Esports Revenue

The data is obtained from the esportsearnings.com and provided by the Ran.Kirsh in kaggle.

The original dataset title is “Esports Earnings:A monthly look at money distributed in various Esports tournaments”.

The dataset is divided by two parts: GeneralEsportData - general data on different games in EsportEarnings site; HistoricalEsportData - monthly data starting from 01/1998 to 10/2024 containing earnings for every game on the site.

Since the late 1990s, e-sports has evolved from niche tournaments to mainstream events, attracting millions of viewers and participants worldwide. At the 2023 Hangzhou Asian Games, e-sports was officially recognized as a competitive event. The rise of e-sports has transformed competitive gaming into a global phenomenon, with cash prizes reaching staggering amounts.

As e-sports solidifies its status as a significant industry, understanding its profit models is crucial not only for fans and players but also for potential investors, sponsors, and policymakers navigating the future of digital entertainment.

This data journalism piece aims to investigate the overall landscape of the e-sports industry, focusing on the ten most profitable e-sport games. By analyzing past trends and future possibilities, we seek to uncover viable development strategies that can shape the industry’s evolution.

Questions To Answer

  1. What is the earning per year?
  2. What is the average earning and tournaments per month?
  3. What is the ten most profitable e-sport games?
  4. How the revenue of the ten most profitable e-sport games changed over time?
  5. What is the average monthly revenue of the ten most profitable e-sport games?
  6. From 2017 to 2023, what is the earnings per tournament trend for the ten most profitable e-sport games through the year?

Esports: More than a game

In the heart of the venue stands a circular stage, adorned with just ten chairs and two long tables, each equipped with computers or smartphones. Above the stage, four large electronic screens encircle the space, while the venue’s lights shift in vibrant colors, casting a glow over the audience.

This setup, seemingly designed for a concert, is actually the esports arena for the Hangzhou Asian Games, where eight e-sports events crowned their champions in less than ten days. During this time, over 4,000 audiences filled the venue, cheering wildly at every shift in the games unfolding on the screens.

Though this venue was completed less than a year ago, it takes e-sports over 30 years from a form of entertainment to a recognized competitive sport, and finally gracing the prestigious stage of the Asian Games.

The term “e-sports” was first coined in the year 2000. Before 2010, most people had little understanding of what e-sports truly entailed, and prize pools for competitions were meager at best.

“It was all self-sufficient; that’s how everybody did stuff,” said Rod Breslau, a pioneering esports journalist and consultant.

According to Captainwords, the transformation of e-sports occurred in 2011 with the release of Twitch, a platform that enabled e-sports fans to interact with gamers in real time.

From 2010 to 2019, the profits from e-sports surged by more than 40 times.

According to BCG, this remarkable growth can be attributed primarily to the advancement of the internet and the ability for audiences to experience the same thrill from e-sports competitions as they do from traditional offline sporting events.

However, the pandemic dealt a significant blow to the e-sports industry. Following the outbreak in 2020, offline events were severely affected, leading to disruptions in live e-sports competitions.

While a rebound occurred in 2021, reaching historic highs, the subsequent global economic downturn resulted in a decline in e-sports profits. This situation underscores the industry’s vulnerability to external shocks, even as it continues to navigate the complexities of a rapidly changing world.

In March 2024, ESL Faceit, the world’s largest e-sports company, announced a 15% workforce reduction. In a memo to employees, company executives stated that the layoffs were intended to support “ambitions for sustainable growth and profitability.”

Despite the current challenges, Newzoo estimates that there are approximately 3 billion gamers worldwide, with around 500 million e-sports enthusiasts. This leaves a staggering 2.5 billion potential fans yet to be tapped.

BCG suggests that this demographic provides a solid foundation for the growth of the gaming community in the coming years. In this context, the question arises: how can the e-sports industry leverage past experiences to continue its advancement?

To address this issue, this news examines the historical state of the e-sports industry.

I. Esports Industry

E-sports earnings peaked in August, with July, October, and December also seeing relatively high prize pools. However, from January to June, the prize money appears to be notably lower.

In contrast to the fluctuations in earnings, the number of tournaments presents a different picture. May recorded the highest number of tournaments, while April, July, and November also saw a significant quantity. Interestingly, August had the fewest tournaments, indicating a complex relationship between tournament frequency and earnings within the e-sports industry.

When comparing the number of tournaments held each month, the differences are not as significant as they may seem. Instead, the scheduling of major events for a few select e-sport games heavily influences the monthly data.

This raises the question: Is it possible that certain esports games command a significant market share, thereby exerting a considerable influence?

