Esports: everything you need to know about this exploding digital market

*The fol­low­ing con­tri­bu­tion has been devel­oped in greater detail in an aca­d­e­m­ic pub­li­ca­tion by Beng­hozi and Simon (2025)¹

Along­side the fast-grow­ing video games indus­try², a brand new autonomous and pow­er­ful seg­ment of the mar­ket has emerged with quite dif­fer­ent struc­ture:  esports. A con­trac­tion of “elec­tron­ic” and “sports”, it com­bines com­pet­i­tive video game play in front of an online audi­ence with the addi­tion of face-to-face spec­ta­tors. The mar­ket val­ue of esports gen­er­at­ed $2,396.9m in rev­enue in 2024³, with an audi­ence expect­ed to reach 640.8 mil­lion by 2025^4,5.

Esports are spread over most of the usu­al video games gen­res (see Tab. 1) and rely on key com­po­nents includ­ing: inter­con­nec­tiv­i­ty (Inter­net over broad­band freed from phys­i­cal venues); online games on con­soles, PCs and mobile; rel­e­vant infra­struc­tures to host gamers; and a mass audi­ence⁶. The esports ecosys­tem is organ­ised through pro­fes­sion­al or semi-pro­fes­sion­al com­pet­i­tive gam­ing with­in an estab­lished struc­ture (tour­na­ment or league) with a spe­cif­ic goal, such as cham­pi­onship title or prize money. 

In terms of the glob­al land­scape, esports share the fea­tures of the video games indus­try as a whole⁷, name­ly a strong dom­i­nance of Asia: South Korea first licensed pro­fes­sion­al play­ers in 2000 and well over half of esports views (57%) come from the Asia Pacif­ic region⁸. Europe account­ed for 16% of views, and North Amer­i­ca 12%. 

Esport coa­lesces two lines of busi­ness: video games on the one hand, and sport­ing events on the oth­er. This results in a land­scape (Fig. 1) made of devel­op­ers, game pub­lish­ers, leagues and tour­na­ment organ­is­ers, con­tent dis­trib­u­tors (stream­ing com­pa­nies, OTT and broad­cast­ers), teams, soft­ware and hard­ware providers. Like all cul­tur­al indus­tries, the sec­tor is marked by a fringe oli­gop­oly: pow­er­ful dom­i­nant play­ers revolve around a myr­i­ad of small­er, inde­pen­dent players.

Developers

Devel­op­ers – stu­dios with mul­ti­dis­ci­pli­nary teams – design the game and elab­o­rate the nec­es­sary soft­ware to run it. Most com­pa­nies are small and numer­ous. They spe­cialise in cer­tain types of games, may tar­get a spe­cif­ic device or devel­op for a vari­ety of plat­forms. Since the pro­duc­tion of video games is made of high fixed costs, the devel­op­ers need ear­ly invest­ments. They must often lean on pub­lish­ers as pre-financers.

Publishers

The pub­lish­ers man­u­fac­ture video games, license the prop­er­ty rights and the con­cept of the game, han­dle the mar­ket­ing and often act as dis­trib­u­tors and retail­ers. They devel­op games inter­nal­ly or order them from devel­op­ers. Pub­lish­ers own the intel­lec­tu­al prop­er­ty of the video games which esports leagues, clubs and play­ers com­pete in. Major pub­lish­ers fund esports teams or spon­sor tour­na­ments. They can own mul­ti­ple games and be organ­is­ers of the games they oper­ate them­selves. Gen­er­at­ing the deal-flow, man­ag­ing large bud­gets, devel­op­ing glob­al brand­ing, and organ­is­ing mar­ket­ing and prop­er­ty rights give pub­lish­ers a strong posi­tion. Con­se­quent­ly, in most esports, the devel­op­ers and pub­lish­ers depend on the same com­pa­ny; for exam­ple, Bliz­zard Activi­sion or Ten­cent retain their own studios.

To stream and pro­pose the view­ing of game tour­na­ments, con­tent dis­tri­b­u­tion com­pa­nies pay the pub­lish­ers and orga­niz­ers. These stake­hold­ers come from sev­er­al ori­gins and core busi­ness­es. His­tor­i­cal­ly, the infra­struc­ture was car­ried by broad­cast­ing, most­ly cable TV chan­nels. This lega­cy chan­nel changed with inter­con­nec­tiv­i­ty and play­ers such as Twitch, Tro­vo, and YouTube. Along­side these major plat­forms, event oper­a­tors are pro­vid­ing their own view­ing plat­forms (e.g. ESL FACEIT Group). Sim­i­lar­ly, con­tent cre­ators and users like influ­encers or pro-play­ers broad­cast their own channel.

The dis­tri­b­u­tion of e‑sports is not as finan­cial­ly lucra­tive as oth­er sports, as most events are broad­cast via online platforms.

Stream­ing plat­forms are also tech­nol­o­gy com­pa­nies. They invest heav­i­ly in their infra­struc­tures to ensure that their cus­tomers, wher­ev­er they may be, have access to their con­tent and the same qual­i­ty of ser­vice. Stream­ing com­pa­nies rely on a fixed rev­enue from month­ly sub­scrip­tions. They may also col­lect adver­tis­ing mon­ey either through com­mis­sions on prod­uct sales, or via part­ner­ship and rev­enue shar­ing pro­grams on their sites. Spon­sor­ship is anoth­er source of rev­enue. As these com­pa­nies are sub­sidiaries of major tech firms, they have an increased bar­gain­ing pow­er to deal with pub­lish­ers and events hold­ers: they may strike exclu­sive deals with pub­lish­ers of pop­u­lar esports titles. Here­after, dis­trib­ut­ing esports is not as finan­cial­ly reward­ing as oth­er sports because most esports events are streamed via online platforms.

