help bolster their new made-of-money roster.
Where exactly is all this money coming from? There are three large groups that are major contributors: investors, sponsors, and the community.
The community of an esport is actually a huge player in the growing industry wealth. Many tournaments are now becoming crowdfunded through microtransactions by the players, and the amount that players can spend on games is extremely high.
Sponsors and investors have been around in the industry since before you could even call it an industry. When no one else was there, who was there for you? Large companies and rich people who want to help support the eventual growth of esports, that’s who. Now, more and more companies, individuals, and even cities are pouring support and wealth into teams and games; some big names include Coca-Cola, Shaquille O’Neal, Rick Fox, Red Bull, and Washington, DC (yes, you read that right).
Where the industry goes from here is unknown, but things are looking up for the still-growing scene. Market intelligence company Newzoo predicts that the industry’s revenue will grow to nearly $700 million by the end of this year, and that the industry will be near $1.488 billion by 2020.
These are large figures for an industry that’s still, in the big picture, quite new.
Keep an eye on esports, because you never know who’ll be the next big name to contribute to the industry.