Through data analysis, certain definitive conclusions can be partially drawn regarding the e-sports landscape.

The esports market exhibits a notable degree of monopoly, with prize money heavily concentrated among a select few games. The top ten titles account for over 60% of the total market share, with Dota 2 leading the pack, commanding an impressive 19.2% of the entire market and boasting a total earnings figure of $360 million.

The disparity in earnings is striking; even within the top ten, the difference between Dota 2 and the tenth-ranked game, Rocket League, exceeds eight times. BCG believes that the significant gap highlights how a game’s popularity and visibility heavily influence its financial success in the e-sports arena. But at the same time, the popularity of games is also intricately linked to the world of e-sports.

Thus, analyzing the operational models of the top ten revenue-generating esports games is essential for understanding the entire industry.

II. Top 10

The top ten e-sports games account for over 60% of the industry’s revenue, reflecting overall trends within the e-sports sector: a rise from inception until 2019, followed by a significant decline in 2020.

However, an intriguing phenomenon emerged: some games, such as Fortnite and Dota 2, experienced substantial drops in earnings in 2020 despite high revenues in 2019. In contrast, other titles were less affected and even continued to see growth.

According to Forbes, this disparity is closely linked to budget cuts within the industry. Companies that had invested heavily in offline events the previous year were often more susceptible to budget reductions, impacting their overall earnings in the following year.

Fortnite slashed its budget by 90%, significantly affecting its earnings due to various factors such as operational costs and the attractiveness of tournament prize pools.

In contrast, Rocket League, ranked tenth among e-sports games, maintained stability during the pandemic, partly due to its ongoing development phase. The game’s enhancements and the establishment of a strong community have significantly increased the visibility of Rocket League e-sports competitions.

Furthermore, the Hong Kong Game Industry Association note the dramatic changes of 2020 led many to realize that events could successfully transition online, enhancing the viability of digital e-sports. Some games have effectively capitalized on this shift, positioning themselves for continued growth in a rapidly evolving landscape.

Another notable distinction among different e-sport games is their investment in tournaments. Revenue models for e-sports can be broadly categorized into two types: one that experiences significant spikes during specific annual events, and another that generates a more consistent income throughout the year.

Games like Dota 2 exhibit substantial spikes in earnings during key events, particularly in August, compared to other months. In contrast, titles such as Counter-Strike maintain a more balanced earning pattern throughout the year. The trend in earnings per tournament further illustrates this divergence, highlighting the varying strategies adopted by different games in the esports landscape.

For Dota 2, organizing the International Invitational is a crucial component of its competitive landscape. The game aims to cultivate an “Olympic-like” atmosphere, emphasizing the significance of the competition. According to AHQ, this approach enhances the tournament’s prestige and allows audiences to build anticipation, facilitating a smoother event experience.

In contrast, year-round events may be more beneficial for emerging games. During this phase, it is essential to foster community recognition and establish e-sports teams. More tournaments mean more participants, which can significantly contribute to the future growth and development of the game.

III. Last but Not Least

Video games are inherently more complex than traditional sports, with only a few genres, such as sports simulators or racing games, requiring less specialized knowledge.

Titles like League of Legends and Dota 2, both MOBA games, feature over 140 and 120 playable characters respectively, each with unique abilities, stats, and upgrades. This complexity means that e-sports events for these games primarily attract active players, as real gaming experience is essential to fully understand the dynamics of competitive play.

However, e-sports is not simply about “playing games” and “earnings”, It carries significant meaning related to the Olympic spirit.

“These days, the responsibility that you have as a top player to know more is substantially higher, and the amount of tech skill you need is substantially higher,” said Daniel Lee, a former League of Legends general manager at Counter Logic Gaming and a former top-100-ranked Super Smash Bros player. “The amount of time it takes, the amount of effort to keep up with everybody — substantially higher. Competition is a relative skill, right?”

Esports Revenue Key Findings

  1. Esports earnings began to grow rapidly from 2010 and started to decline in 2020.

  2. The prize money for esports tournaments peaked in August, with relatively high amounts also observed in July, October, and December.

  3. The esports market has a degree of monopoly. The prize money was extremely concentrated among a few games.

  4. The trends of the top ten games align with the overall e-sports landscape. However, the response to the 2020 pandemic led to varying outcomes: some games experienced significant revenue declines due to budget cuts, while others benefited from ongoing development or the potential for online engagement, resulting in increased earnings.

  5. Revenue models for esports games can be broadly categorized into two types: one sees significant spikes during specific annual events, while the other generates a more consistent income spread evenly across the years.