Size of Industry
$495,000,000
What is it?
Esports (or electronic sports) is a term used to describe competitive video gaming.
It’s different from standard video gaming in that esports is competitive (human-vs-human) and usually has an engaging spectator element to it, like traditional sports.
Esports tournaments usually consist of amateur or professional gamers competing against one another for a cash prize.
For example, League of Legends pits five players against another five in a virtual battle arena to destroy each other’s base. Whereas in shooters, like Call of Duty, Overwatch and Counter-Strike, players are pit against each other in various modes to complete an objective.
Think of esports as competitive video gaming where skill and professionalism is celebrated. The pro gamers who play at this level know the games inside out, much like a professional footballer or athlete would in their respective fields.
Players can either play one-on-one against one another (in games like FIFA and Street Fighter), or in teams. For example, in Halo, two teams of four play off against each other, while in Overwatch, two teams of six compete. Rules and strategies can differ greatly depending on the game in question.
Unlike football, where men’s and women’s football are split, esports is technically mixed, with male, female and gender non-conforming players taking part. In recent years, the rise of women players has risen and continues to rise alongside initiatives such as ‘Women in Esports’.
According to data from Women in Games, it is estimated that 1 in 20 women are involved in the esports industry- and even though this number is still quite low, it is gradually on the rise. And there are many women holding various non-player positions in esports, such as casting, coaching, production and so on.
As well as this, esports is also open to all, regardless of physical ability.
Some of the most popular esports games include League of Legends, Counter-Strike: Global Offensive, Overwatch, Dota 2 and Call of Duty, but there are many others.
Professional teams usually have coaches, analysts and managers who help to get the most out of the players and organise strategies.
Some games are played on consoles like Xbox One or PS4, while others are played using PCs. Matches can be online over the internet, or at a physical event (usually grand finals) if safe to do so, over a LAN connection.
Matches can be viewed by spectators at a live physical event or over the internet via streaming platforms such as Twitch, which broadcast the games in real time online.
To give you an example of the scale of esports, some of the biggest tournaments offer millions of pounds in prizes. The tournaments with the biggest prize pools are the Dota 2 International with $34m and the Fortnite World Cup with $30m, as of 2019. These events are watched by millions of fans, and bring in a lot of interest into the esports scene.
Professional players, too, can expect to make a decent salary. While this can vary greatly depending on the team, the game and the player, the top pros can expect to make hundreds of thousands of dollars per year. This can come from a standard salary, as well as sponsorship deals and streaming donations.
It can be a very different case for amateur players, however, who may not even have a contract. Instead they will usually aim to make money from winning low-level tournaments and taking a split of the winnings, or to play for fun.
Player representation has been an ongoing topic within esports in recent years, as has regulation. Currently, the publishers and developers of each game set the rules themselves, and are responsible for ensuring integrity and handing out punishments where necessary.
Overall, esports has progressed greatly in recent years, with bookmakers, TV broadcasters and big non-endemic brands like Coca Cola getting involved in the space.
HOW does it work?
Unlike the majority of traditional sports leagues, esports companies wear multiple hats within the industry – simultaneously working as competition organisers, rights holders and content creators. A single organisation can be responsible for financing a tournament through brand partnerships, creating broadcasts around it, and distributing that content (sometimes exclusively) to streaming platforms.
This introduction to the esports ecosystem is no where near exhaustive, but should provide those totally unfamiliar with the industry an insight into its current framework and relationships between the different entities.
The Publishers
The “esports” themselves wouldn’t exist without developers/publishers, but those same companies also host and produce coverage for some of the scene’s largest competitions, such as Riot Game’s LCS or Valve’s Dota 2 International.
The publishers can also license their games out to external league organisers and streaming platforms. There is now an increasing incentive for any video game publisher to turn their new competitive title into an esport, with the benefits including extraordinary exposure both online and off, and cascading revenue that can be generated from competition-themed in-game content (the so-called “free-to-play” model).
