How do Esports Teams Make Money?
In 2022, the esports industry will garner over 1.5 billion dollars in revenue. There are a few ways that esports companies earn money.
Tournament Winnings
Industry professionals say tournament winnings are the easiest way to earn money in Esports.
I tend to agree when they say this, but earning money this way takes a lot more than it appears to be on the surface.
- Get a Team requiring contracts and buy-ins or salary investment.
- Entering Tournaments
Once you create the team, you have to enter tournaments. For example, in the Valorant scene, many tournaments are top-heavy, and prizes are decent. But you have to remember, there are a lot of good teams out there, even at Tier 2 & 3. In Hearthstone there are less and less tournaments for esports teams.
- Keep the Team – This requires solid contracts and good management. It’s one thing creating a team, but keeping that team motivated and loyal as you enter tournaments is harder. It takes time to win, and the probability of entering your first tournament and winning it is not high.
The more tournaments you enter, the better your chance to earn money. Still, it’s not as easy as it looks on the surface. Like I said at the beginning, Tournament Winnings for an esports team require you and your team to be in it for the long haul.
Streaming and Content Creation
Creating content and streaming are also long-term commitments. The competition for getting noticed in the content creation space is challenging. If you stick with it and get notoriety, a consistent income can come from it.
Content creation and streaming are essential to establishing a brand. Without bolstering and defining your brand, winning is not enough unless you have a monster team that often wins and competes against the best.
When I started HypeHorizen, my goal was to assist people in branding themselves and our team. So, when they win, they would be in a better position to earn money from the following two ways you can make money in the esports space.
Branding Merchandise
Merchandise Sales
Merchandise is a way for fledgling esports teams to do what I call “self-sponsor”. It’s part of establishing a fan base and can hedge the variance associated with building a team. In the beginning, selling merchandise can be a great way to get a team through times where you’re not winning. Still, at some point, your team’s image must be that of a competitive team image, or else you’ll find yourself unable to sell merch.
To sell merch, a team has to do the above two steps. Growing their individual and team social profile and social footprint are huge.
Once you have these first three parts of earning revenue, the next piece of the revenue pie is
Sponsors and Partnerships
As viewership of esports tournaments grows, brand deal partnerships and sponsorships. Sponsorships make up the majority of esports revenue. However, without establishing a brand through streaming, content creation or winning, an esports team is not in a position to be sponsored.
In college, I auditioned to be a professional baseball player. We had to learn how to do interviews and handle the media off the field. Even at minor league games, we were encouraged to be professional and make ourselves marketable.
All the above takes time and investment. A player and an Esports Team’s social media content must be approachable. It boils down to winning and competing; however, the brand must present itself in a manner that can attract investment. Sponsors are the life’s blood of revenue in the esports industry.