Event operators, organisers and leagues

New play­ers have emerged, inspired by the mod­el of sports and events man­age­ment. They con­tributed to the pro­fes­sion­al­i­sa­tion of esport through the cre­ation of ded­i­cat­ed teams and the organ­i­sa­tion of competitions.

Teams com­pet­ing for cham­pi­onships con­sist of asso­ci­a­tions or com­pa­nies that employ play­ers to par­tic­i­pate in com­pe­ti­tions as an iden­ti­fied team. They are part of fed­er­a­tions, asso­ci­a­tions and leagues divid­ed into divi­sions and small­er com­pe­ti­tions involv­ing more play­ers, all year round. They design larg­er forms of com­pe­ti­tion and pro­vide them a legal and reg­u­la­to­ry frame­work. Fed­er­a­tions, leagues and asso­ci­a­tions are con­sti­tut­ed as the gov­ern­ing bod­ies. They build and oper­ate infra­struc­tures for esports, estab­lish, main­tain and run acad­e­my, pro­vide com­put­er train­ing, and set up the glob­al frame­work of competitions.

Third-par­ty tour­na­ment orga­niz­ers must often pay sig­nif­i­cant fees to pub­lish­ers. Despite pow­er­ful play­ers from the dig­i­tal or sport sec­tor, some inde­pen­dent event organ­is­ers may nev­er­the­less thrive. Elec­tron­ic Sports League (ESL, found­ed in 2000 in Ger­many) is one of the old­est esports com­pa­nies which organ­ise com­pe­ti­tions world­wide, hosts high-pro­file tour­na­ments for pro­fes­sion­al players.

Teams and players

His­tor­i­cal­ly, play­ers start­ed com­pet­ing in a rather infor­mal way. Pro­fes­sion­al play­ers were self-organ­is­ing. Since that begin­ning, pro­fes­sion­al esports organ­i­sa­tions have been set up to man­age and super­vise esports “ath­letes” and teams.

Scholz, and Nothelfer⁹ break down the progress of pro­fes­sion­al­i­sa­tion into four steps. Ini­tial­ly, play­ers com­pet­ed infor­mal­ly against each oth­er as a hob­by. Then, the organ­i­sa­tion of ama­teur esports gets for­malised with­in a club and com­pe­ti­tion with oth­er play­ers takes place. Next, semi-pro esports emerged where pro­fes­sion­al struc­tures were set up and looked for exter­nal sup­port (coach­es, spon­sors, etc.). These enti­ties pro­vid­ed a tal­ent pool for pro­fes­sion­al play­ers. Final­ly, the struc­tur­ing of pro­fes­sion­al esports takes place: play­ers under con­tract par­tic­i­pate to the high­est lev­el of com­pe­ti­tions and join com­mu­ni­ties of play­ers such as the US Over­watch Play­ers Asso­ci­a­tion. Pro­fes­sion­al teams are form­ing around game titles and main­tain­ing rolls of play­ers to com­pete in tour­na­ments globally.

Esports teams derive most of their rev­enue from spon­sor­ships and mer­chan­dise sales.

An impor­tant dimen­sion of pro­fes­sion­al­i­sa­tion is the way to build sus­tain­able earn­ings^10,11. E‑sport glob­al rev­enue share includes dis­trib­ut­ing sub­scrip­tion, dona­tion, and adver­tise­ment rev­enues, as well as a part of spon­sor­ship and media right rev­enue. Last­ly, rev­enue share incor­po­rates in-game dig­i­tal goods. Esports teams derive most of their rev­enue from spon­sor­ships and mer­chan­dise sales (see Fig. 2), unlike tra­di­tion­al sports teams earn­ing most of their income from tick­et sales and broad­cast right. Regard­ing play­ers, the basic source of income is the salary received from their team: an aver­age salary is $50,000–$60,000 annu­al­ly¹². But play­ers can also add oth­er streams of rev­enue¹³. Like in tra­di­tion­al sports, the range of remu­ner­a­tion is pret­ty broad and varies based on the size of the team, the abil­i­ty of the play­er, the type of game, the kind of competitions.

Esport illus­trates the take-off of a niche mar­ket on the fringes of a major sec­tor. Fuelled by inter­con­nec­tiv­i­ty and ultra-high broad­band net­works, cheap­er devices and the cre­ativ­i­ty of the game devel­op­ers, what start­ed as an infor­mal meet­ing of play­ers com­pet­ing togeth­er in an Inter­net café or an arcade venue, mor­phed into a full-blown inter­na­tion­al indus­try. This results in the growth and grad­ual pro­fes­sion­al­i­sa­tion of the activ­i­ty, but also in the dif­fi­cul­ty of tran­si­tion­ing to an autonomous and sus­tain­able ecosystem.

Nev­er­the­less, most of the stake­hold­ers are far from being prof­itable. A nascent indus­try takes some time to sta­bilise and to work out the rel­e­vant busi­ness mod­els, espe­cial­ly as free con­tent remain present.  Such a fea­ture implies rethink­ing the tra­di­tion­al mod­els of the orig­i­nal sports and video game sec­tors in order to find inno­v­a­tive source of rev­enues. Sec­ond­ly, the pro­fes­sion­al­i­sa­tion of an activ­i­ty involves rec­on­cil­ing some­times con­flict­ing objec­tives between val­ue chain play­ers. It does not nec­es­sar­i­ly strength­en the abil­i­ty to coor­di­nate and to define a com­mon framework.