Players and Teams
Since broadcasting game sessions is a natural part of their career, players often provide advertising space on their streams for teams and brands (in fact, teams recruit “influencers” alongside players to exclusively fulfil this role). Players can later evolve their content creation skills to become commentators, analysts or even community developers for both the publishers and third-party tournament organisers.
A typical esports club runs multiple squads – mostly in different games, but some support “academy” tier or all-female teams. While there are team brands that have been around since competitive gaming’s beginning, many have formed with investments from entrepreneurs, entertainment companies and traditional sports team owners. Some brands even sponsor their own teams within the scene, including the Red Bulls, Roccat and Team Kinguin.
Teams must remain financially separate from tournament organisers, for obvious reasons. However the prize money offered by events (whether they be premier offline competitions like the Intel Extreme Masters, ELEAGUE, or smaller online tournaments) are a benchmark of personal accomplishment for individual teams and players and, in some cases, are a form of financial stability. Right now, sponsors overwhelmingly make up the bulk of esport team revenues, with brand activations on jerseys, in-stream promotional content and hardware exclusivity deals, comparable to a soccer team only using Nike or Adidas shoes.
Tournament and League Organisers
Like the game developers, various third party companies run their own competitions, whilst also planning and producing coverage around them. The rights to these broadcasts are then sold to streaming platforms. Exclusivity is the growing beast in these deals: for example, weekly viewership numbers on Twitch for Counter-Strike: Global Offensive were cut down dramatically after streaming rights to the ESL Pro League were purchased by YouTube. Facebook and Twitter have also begun to legitimize themselves as sources for esports content through streaming deals with teams and league organisers.
Currently, esports events are not locked behind a subscription fee, and can be watched both live and on-demand. League organisers can still monetize individual esports fans through actual ticket sales (though prices as a whole are still on the lower end), and there is also a rising number of TV deals, and partnerships with smaller tournament organisers in growing regional markets.
Brands and Advertisers
Brands are by far the biggest source of revenue for every sector in esports, but the nature of a sponsorship/partnership depends very much on the entities in question.
Teams wear brand logos on their jersey, use products/equipment where applicable and produce social media content around their sponsors. The streaming platforms can allocate screen space, influencers or even entire channels to a single brand. Event organisers can provide name placement, showcase them in highlight reels or, for hardware companies, literally build the events on the back of their latest product lines. In fact, market research has demonstrated that the sales for gaming hardware and peripherals increases significantly with esports viewers, who want to buy better gear to maximize their own competitive performance. This has resulted in an entirely unique consumer group within the gaming industry.
Use Case
There are numerous games on the market. But only a few games are suitable for the tournament format. We'll give you a short overview of the three most popular competitive games:
CS:GO
CS:GO stands for the computer game Counter Strike: Global Offensive, which belongs to the genre of the online tactical shooters. Two teams with five players each compete against each other for map dominance.
The most played scenario is bomb defusion: the "terrorists" are tasked with planting and defending a bomb site. The "counter terrorists" must then stop the terrorists by defusing the bomb. If the bomb is planted and detonated, the terrorists get the point. After a certain number of rounds the teams change their roles.
The two teams play a total of 30 rounds, first team to 16 wins the set. In a best of 3 scenario, first team with 2 sets wins the match. In a best of 5 scenario, first team with 3 sets wins the match and moves to the next round.
League of Legends
League of Legends, also called LoL, belongs to the free playable genre of Multiplayer Online Battle Arena (MOBA). League of Legends is a real-time strategy game, in which two teams compete against each other on a map designed like an arena and try to take each other's base.
Tournaments are usually played on 5v5 maps. The map is divided into two halves so that each team has a territory with a main structure. The object of the game is to conquer the opponent's main structure.
A game usually lasts 15 to 60 minutes. As in CS:GO, there are best of 1, best of 3 and best of 5 scenarios. Esports tournaments for LoL are usually organised by the game developer Riot Games.
