8 ms·

As far as I can tell, two groups are making plenty of money off of esports: 1 - The companies that make the game. Whether it's Riot and Blizzard selling slots

As far as I can tell, two groups are making plenty of money off of esports: 1 - The companies that make the game. Whether it's Riot and Blizzard selling slots in their leagues for eight figures, Valve using their annual tournament to sell in-game cosmetics, or all the companies ultimately owning broadcast rights to their game, this is the biggest difference between esports and traditional sports. The New York Yankees and Los Angeles Dodgers make money because they sell their own tickets and broadcast rights to their games; even though MLB does control the streaming revenue, they share it out to teams and ultimately have to bow to the wishes of a majority of team owners. What you don't see is a single company MLB inc that owns the copyright to the game of baseball, sells broadcast rights to all teams themselves, charges teams to play in the league, and can kick teams out of the league at a whim. That's the situation in esports. 2 - Individual players, with streaming. Players can first make a name for themselves in competitions, then stream on their own Twitch channel for revenue. This is not that different from athletes acting as social media influencers and signing endorsement deals, but the biggest difference is that by streaming on Twitch, they appear side-by-side with tournament broadcasts. It's as if LeBron's instagram account where he streamed his workouts and pickup games were just one change-of-the-channel away from ESPN, and people would consider it normal to flip between the game and individual player streams. Lots of esports orgs, as part of signing players, get a big cut of the player's streaming revenue. But the revenue for an individual player's twitch stream, while great for an individual, usually isn't going to be significant enough to maintain a whole organization, and when a player brand does get big enough that their stream could sustain an org - that's when the player will be heavily incentivized to go independent, and make more money from streams than they do from competing. Ultimately, I think esports has a bright future - overall total viewership continues to rise, even though some games like League of Legends - which is more than a decade old now - are starting to fade. It's just the business models of the offline sports world don't carry over, and that's especially apparent with these organized teams.

TheAceOfHearts 4y ago
The latest League Worlds was gigantic and viewership peaked at 5.1 million. These big finals are the eSports equivalent to the Super Bowl, and a lot of people tune in even if they're not active players. My favorite moba is Heroes of the Storm but I still check out League Worlds and DotA2's The International, despite not playing either game. StarCraft 2 is a decade old and viewership is still pretty solid for big events. Brood Wars is two decades old and they still get thousands of viewers!
- somehnacct3757 4y ago
  eSport viewership numbers are untrustworthy because the games incentivize players to tune in with special in game rewards. Also for reference the last Superbowl was watched by 100M viewers.
  - axus 4y ago
    Aren't the rewards cheap for the company? Advertising costs plus the artists salary?
  - stryan 4y ago
    How much sports game viewership is just TV's with the game on for background chatter, or people watching the Superbowl for the half-time show? I think viewer rewards is something to take into consideration (I certainly used to idle in OWL twitch streams for free skins) but I think it's a bit disingenuous to claim all of them are untrustworthy.
    - rchaud 4y ago
      The difference is that people will be talking about football well after the game is over. There is SportsCenter, there are the blogs, the social media....all of these things matter to advertisers, perhaps even more than the base metric of how many were watching the live broadcast.
      - ptudan 4y ago
        There's definitely derivative media in eSports too. Replace SportsCenter with youtube and twitch channels, and the rest is the same
  - jcranmer 4y ago
    > Also for reference the last Superbowl was watched by 100M viewers. Getting precise numbers for marquee sporting events is difficult, especially outside of the major US sports leagues, but the Super Bowl is on the shortlist for most-viewed single sporting event. Comparing only among US sports leagues, the Super Bowl has more viewers than the final game of the next several leagues combined--the next largest finals seems to have somewhere around 20M viewers. By contrast, the smallest of the "big" US sports leagues can only manage around 5 million viewers for its final games.
mocha_nate 4y ago
100% agree. I started getting into Twitch during the beginning of the pandemic and got to know a lot of people who make money via online tournaments. The main channels I watch are Call of Duty and Super People. It's fascinating watching these streamers compete. If I could invest as an average joe, I would.
yamtaddle 4y ago
3) Esports gambling companies
Mountain_Skies 4y ago
Point two reminds me of how some university professors make most of their money doing consulting and serving as expert witnesses. While their university salary pales in comparison to what they get from their other activities, it is their status as professors at reputable universities that makes the other income possible.
colordrops 4y ago
Based on your explanation it sounds like a good thing that investors and sponsors are pushed out as they are middle men and rent seekers. Allow those with skin in the game (womp womp) to profit.
echelon 4y ago
Twitch isn't doing so hot. Twitch recently lowered their payouts (again) [1], making streamers and creators furious. More blood from the stone. Twitch is bad for discovery, and they're continually losing creators to YouTube(Gaming). Amazon doesn't report all of the key financials from Twitch, but it's expensive to support infra for everybody who wants to be a streamer. Only the top 1% draw an appreciable audience, and the ads cater to a demographic that doesn't have substantial disposable income. If Amazon didn't have other interests in gaming (Luna, their own MMOs and game studios, etc.) that synergize well with Twitch, they would probably cut the losses. As a comparison, Reddit recently cut their own streaming product [2]. [1] https://techcrunch.com/2022/09/21/twitch-subcription-revenue-share-changes/ https://techcrunch.com/2022/09/21/twitch-subcription-revenue... [2] https://www.reddit.com/r/pan/comments/yl5zzd/update_on_the_future_of_live_video_broadcasting/ https://www.reddit.com/r/pan/comments/yl5zzd/update_on_the_f...
- cutenewt 4y ago
  This is a good reminder of Google's advertising economies of scale. It doesn't surprise me that Twitch is struggling. TikTok could suffer the same fate as Twitch: their payouts aren't as good as YouTube (Shorts) on a per view basis. The only thing that's keeping TikTok in the game is their reach. Once reach hits parity, I wouldn't be surprised if TikTok succumbs to YouTube.
- Kathula 4y ago
  By "continually losing creators to YouTube" you mean YouTube paid a few top streamers million dollar contracts? I don't see anyone prefer streaming on YouTube over Twitch unless you already have a big channel on yt. Discovery is still better on Twitch. There's raids and hosts, and simply picking a catogery/game you like and see everyone who streams it. How do I find a Dota livestreamer on Youtube? There's not any intuitive way, if I search it I just get videos. And then there's twitch prime, the supreme chatting experience of twitch etc.
  - ilyt 4y ago
    > the supreme chatting experience of twitch etc. You mean the stream of high-pressure shit is ejected at higher rate ? That's pretty much "chatting experience" on any big channel regardless of platform...

