Esports Net Worth: The Billion Dollar Opportunity of Esports

We’ve heard it and said it. The nascent esports industry is growing rapidly and it’s worth millions, in fact no, the esports industry is set to be valued in billions, potentially even as early as 2019.

Esports companies, esports teams, and even esports players, are worth millions. The games played in esports tournaments are worth millions. Some argue the potential value of the esports net worth and it could one day outstrip some of the most popular traditional sports like football, basketball, and boxing.

For millennial generations and younger it’s a natural to play, be a fan, and for those old enough, even gamble on esports. So how much is the esports net worth valued at, today and tomorrow? And how does that so far compare to other traditional sports?

Billion Dollar Opportunity of Esports - TI9 Dota 2

© The International

A $1 billion valuation for 2019

Newzoo’s Global Esports Market Report 2019, published in February, estimates the revenue value of the esports market will reach $1.1 billion in 2019, up over 26% year-on-year. And, that the number of esports viewers will reach over 450 million, consisting of over 200 million esports “enthusiasts” and over 250 million “occasional” watchers. Newzoo estimates that at current growth rates, the esports market will generate $1.8 billion in revenue by 2022.

Arguably, considering esports continued and perhaps even accelerated momentum this year, Newzoo’s predictions could be smashed. It will be interesting to find out.

Read also: New Wave Esports Lists on the Canadian Securities Exchange (CSE)

Esports net worth $3 billion by 2022

A Goldman Sachs report from late 2018 estimated the esports market would reach a total value of $3 billion by 2022. It pointed to Fortnite’s first year prize pool of $1 million and streamer Ninja’s $1 million valuation, as well as the $90 million deal Activision Blizzard signed with Twitch for Overwatch.

Fast forward and this year Epic Games set a $30 million prize pool for the Fortnite World Cup alone. The Fortnite Solo’s winner, Kyle “Bugha” Geirsdorf, walked away from the Fortnite World Cup with $3 million in prize money, he’s just 16.

Bugha, winner of Fortnite World Cup

© Mike Stobe | Getty Images

Traditional Sports versus Esports

To contrast with traditional sports, KPMG’s Football Benchmark compares the earnings of football club FC Barcelona which alone reported record revenue of the equivalent of nearly $1 billion for the 2018/2019 season.

If esports reached a $5 billion industry in the next five years it would still only be equivalent in value to the top 15 teams in the English Premier League. However, that’s no mean feat and esports is in a fast-growth phase, traditional sports markets, though growing, are not growing as fast.

There is also the added problem for traditional sports that viewers, especially younger ones, are exiting towards esports. A survey of young Americans found 75% of 21-35-year olds said esports took them away from traditional sports patronage.

It’s all going the right way for fast-paced and fast-growing esports

Another player, Johan Sundstein (NTtail), has earned $7 million playing Dota 2. Cloud9 became the most valuable esports team last year, reaching a $310 million valuation according to CNBC and Forbes. Forbes also said at the time that nine esports teams had exceeded a valuation of $100 million each. In comparison, the highest value traditional sports team is the NFL’s Dallas Cowboys worth $5 billion, but in fairness the team was established 59 years ago.

For game developers, owners, and their parent companies, China’s Tencent tops the revenue charts with 2018 earnings of $8.3 billion. Activision Blizzard, with Overwatch as its best-selling game, generated $3.5 billion in revenue in 2018.

So, esports has a way to go to catch up with traditional sports, but things appear to be going esports way. The industry is booming, revenues, viewers, sponsorship deal values, and everything related is seeing massive growth.

Activision Blizzard is certainly not worried about the esports market’s long-term prospects. It invested $50 million into esports last year and considers the real return on this investment could take up to 10 years.

Read also: Activision Could Wait Years for Promised Esports Profits