Dota 2
Dota 2 is a MOBA, real-time strategy game developed by Valve. Dota 2 and League of Legends are very similar in their game mechanics. In Dota 2, too, the objective is to capture the opponent's base. However, due to the abilities of the numerous playable characters, Dota 2 is much more tactical and less centered on the one game character. With over a hundred heroes to choose from, DOTA is a very diverse game.
The game is played in teams of five. A round takes about 15 to 60 minutes. The tournament scenario differs depending on the event. In a double knockout system, a team must lose twice to be eliminated.
1. ESL ONE
The ESL, the Electronic Sports League, is one of the best known tournament providers in Germany. The Cologne-based eSports company now offers tournaments and leagues in over 50 different disciplines. One of its tournament formats is the ESL ONE, which takes place in Germany.
ESL ONE CS:GO
The summer in Cologne is all about esports. In addition to the annual gamescom, the world's largest event for computer and video games, CS:GO teams will compete there at the esports event ESL ONE Cologne. 15,000 esports enthusiasts make the pilgrimage to the esports tournament in the LANXESS Arena in Cologne to cheer on their favorite teams - an atmosphere similar to that of the World Cup:
Cologne is not the only venue for the ESL. The ESL ONE holds tournaments worldwide for CS:GO in other metropolises:
ESL ONE Cologne, Germany (2014, 2015, 2016, 2017, 2018)
ESL ONE Katowice, Poland (2015)
ESL ONE Belo Horizonte, Brazil (2018)
ESL ONE DOTA 2
Just like the first person shooter Counterstrike, DOTA 2 has garnered a large fanbase in the eSports scene. In 2017, the tournament took place in Hamburg for the first time, but thousands of eSports fans have already gathered in Frankfurt in previous years to cheer on DOTA teams. The esports event, endowed with one million dollars, attracted 10,000 people to the Barclaycard Arena in Hamburg in 2017:
The previous venues also attract numerous visitors:
ESL ONE Frankfurt, Germany (2014, 2015, 2016)
ESL ONE Birmingham, UK (2018)
ESL ONE Katowice, Poland (2018)
ESL ONE Genting, Malaysia (2017, 2018)
2. ESL Intel Extrem Masters (IEM)
First held in 2007, the Intel Extrem Masters (IEM) is a league in which the world's best players compete. The highlight of a season is the World Championship, which is held at the end of the tournament. Since 2014, the Polish city of Katowice has been the venue of choice for the pompous final:
While the total prize money in Season 1 (2007) was a mere $160,000, with the only two games being Counterstrike and WarCraft, esports fans in Season 11 (2018) can look forward to a total prize pool of $1,373,750 for Counterstrike, StarCraft and League of Legends. It remains to be seen whether the eSports industry will continue to grow as strong in the coming years.
But one thing is certain: the enthusiasm for esports is a worldwide phenomenon. Season 11 takes place on three continents:
Shanghai, China
Oakland, USA
Gyeonggi, South Korea
Katowice, Poland
3. League of Legends Championship Series (LCS)
While a variety of games are played in the ESL One and ESL Intel Extreme Masters Tournaments, the LCS only focuses on one game: League of Legends. The tournament is run by the game's own creator: Riot Games. The tournament is divided into Spring and Summer, meaning grand finals are held twice a year.
EU League of Legends Championship Series (EU LCS)
10 teams, one goal: to win the League of Legends Championship Series in Europe. The undisputed record holder is the team fnatic. The team is not only one of the oldest in the professional field of LoL (League of Legends), but has already won the grand finals seven times (as of 2018). Most recently, they were able to win over the esports team of FC Schalke 04:
Did you know?
Each participant in the LCS receives a salary of $12,500. In addition to the base pay, prize money can easily reach into the six-figure range.
Throughout the previous years, a trend has become clear. Podium finishers are always from teams fnatic and G2 Esports. Only in the summer of 2014 could a member from another team, Alliance, win a tournament.
NA League of Legends Championship Series (NA LCS)
The counterpart to the European LoL League is the NA LCS, the North American League of Legends Championship Series. Here the esports greats Cloud 9 and Team Liquid dominate the finals:
Did you know?
