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.