The eSports industry is a sector that has more and more followers and that moves millions of dollars around the world. Perhaps this is inspiring you to undertake and look for opportunities to start your eSports business and that is why in this article we will tell you how you can do it. Do you want to know more? Keep reading!
How do eSports make money?
Before starting, it is normal for you to wonder if the eSports business is profitable or not and how to finance it. There are different sources of income for eSports teams, which we will tell you about below:
Sponsorships and advertising
Sponsors are one of the biggest ways eSports teams make money. Sponsors pay teams thousands of dollars to have their products featured to millions of eSports fans around the world. As a result, the teams have agreements with manufacturers of computer peripherals, gaming products, lifestyle brands, websites, apps, online services and more.
The most logical way to make money in eSports is to win tournaments. Unfortunately, this is not the most profitable way, since you will not always be the team that wins the jackpot. Tournament funds are at best sustainable at the amateur or semi-pro level, as passion fuel to fully commit to pursuing a career.
Tickets and merchandising
eSports also generate revenue through tournament and event buy-ins. Fans can buy tickets to see the teams and players live. Additionally, eSports teams and organizations sell merchandise such as jerseys, hats, and other gaming-related merchandise.
In some cases, the teams will have the production and distribution of merchandise internally. This means assuming the risk and cost of producing the merchandise. However, they will also make the most potential profit.
Streaming broadcasts and eSports events are a crucial part of the industry. Gaming streaming platforms such as Twitch and YouTube are the main source of live content and gameplay videos. Brands can pay for advertising on these platforms and gamers can monetize their streaming channels through advertising and fan donations.
Online betting is also a source of income for eSports. Fans can bet on the results of tournaments and events through online betting websites. eSports brands and leagues may also have agreements with online betting sites to increase their revenue.
Steps to start your eSports business
As you could see, the opportunities in eSports are endless. They include becoming a professional gamer, starting an eSports organization, streaming, selling equipment, and providing support services.
But, if what you want is to start from scratch, here are some tips to do it:
1. Evaluate the market
Turning an idea into a successful profitable business starts with research. You have to make sure that your idea can be transformed into profit creation. For this you can:
- Identify the competition
- Conduct a SWOT analysis
- Talk to potential customers who can confirm their interest in your product
- Search collaborators
2. Identify your niche
Having done some research beforehand, you should decide what type of eSports business you want to create. You want to manage a team from scratch, offer eSports marketing, create content, be a player, invest in eSports, form a club, provide services, among others.
3. Create a business plan
Financial planning is the foundation of your eSports business. To do this, create a budget in which you include:
- Short and long term goals
- Plan profit and loss (P&L)
- Sources of funding
- Cash flow
It includes everything you think is necessary to ensure that you can make your eSports business profitable.
4. Choose the game
If it’s not an established team yet, you need to choose which eSports game you want to specialize in. This will allow you to create a focused reputation and work on specific skills in your niche, allowing you to create a solid foundation.
Keep in mind that if you select a popular game as your starting point, it may mean bigger prize pools, but more challenging competition. A smaller or less exploited game could mean dominating the rankings, but less revenue.
5. Build your team
A strong team is essential to the success of your eSports business. Make sure you hire people who have experience in the field of eSports and who are passionate about playing video games. Your team should include a team manager, coaches, players, and support staff.
Have your group sign contracts and establish definitive rules from the beginning. It includes details about compensation and the amount of proceeds that will go to the players and the organization if the team wins the competitions.
6. Start building your eSports brand
eSports fans and gamers are interested in groups that they can easily relate to. Since most of these followers are people who enjoy playing a particular game, this allows you plenty of opportunities to develop your branded content.
At this point you should consider aspects such as the brand name, the logo and its general presence in social networks and local events.
7. Work collaboratively
Remember that some of the ways to do business with eSports is through sponsorships and collaborations with brands. That is why, in this instance, you should already start building your supplier base and offer them visibility through your team through advertising.
8. Promote your competitions
Once you’ve established your team, chosen your game, and created your brand, it’s time to start promoting your competitions. Here are some effective ways to do it:
Social networks: Social networks are an effective way to reach your audience. Create profiles on the most popular social networks and share information about your upcoming competitions and events.
Email Marketing: Email is an effective way to keep your fans updated on your upcoming competitions and events. Send regular emails to your email list to keep your fans informed.
Sponsorships: Sponsorships are an effective way to earn income and promote your competitions. Find sponsors who are interested in eSports and willing to invest in your business.
Online Advertising: Online advertising is an effective way to promote your competitions and reach a larger audience. Use online advertising platforms to reach your target audience.
Live Events: Live events are an effective way to promote your competitions and reach a larger audience. Organize live events in your city and elsewhere to increase your reach.