In contrast to the EU LCS, the American eSport athletes do not play a best-of-2 but a best-of-3. So in Europe it is possible that after two rounds there is no clear winner. As in football, the European teams receive three points for a win, and one point for a draw.
In 2014, the North American team "LMQ/i" consisted of five Chinese players. After that, Riot Games introduced the rule that at least three of the five players must be native. So in North American teams, at least three players should be American or Canadian.
The NA LCS centre is located in Los Angeles, while the EU LCS has set up its headquarters in Berlin, having previously been based in the esports capital Cologne for many years.
The team Team SoloMid has achieved the most victories. All in all they've won the finals six times and four times they came in second. 2018 was the first time they did not make the finals.
4. League of Legends World Championship
Game developer Riot Games does not only organise a league for its MOBA Game League of Legends, but also a world championship. In total, 24 teams from around the world took part in the League of Legends World Championship in 2018:
The World Cup casts a spell over players and spectators around the world. So far the event has been held on three continents. A single World Cup often takes place in different countries and cities:
Jönköping, Sweden (DreamHack 2011)
Taipei, Taiwan / Singapore, Republic of Singapore/ Busan, South Korea / Seoul, South Korea (2014)
Paris, France / London, Great Britain / Brussels, Belgium / Berlin, Germany (2015)
USA: San Francisco / Chicago / New York / Los Angeles (2016)
China: Wuhan / Guangzhou / Shanghei / Beijing (2017)
South Korea: Seoul / Busan / Gwangju / Incheon (2018)
While there was originally a prize pool of $100,000 for players in Sweden in 2011, the prize pool grew to $4.5 million in China in 2017.
But it's not just the prize pool that's increasing. The number of spectators also continues to grow. Over 80,000 spectators filled an entire football stadium in China where SK Telecom T1 and Samsung Galaxy fought for the title in the final. 40 million viewers also followed the event via live stream.
5. The International
The International is the world's largest endowed eSports event, with 25.5 million dollars in prize money at stake in the Dota2 tournament. The 1st place finishers Team OG received 11.2 million dollars and the two last place finishers received $63,580 dollars. Although the tournament was organised by the game's developer Valve itself, most of the prize money came from the fans. Their combined in-game purchases made up the majority of the prize money. In 2018, the promoters paid only 1.6 million by themselves.
Because of the enormous prize pool, esports both men and woman are expected to compete in the high-stakes tournament. You can also see this in the short report on the final teams Team Liquid and Newbee at The International 2017:
The Esports event is now held mainly in North America, although the foundation was laid in the eSports metropolis of Cologne. The venues so far have been:
Cologne, Germany (2011)
Seattle, USA (2012, 2013, 2014, 2015, 2016, 2017)
Vancouver, Canada (2018)
Did you know?
The make-up of teams in the grand finals is predominantly Asian, for example the Chinese teams PSG.LGD (2018), Newbee (2017, 2014) or Wings Gaming (2016). However, esports tournament winners come from all corners of the globe, for example the American team Evil Geniuses (2015), from international teams Team Liquid (2017) or from European team OG (2018).
Esports tournaments - the enthusiasm remains
So do esports events really fill stadiums? Yes, they do. The ESL ONE Cologne 2017 even broke all spectator records according to information from ESL Gaming. In addition to the 15,000 daily spectators in the LANXESS Arena, more than 180,000 viewers watched the stream on Sliver TV. And the following on social networks was also huge, with 30 million unique users.
Earning money by gaming becomes more and more attainable as esports tournaments fill whole arenas. Do you want to become a professional esports athlete yourself? Then we have some tips for you on Fitness and nutrition in esports. Or do you have a team yourself or are you involved in an esports club? Then take a look at our Esports Jerseys. With these you will make an instant impression at your next tournament - no matter if you are a player, a coach or fan.
Market
Globally, the total esports audience will grow to 495.0 million people in 2020, a year- on-year growth of +11.7%. Esports Enthusiasts will make up 222.9 million of this number, growing +10.8% year on year. China is the largest market by revenues, with total revenues of $385.1 million in 2020.