How do esports teams make money? A complete breakdown

The most successful esports teams have the potential to make a lot of money in competitive video games. Esports is a growing industry; every year, new opportunities are available for players aiming to compete professionally.

The revenue streams for esports teams vary heavily, as do their income ranges. For esports competitors seeking a career, the money made through professional tournaments can be significant. This guide will walk you through everything you should know about how esports teams generate revenue to support their players and coaches.

The main way that esports teams generate revenue is by winning the biggest esports tournaments. Even teams that don’t finish in first place have a chance to earn large cash prizes. Unfortunately, this income source is unreliable since there’s no guarantee of finishing high enough to win prize money.

The most successful esports teams have a better chance of winning tournaments, but underdogs simply can’t rely on random income. Some leagues even offer revenue sharing, which allows teams to net a percentage of the league’s overall profit.

A better way for esports teams to generate reliable revenue is by partnering with big brands, like Monster Energy or Red Bull. Athletes promote the brand’s product, and then the company pays their team for the advertising. Sometimes the advertising is posted on an esports team’s social media, while jerseys provide another avenue to promote third-party products.

Esports players can even earn money by partnering with games like Rainbow Six Siege. The developers create in-game items based on major teams, who then receive a percentage of the sales.

These are the primary income sources for the most successful esports teams:

Lastly, esports teams can make money by selling merchandise and creating paid fan subscriptions. T-shirts, books, and gaming chairs are often sold on an esports team’s online shop. All of these options offer a service to fans, so a personal store can often be the best way to generate reliable income for big esports organizations.

If a player has a big enough online presence, they can also make money by streaming on Twitch or posting to YouTube. Plus, players who decide to retire from esports will have another income source to rely on.

Esports teams have to pay many expenses to keep their organizations afloat. Most notably, a team’s coaches, players, and general staff all need salaries. Hotels, travel, and food expenses can get expensive for an entire team, too. Benefits, like life insurance and health insurance, are another extra expense.

Tournaments often require fees to enter, plus any unexpected incidents that may occur during a competition, like replacing equipment. It takes a lot of revenue for teams to reach the big leagues.

Compared to traditional sports leagues, esports teams simply don’t generate that much profit. Like the NBA or NFL, esports competitors require constant training to stay at the top of their game, so they usually rely on the salaries provided by their teams.

The income range for esports players is wide, with some competitors earning millions of dollars while others only bring in thousands. The richest esports teams, like FaZe Clan and Team Liquid, have earned tens of millions throughout their organization’s existence. Once a team gains fame by repeatedly winning major tournaments, they often gain a larger online presence, offering new opportunities to sell merchandise or partner with big brands.

European esports organization, Team Liquid, earned millions in 2024. At the International 2024, Team Liquid secured first place and won over $1.1 million, netting them a significant source of revenue. However, it’s worth considering that the biggest esports teams also participate in more tournaments, greatly increasing their chances of scoring a big win.

For Team Liquid or OG, competitions are often a way to earn big, but smaller esports teams can’t rely on such life-changing income. Many lesser-known teams only manage to earn $10,000 or less from tournaments, so they have to rely on secondary income sources, like merchandise shops or Twitch streaming.

The biggest esports prize winnings often go to the largest organizations. We’ve listed a general idea of how much an esports team will generate per year based on its notoriety and size.

There’s a major disparity between how much money esports teams make per year, especially at the top compared to the bottom. Smaller esports teams, like Beyond Gaming, have only made tens of thousands of dollars from tournaments. These teams not only have less funding, but their players also need to focus on other aspects of their career, like YouTube, to make a stable income.

On the flip side, organizations like Team Liquid have more resources to contribute towards training players and hiring talented coaches. Smaller esports teams are at a major disadvantage, as the biggest organizations earn more than twice as much. As esports gains popularity and teams organize more professionally, the income disparity may shrink.

Esports players are rarely wealthy, and only those at the top regularly win huge cash prizes. Luckily, the nature of esports gives every competing team a chance at victory, even if they’re an underdog. According to Statista, the highest-paid esports player, Johan Sundstein, has earned more than $7 million throughout his esports career, but that’s not feasible for everyone.

Teams with more income can hire better coaches and provide more resources to their players, while those at the bottom may need to train harder for an equal income. Esports teams might find new ways to bring in revenue in the future, which could help lower the income gap. For now, athletes need to focus on winning tournaments, selling merchandise, and third-party advertising to turn a profit.