TheAceOfHearts 4y ago

The latest League Worlds was gigantic and viewership peaked at 5.1 million. These big finals are the eSports equivalent to the Super Bowl, and a lot of people tune in even if they're not active players. My favorite moba is Heroes of the Storm but I still check out League Worlds and DotA2's The International, despite not playing either game. StarCraft 2 is a decade old and viewership is still pretty solid for big events. Brood Wars is two decades old and they still get thousands of viewers!

somehnacct3757 4y ago
eSport viewership numbers are untrustworthy because the games incentivize players to tune in with special in game rewards. Also for reference the last Superbowl was watched by 100M viewers.
- axus 4y ago
  Aren't the rewards cheap for the company? Advertising costs plus the artists salary?
- stryan 4y ago
  How much sports game viewership is just TV's with the game on for background chatter, or people watching the Superbowl for the half-time show? I think viewer rewards is something to take into consideration (I certainly used to idle in OWL twitch streams for free skins) but I think it's a bit disingenuous to claim all of them are untrustworthy.
  - rchaud 4y ago
    The difference is that people will be talking about football well after the game is over. There is SportsCenter, there are the blogs, the social media....all of these things matter to advertisers, perhaps even more than the base metric of how many were watching the live broadcast.
    - ptudan 4y ago
      There's definitely derivative media in eSports too. Replace SportsCenter with youtube and twitch channels, and the rest is the same
- jcranmer 4y ago
  > Also for reference the last Superbowl was watched by 100M viewers. Getting precise numbers for marquee sporting events is difficult, especially outside of the major US sports leagues, but the Super Bowl is on the shortlist for most-viewed single sporting event. Comparing only among US sports leagues, the Super Bowl has more viewers than the final game of the next several leagues combined--the next largest finals seems to have somewhere around 20M viewers. By contrast, the smallest of the "big" US sports leagues can only manage around 5 million viewers for its final games.

mocha_nate 4y ago

100% agree. I started getting into Twitch during the beginning of the pandemic and got to know a lot of people who make money via online tournaments. The main channels I watch are Call of Duty and Super People. It's fascinating watching these streamers compete. If I could invest as an average joe, I would.

yamtaddle 4y ago

3) Esports gambling companies

Mountain_Skies 4y ago

Point two reminds me of how some university professors make most of their money doing consulting and serving as expert witnesses. While their university salary pales in comparison to what they get from their other activities, it is their status as professors at reputable universities that makes the other income possible.

colordrops 4y ago

Based on your explanation it sounds like a good thing that investors and sponsors are pushed out as they are middle men and rent seekers. Allow those with skin in the game (womp womp) to profit.

echelon 4y ago

Twitch isn't doing so hot. Twitch recently lowered their payouts (again) [1], making streamers and creators furious. More blood from the stone. Twitch is bad for discovery, and they're continually losing creators to YouTube(Gaming). Amazon doesn't report all of the key financials from Twitch, but it's expensive to support infra for everybody who wants to be a streamer. Only the top 1% draw an appreciable audience, and the ads cater to a demographic that doesn't have substantial disposable income. If Amazon didn't have other interests in gaming (Luna, their own MMOs and game studios, etc.) that synergize well with Twitch, they would probably cut the losses. As a comparison, Reddit recently cut their own streaming product [2]. [1] https://techcrunch.com/2022/09/21/twitch-subcription-revenue-share-changes/ https://techcrunch.com/2022/09/21/twitch-subcription-revenue... [2] https://www.reddit.com/r/pan/comments/yl5zzd/update_on_the_future_of_live_video_broadcasting/ https://www.reddit.com/r/pan/comments/yl5zzd/update_on_the_f...

cutenewt 4y ago
This is a good reminder of Google's advertising economies of scale. It doesn't surprise me that Twitch is struggling. TikTok could suffer the same fate as Twitch: their payouts aren't as good as YouTube (Shorts) on a per view basis. The only thing that's keeping TikTok in the game is their reach. Once reach hits parity, I wouldn't be surprised if TikTok succumbs to YouTube.
Kathula 4y ago
By "continually losing creators to YouTube" you mean YouTube paid a few top streamers million dollar contracts? I don't see anyone prefer streaming on YouTube over Twitch unless you already have a big channel on yt. Discovery is still better on Twitch. There's raids and hosts, and simply picking a catogery/game you like and see everyone who streams it. How do I find a Dota livestreamer on Youtube? There's not any intuitive way, if I search it I just get videos. And then there's twitch prime, the supreme chatting experience of twitch etc.
- ilyt 4y ago
  > the supreme chatting experience of twitch etc. You mean the stream of high-pressure shit is ejected at higher rate ? That's pretty much "chatting experience" on any big channel regardless of platform...