In 2019, eSports recorded profits which outstripped the music industry and crept up to the movie sector’s earnings. That means video games are no longer a pastime for basement-dwellers and arcade-loitering youths. It is a tenable career choice. Of course, there have been a couple of false starts and detours along the way. Still, competitive video gaming is about to go mainstream. Here is how the eSports ecosystem works.
eSports depend on software, as much as rally drivers depend on cars. Developers are tasked with shaping a game to be entertaining but challenging, and they are doing quite well. Now, there is a tribe of dedicated developers working for gaming companies trying to come up with the next big thing, while others prefer to work independently. Either way, these people are the life force behind the eSports industry.
Players and Teams
Once the software is up running, many gaming companies assemble teams to represent them in big tournaments around the world. That generates revenue for the organisers, and the game owners get more publicity. A typical eSports team has multiple squads, each specialising in a particular game with funding coming from entrepreneurs, entertainment companies, and sports team owners. Even so, most crews depend on sponsors who do brand activations on jerseys, in-stream promotions, and hardware exclusivity deals.
Tournaments and League Organisers
Some third-party companies organise and promote eSports events. They sell broadcast rights to streaming services which charge a subscription fee. However, teams must remain financially separate from tournament organisers. Most of them have only one annual event, which explains why they don’t want to fund any squads. However, they usually have big prize pools to attract the top tier eSport teams to their events and keep them coming back. That also means advertisers and sponsors are the engines behind the eSports industry.