The video-game industry, often thought of as the domain of teenagers in basements living off cold pizza, is slated to become the primary source of entertainment in the U.S.
For skilled players, there’s a lot of money up for grabs.
The real payoff is in the big esports events from companies like Blizzard Entertainment, Epic Games and Riot Games, which host multi-round, international tournaments that dole out winnings of up to $100 million.
According to a World Economic Forum estimate, the esports industry will soon exceed $1 billion in revenue. Esports events already attract hundreds of millions of viewers annually. And all those eyes are on the gamers competing in high-stakes matches.
Their earnings translate into comfortable six-figure salaries for many of the top-tier players, and those numbers will continue to grow as the industry expands.
But First, What Are Esports?
Simply put, esports are video game competitions with highly skilled players, aka athletes. The industry works similarly to the regular sports industry: giant events, big marketing promotions, advertisers and broadcasters. But the video games themselves don’t necessarily have anything to do with traditional sports.
Some of the most popular games are called Massive Online Battle Arenas (MOBAs), which are usually fantasy or sci-fi in nature, or realistic, wartime games called First Person Shooters (FPS) — or a mixture of both. See: Apex Legends and Overwatch.
These games are typically played on the PC and are team-based. They have objectives as simple as eliminating the other team or as complex as plotting hours-long strategies to capture an opponent’s base.
They’re approachable enough for everyday gamers to play, but esports pros spend thousands of hours learning the intricacies of a game’s design to develop heightened reflexes and sophisticated strategies.
Of course, there are plenty of video games about actual sports too, like FIFA, Madden NFL, NBA 2K and UFC. Just like real sports, there are millions of fans who to tune in online or in-person to watch these virtual athletes running, kicking and wrestling.
The 2018 League of Legends World Championship was held in South Korea, and at its peak reached 200 million viewers. The 2018 Super Bowl, by contrast, drew a little more than 103 million.
But MOBA tournaments are more popular. A lot more. Hundreds of millions of worldwide fans watch them, rivaling the viewership of real-life sporting events.
Event viewership isn’t the only thing rivaling the traditional sports industry. Esports earnings for top gamers are also skyrocketing.
The nature of the game — whether it’s solo or team-based — affects earnings. Plus, many esports teams include managers and coaches who take a cut of the prize money.
This list includes a snapshot of the biggest video-game companies in the esports industry and the cash prizes from their biggest tournaments.
With the release of several successful series such as StarCraft, Warcraft and Diablo, Blizzard has been a mainstay in the video-gaming industry since the early 2000s. But the company’s profile in esports ballooned after the release of Overwatch, a six-on-six objective-based game where gorillas, K-Pop stars in mech suits and other characters with special powers battle it out in an arena.
Since 2016, Blizzard hosts an annual Overwatch World Cup, where several countries send in teams of their top six players to compete in an ultimate showdown at BlizzCon.
South Korea has won all three championships so far, and the latest competition in 2018 had a prize pool of $480,000. The upcoming 2019 World Cup is expected to have a larger prize pool.
Electronic Arts (EA) specializes in video games based on real sports. They develop and publish FIFA, Madden NFL, UFC and several others. Their portfolio also includes other non-sports games such as the Battlefield series.
Though EA is a little late to the esports-events party, the company holds several successful competitions for its most popular games. Christian Lomenzo, a recent winner of Madden NFL’s Challenge Championship, raked in $35,000 and qualified for the Madden Bowl, where he won an additional $10,000. Sports games typically are played one-on-one, so he pocketed those earnings entirely. (He also talked to The Penny Hoarder about his big win and video game tournaments in general.)
While Madden is indeed popular in the U.S., the big bucks are in FIFA tournaments due to soccer’s broader, international appeal. Mosaad “Msdossary” Aldossary took home the 2018 FIFA eWorld Cup — and $250,000.
Later this summer, Epic Games is holding the first-ever Fortnite World Cup in New York City, and it’s offering a total prize pool of $100 million over the course of all qualifying rounds, finals and the main event. Yep, you read that figure right. In 2018 alone, Epic Games banked $3 billion in revenue for a game that is completely free to download and play.
Fortnite is a cartoonish battle-royale game with a king-of-the-hill-esque objective: 100 players airdrop into a giant map with nothing. They must scavenge equipment to eliminate the other 99 players. The last one standing wins. Fortnite boasts more than 250 million players, and it’s rewriting the rules of esports and the video-game industry as a whole.
The Fortnite World Cup is a 10-week-long competition that guarantees a minimum of $50,000 to each contestant. The ultimate event is scheduled in July, and the winner will take home $3 million, the largest winning of any single tournament.
Riot Games hosts some of the most widely watched esports events in the world. The ultimate event, the League of Legends World Championship, is hosted in a different city each year. (It sold out China’s Olympic stadium for the League of Legends championships in 2017.)
League of Legends is a five-on-five computer MOBA game, where two teams plot to destroy their opponent’s base.
In 2018, the World Championship was held in South Korea and brought in roughly 200 million viewers at its peak. The prize pool of $6.45 million was spread among 24 teams. The winning team, Invictus Gaming, earned a $2.4-million piece of the pie.
Want to go pro? It’ll take some practice. To hone your video-game skills and earn money, start with these smaller video game tournaments to work your way up to the big leagues.
The International is Valve’s biggest event and the championship for the crowned jewel in Valve’s collection: DOTA 2.
DOTA 2 and League of Legends are almost identical ― both games are based off of a user-generated mini-game in Warcraft from decades past. The mini-game was called Defense of the Ancients (DOTA). Since the original game was user-generated, no one could lay legal claim to the concept. Many spin offs ensued.
In 2018, the DOTA 2 Internationals had a $25 million prize pool. The winning team, Team OG, brought home more than $11 million.
One of Team OG’s players, Johan Sundstein aka N0Tail, is touted as the most successful esports athlete with earnings topping $3.5 million — not including sponsorships or partnerships.
Other Ways Esports Athletes Earn Money
Almost every big name in esports streams on Twitch, a free video-streaming service. Millions of esports fans tune in to watch their favorite gamers play in real time through screen-sharing software. They can even message the streamers as they’re playing, often sending jokes or kudos.
Cory Michael, aka King Gothalion, is a professional gamer who makes six-figures solely off of Twitch streaming, and he admits: He’s not even that good at games.
Streamers monetize all the views through partnership deals with video-game related products. Twitch also allows viewers to donate directly to the streamer. Together, the platform brings a steadier source of income for esports athletes — outside the sporadic payouts of tournaments.
Some esports pros are employed by the video-game publishers directly.
Riot Games’s esports commissioner Chris Greeley said Riot employs their own professional gamers, about 50 in total.
Their average salary: $300,000, not including partnerships or revenue from Twitch streaming. Even the lowest-paid pros on Riot’s team make a comfortable amount.
“Minimum for our pro level is 75 grand,” he says. “That’s not a bad salary at 18.”
Adam Hardy is a staff writer at The Penny Hoarder. He specializes in ways to make money that don’t involve stuffy corporate offices. Read his latest articles here, or say hi on Twitter @hardyjournalism.