What Is the Prize Pool in eSports?

Technically, the first-ever video games championship was half a century ago in 1972 at the ”Intergalactic Spacewars Olympics”. Coincidentally, only five Stanford University students applied, and the first of many prize pools in eSports was a subscription to Rolling Stone magazine.

What we consider eSports today only came about with Bethesda’s legendary game Quake and the arena mode in Quake 2. The first real tournament was played in this arena in 1997. It lasted the better part of May because each of the 2000 participants needed to play in groups of 4, one at a time.

The grand prize here, won by one Dennis Fong, also known as Thresh, was a red 328 Ferrari owned by the CEO of id Software John Carmack. That started the line of grand prizes and real competitions when it comes to video games. And today, there are 4 genres of video games where large prize pools are common:

• FPS (First Person Shooters)
• RTS (Real-Time Strategy) 
• Fighter games
• Driver games

Not to mention that there is a growing popularity of what many are calling 3rd person shooters, such as Fortnite and GTA Online. These games come with multi-million dollar prize pools, and individual players and teams can get even more from sponsors and fans through Twitch.

Not All Online Games Are eSports

It is important to stress that not everything that is played online, including competitive play, is considered eSports. Most computer games are entertainment, and even some games like the no deposit Book of Dead, which is a very popular slot game with a lot of fun mechanics, but no human adversaries. Such games can be played for money are not a competition against other people, just math.

There are also genres of games that are not well suited for competitive streaming, even though millions play them. RPG games, including tabletops, are better as a slow series than just a 30-minute insert. Strategies also fall into this category, as they usually rely on slow resolutions rather than quick thinking and reflexes like other games.

But, there is also the case where mods for specific games become an eSports hit without the original having that ability. That is the case with Counter Strike and even DotA which started as a mod for Warcraft III. At the first ”The International” tournament in 2011 in Cologne, Germany, a Ukrainian team Natus Vincere, or Na’Vi (Latin: Born to Win) won the $1.000.000 grand prize. That is seen as a turning point and since then the prizes have gone up dramatically. 

Where Does the Money Come From?

Although today a lot of the income for eSports tournaments comes from people actually buying tickets and coming to a venue that is still just a fraction of the prize pools for eSports. The biggest lump sum comes from sponsors that want to sell computer parts or peripherals.

The other big source of money for prize pools are game development companies and platforms. For instance, companies like Riot are more than willing to organize and promote tournaments in the games they made such as Valorant and especially League of Legends. The biggest prize pool for LoL was 6.4 million dollars in total.

Most people compare League of Legends (LoL) and Defense of the Ancients 2 (DotA 2) because they are visually and mechanically similar. But, when it comes to prize pools, they are very far apart. The biggest prize pool for DotA 2, which collects a lot of money selling skins and other items, was The International 10 in 2021, which was a whopping $40 million.

We can be quite certain that prize pools in eSports will continue to grow. Namely, the more the prizes grow, the better the teams competing are, which draws in the crowds, which further draws in the sponsors. Every company wants the winning team to have their headphones, mousepads, and keyboards.

Aside from the developers and publishers of the game itself, who have a vested interest in selling in-game items and promoting the game, a huge contributor are betting operators like Fun88, Parimatch, 1xBet, Vie.GG and similar who have jumped on the new location to find customers.  Still, the biggest sponsors are those peripheral manufacturers such as:

• Razer
• Redragon
• Logitech.
• Mad Catz

Those sponsors are trying to promote what is projected to be an $11 billion market in 2028. The game developers are in a much more competitive market that is projected to reach $293.2 billion by 2027. No company connected with gaming wants to miss a chance to have a part of that pie.

Why Are Prize Pools So Large?

It is almost certain that some eSports will reach the level of fame and viewership that is currently reserved for regular sports. Even today, the biggest tournaments have prize pools that are akin to smaller sports like volleyball and water polo, lagging only behind the major global sports like football, soccer, or basketball.

This is all because of the fans. As the generation growing up with video games has become the biggest earners on the planet, there is a lot more money to be made by selling gaming-related products and a lot more eyes willing to be attached to the screen when someone else is playing.

Because of that jump, companies like Red Bull are willing to invest $580 million into eSports sponsorships in one year. They want to make the biggest spectacle as they know that their investment will come back triple.

In time, the number of people who grew up watching eSports will grow to be similar to the number of people watching regular sports. And even today, it is more likely for a child in the West to be a frequent DotA player than to do sports, making it more likely that they will watch others play it.

Conclusion

The prize pool in eSports can reach tens of millions of dollars, with the winners taking home millions. And, to make matters more interesting, this number is set to grow in the future. With so many people watching matches in video games every day on Twitch and YouTube, this has become an industry in itself, and everyone from sponsors to game developers and studios wants a piece of that pie.

The final winners are the players, which includes those on the podium fighting for cash prizes, as well as all of us amateur gamers that just want to play good competitive games online in our downtime.