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 esports 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. Esport 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.