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How do esport tournaments make money?

Esport is short for electronic sports. As its name suggests, esports involve playing video games in competitive environments. นักกีฬาอีสปอร์ต is a legitimate career now. There are organized tournaments held with players on a multiplayer server.

Professional tournaments have varying amounts of prize money depending on the reach of the event. Hundreds of different games are played in such circumstances, particularly ones with customizable multiplayer servers. The revenues of such events exceed over a billion dollars. SO, where do tournament organizers get such money to invest? There are various sources of investment in these games.

Sources of investment

E-sport tournaments are funded mainly by sponsorships. People sponsor such events, and the larger the scale of the events, the more media coverage is required. Hence, media rights also become a source of investment. Partnerships and advertisements also bring in a lot of money. Tickets are also held at a fixed price.

The events are often organized to include food and other forms of entertainment during breaks. The revenue is collected through vendor sales.

The nature of finances in esports

There’s a misconception that esports events are carried out solely for profit. Most events are cash-flow adverse which means they invest more than the revenue they generate. Profits are absolutely zero. This is why there is a need for investors to sponsor them.

Most of the aim behind holding such tournaments is to promote specific businesses. Video game developers themselves hold most events as a part of a marketing scheme. This events also encourage the video game community to interact and socialize.

Source of revenue

Of course, holding such events despite them being an overall financial loss is not the best business scheme. Tournaments do generate revenue, but the sources are a bit different from traditional businesses.

Statistically, most of the revenue is generated it by sponsorships. Sponsorships are highly debated to be the backbone of funding for the industry. These sponsors have their motives for funding such events. Most of it is to market their own business.

Costs of hosting an event

Esports tournaments are very flexible, and they can be held online or live under any circumstances. The expenditure highly depends on the nature of the event. A live event would prove to be much costlier with food, gaming equipment, high-speed internet, etc.

An online event would also pose costs as the prize money or the graphics for the promotion of the event, etc.

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