Most of the ad revenue from a streamer’s videos is returned to the streamer. A single tournament can yield hundreds of thousands of dollars in prize money, but almost all of it goes to the players. And while team sponsorships can be lucrative, other revenue streams often have low margins. That’s a key difference with traditional sports, where no one owns the idea of, say, baseball. Teams are also constrained in how they can make their money because they don’t own the intellectual property of the games they compete in-they can’t, for example, sell a special gun in Call of Duty without the consent of the game’s publisher, Activision Blizzard. On top of that, talent is getting considerably more expensive, with players of the up-and-coming game Valorant able to demand as much as $30,000 a month, according to industry insiders. Media rights revenue hasn’t caught up with those viewership numbers, in no small part because of a lack of competition, with Twitch and YouTube still the only platforms all that interested in esports content. Teams face a number of other challenges from all directions. For instance, Overwatch’s viewership numbers are plummeting, just a few years after companies shelled out $20 million for the initial franchise slots in the Overwatch League esports insiders believe they would sell for a fraction of that price now. Teams not only have to pick the right games to compete in but also have to hope those titles stay relevant. Still, that kind of aggregation doesn’t reflect the opportunity in any one esport-a fan of League of Legends doesn’t necessarily care about Call of Duty, the same way an NFL fan doesn’t necessarily watch the NBA.
As one point of comparison, this year’s Super Bowl drew an average of 112 million viewers, according to NBCUniversal. A report last month by gaming data firm Newzoo found that the global esports audience was on track to reach 532 million this year, including 261 million “esports enthusiasts” who watch esports content more than once a month.
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