How Do Esports Teams Make Money?
By Roger on Nov 26th, 2025, 07:20
With the final match of the tournament drawn to a close, the spotlight is on the champion team, and it’s easy to focus on the glory of the moment and the seemingly staggering amount of prize money they’ve earned. It’s easy for us to wonder how great it would be to gain so much money from playing video games and having fun, but there is more to that than it seems.
Behind the glitter, glitz, and glamour of professional Esports lies a lot of work in the background. You’ve got boardroom meetings and high-stakes decisions, even with what seems to be a money-making machine. If all these Esports Teams relied on tournament winnings alone, the whole thing would come crashing down fast.
The truth of the matter is that Esports Teams need to look at the much bigger picture and consider multiple streams of revenue. Let’s take a deeper look at how these teams work.
Let’s get this out of the way first: tournament winnings could reach as high as $30 million or more, as is the case for Dota 2’s The International. That’s huge, but there are multitudes of teams vying for that prize. How can any team be sure to win it even once? So many factors that can affect your chances of winning that there’s just no way to guarantee it. Also, not every tournament prize goes that high.
Then there’s the issue of having to split that amount among everyone with a right to a cut. Even $30 million becomes a paltry sum after deducting all expenses and then dividing it among everyone involved. If you’re left with 200 thousand, that’s still a lot for an individual, but not for a Pro Team.
Most Teams consider these winnings as just a sort of performance bonus. Now, let’s take a look at where the real money is made.
If you’re anything of a video game enthusiast these days, you’ll have seen some sort of content creator in some way or other. They’re everywhere, from promoting upcoming games to providing game guides and strategies, or just showing off their skills. Many of these content creators are professional gamers, and they’re all part of a content creation machine.
As professional gamers, each one would have a dedicated following, making for a strong audience base for their streaming content. Imagine gaining fans during your professional play and through content streaming; they’re growing both fan bases and could even expand both sides to earn even more for themselves and their teams.
There’s the even bigger slice of the pie, media rights. Pro leagues, such as the Valorant Champions Tour (VVCT) and League of Legends Championship Series, sign multi-million-dollar contracts for broadcasting deals, much like professional sports leagues do. Participating Esports Teams earn a portion of this as well, building something similar to a media empire.
Just like Soccer teams such as the LA Galaxy, which regularly sign sponsorships with Kia Cerritos, Bodog, and AEG, Esports is no different. This is a huge market that potentially earns millions through video games, having grown into the multi-billion-dollar industry it is today.
There are even strategic partnerships between Teams and entities like TSM or Team Liquid, allowing huge brands like Red Bull or Honda to reach Esports audiences who’ve proven to be hard to achieve using traditional advertising.
Another reliable money maker is in selling official Team merchandise. Esports have drawn significant inspiration from professional sports, making selling merchandise another notable revenue stream. Certain organizations, such as FaZe Clan, have positioned themselves as lifestyle brands despite their humble beginnings.
To understand all of this a little better, let’s take a look at Newzoo’s breakdown of their Global revenue from 2018. Here, we’ll see that Sponsorships make up the bulk of the pie at 40%. With a total annual revenue of $ 900 million, they’re making a good business, with a 38% increase from the previous year.
Imagine how much they’re making today if they were able to continue the upward trend of their annual revenue; all of this without any tournament winnings in the pie. It’s also easy to imagine growth on their side, with both the Video Games industry and Esports in general having enjoyed continuous year-on-year increases since 2020.
As the Esports industry continues to grow, changes are being made to revenue streams over time. Venture Capitals have begun investing in the Esports Industry, with investors from Traditional Sports now setting their sights on the Esports scene. This also helps Esports make the case for being a legitimate sporting industry.
Teams are also becoming more creative in their financial endeavors, with team-branded in-game items, such as skins, entering the fray. Some teams have also introduced subscription-based fan clubs, providing exclusive access to various content to paying supporters.
Esports teams and, by extension, their members, earn a lot, but they’ve also invested a lot to get to that point. Time, dedication, effort, commitment, and monetary costs; it takes a lot to go pro, let alone become a successful one. It all starts with making the right investment.
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