Esport has come a long way since its humble beginnings. With the recent surge in popularity, you might as well say that esports became a part of the mainstream, with huge tournaments, worldwide stars, and of course the egregious amount of money. The current landscape of the electronic arena is quite chaotic, due to the abrupt influx of huge amounts of money, without the organization hierarchy able to handle that sudden change. The main reason esports is so popular and lucrative right now is due to paid streaming services like Twitch, which popularized the games and the players alike.

To remain competitive in the best gaming leagues, esport companies are constantly transferring players, buying and selling teams, and even built facilities where gamers can train. As a result, esport starts to look like every other hugely popular sport. Not only in terms of players, teams, and facilities but also concerning the franchises.

The major gaming companies started to sell their franchises to investors. For example, Riot Games were selling League of Legends for 10 million dollars per pop in the summer of 2017, while Activision Blizzard was offering Overwatch League actions for double the money. Many iconic sports names were brought in, including New York Yankees and Magic Johnson. Turns out it was a smart move from their side since League of Legends franchise is currently estimated to 50 million dollars and Overwatch to 60 – 80 million. In other words, League of Legends investors saw their investment increase five times, and Overwatch three to four times. Video games have really hit it big, to say least.

What is the reason for this huge increase in value? According to the Newzoo, we could expect that the number of the esports enthusiast gross to the 165 million to the end of this year, which means the yearly growth of 15%. Esports revenue also grew dramatically, by 38%, reaching $906 million and it’s estimated to hit $1.65 billion by 2021. The biggest revenue comes from North America and China, with 38% and 18% respectively, and it came from sponsorship, in form of advertising, media rights, game publishing fees, merchandise and tickets. However, media rights are the fastest growing revenue stream, and it’s estimated that by 2021 they will reach more than 320 million dollars, which makes media rights the second biggest source of revenue.

To emphasize the growing importance of media rights, let’s remind you that Activision Blizzard signed a multi-year deal with Walt Disney company to broadcast Overwatch League on the television, including multiple Disney-covered TV networks, like ESPN, Disney XD or ABC. Overwatch is preparing for additional expansion by forming the teams which will handle that, and Riot Games has begun selling franchises for each European league.

This new kind of esports got its first crossover star. It’s Tyler Belvins, globally known as Ninja, who, according to the ESPN interview, earns seven figures a month. Ninja has 3.5 million followers on Twitter, 19 million subscribers on YouTube and 11 million on Twitch. He also has shown up on the mainstream top shows, signed a sponsorship with major companies like Samsung, Red Bull and Uber Eats. Ninja is an epitomе of the video game star that all companies could only wish for. He is extremely marketable, has a huge fan base and being a gamer also means he is less prone to the blunders professional sports players tend to do.

Out of the company’s operating budget, the player cost is usually taking half. Most companies are cash flow negative because they keep spending money to hire players and sign contracts with brands. All this caused a huge rise in the capital influx for esport companies. In 2017 there were only 74 major deals, worth 1.52 billion dollars, and so far in this year, there have been 63 deals worth 2.34 billion dollars. For example 10 years ago there were 6 deals worth 34 million dollars. The rise of the money drew a lot of companies in the game, but a dilution of the market is acceptable because 20% of something worth $1 billion is greater than 100% of something worth $100 million.

This is the list of the most successful gaming companies in the world today. You’ll probably recognize some of the famous names in competitive gaming.

1. Cloud9 with an estimated value of $310 M and with $22 M revenue



2. Team SoloMid, $250 M and with $25 M revenue

3. Team Liquid, $200 M and with $17 M revenue

4. Echo Fox, $150 M and with $11 M revenue

5. OpTic Gaming, $130 M and with $10 M revenue



6. Fnatic, $120 M and with $9 M revenue

7. Gen.G Esports, $110 M and with $12 M revenue

8. G2 Esports, $105 M and with $8 M revenue

9. Immortals, $100 M and with $5 M revenue

10. Envy Gaming, $95 M and with $5 M revenue

Conclusion

Video games became one huge business, with their own companies, celebrities, tournaments, events, and other related happenings. Therefore, video game companies that realized the potential of the media rights are now thriving. The future will bring even greater expansion of video games into the mainstream, which will only provide further growth and bring more companies to join the race to the top.