One might wonder while watching a stream of a major League of Legends tournament with thousands of viewers, professional casters, and ESPN level production quality: how did they pay for this? Surely there must be money in this venture somewhere to get this kind of production, and you would probably be saying this to yourself while watching a stream you didn’t even pay to watch! The answer is a little more complicated than most businesses, so we’ll firstly go into the ultra basics before covering the more nuanced aspects in later articles.
Let’s start with the ultra basics. Businesses make money by being paid for goods and services. Pretty basic right? Esports is an industry where there are multiple avenues for reaching your customers, and lots of ways of things to sell. You can sell a good such as gaming peripherals: controllers, monitors, mouse pads, headphones, or something new like gamer glasses (remember those?). Or you could sell a service: stream production, writing the news, coaching, or playing the game as a pro or as entertainment. Basically if the thing you sell can be handed to the person it’s a good, if what you are selling is something you DO it’s a service.
Esports is a new industry, so the customer base isn’t quite as profitable as other more established industries. A lot of the growth that has been seen in the last few years is from rich investors moving in to hopefully turn a profit down the line as things get settled. So while it is growing, it’s not the kind of growth that is profitable yet and this means that while some are jumping in head first, others are skeptical that a profit is there for the making.
So can a guy and his friends become a pro CS:GO team? Could you take a few thousand dollars and create a gaming organization with sponsors and pros? Could a new content creator start making YouTube videos and become a millionaire overnight? I’ll be going into all the ways that someone could get started in the esports industry, what the profit margins are, and how to get started.
(Spoiler: The best way to get started it to just start right now!)