The world of esports is exciting for gamers. Playing video games professionally and earning a steady income from an esports team is now a reality for players worldwide. But how do these teams make enough money to pay their players?

Esports teams vary in size, which affects how they earn money. Smaller or newer teams often rely on prize money from tournaments. On the other hand, larger, well-established teams operate like full businesses. They have bigger audiences and multiple income streams. nagaland lottery Let’s break down how they make money.

1. Prize Money

Many people think esports teams earn most of their money from winning tournaments, but that’s not entirely true. While they do win prize money, a large portion goes to the players as bonuses. The amount the team keeps depends on the game and the team’s policies.

For newer teams, prize money is crucial because they haven’t built a big fanbase yet to earn through other means. This is especially true in regions like South Asia, Africa, and Southeast Asia, where esports is still growing. Winning is great, but it’s not the main source of income for most teams.

2. Sponsorships

Sponsorships are a major way esports teams make money. Teams with large fanbases attract brands that want to reach younger audiences. In exchange for promoting these brands, teams get paid. For example:

• Team Vitality renewed a deal with JBL Quantum.

• FaZe Clan partnered with GHOST to launch an energy drink.

While exact amounts are often kept private, these deals can range from thousands to millions of dollars. Sponsorships help teams grow, engage fans, and give brands access to a younger audience. It’s a win-win for both sides.

3. Merchandise Sales

Teams also earn money by selling branded merchandise like jerseys, hats, t-shirts, and hoodies. For example:

• The North American team 100 Thieves made $2.5 million in one month from their clothing line.

• G2 Esports partnered with Ralph Lauren to create fashionable apparel.

Selling merchandise not only brings in revenue but also helps teams attract better sponsorship deals. When done well, it’s a great way to promote the team’s brand and make money.

4. League Partnerships

Esports teams are often tied to specific games and leagues. Some leagues have shifted from closed systems to more open formats, allowing new teams to join. Teams in established leagues often receive a share of the league’s revenue and support from game publishers. For example:

• Riot Games shared $33 million with esports teams from a special bundle.

• In 2024, they plan to continue sharing revenue with teams in their international league.

5. Funding and Investments

Running an esports team is expensive. Teams spend a lot on player salaries, coaches, analysts, practice facilities, and travel costs. Because of these high expenses, many esports organizations rely on outside investments to stay afloat. For example:

• Fnatic has raised over $35 million from investors.

• Team Liquid has secured more than $80 million in funding.

However, due to recent financial challenges (called the “esports winter”), investments have slowed down.

6. Diversifying Income

To overcome profitability challenges, esports teams are exploring new ways to make money. Some examples include:

• Talent Management: Teams like Soul Esports’ 8Bit Creative manage esports talent.

• Rental Services: Teams like UK-based Team Endpoint rent out their facilities for media events or bootcamps.

• Selling Ventures: 100 Thieves sold its energy drink brand, Juvee, to Sprecher Brewing.

7. Player Transfers

Esports teams can also earn money through player transfers, similar to traditional sports. Teams sign players to long-term contracts with buyout clauses. If another team wants to acquire a player, they must pay a fee. For example:

• Dota 2 player Ame moved from LGD Gaming to Xtreme Gaming for around $500,000.

• In China’s Peacekeeper Elite League, player ChengC was acquired by All Gamers for $1.23 million.

Conclusion

Esports is a rapidly growing industry with huge potential. Investors and businesses are eager to get involved, while teams are expanding into new games, creating more teams, and hosting events to attract fans and increase revenue.

As esports continues to evolve, the business side of it will also change. One thing is clear: esports is an exciting field with plenty of opportunities for players, teams, investors, and fans alike.