Esports companies have started selling and buying teams and players constantly for competitions in the top leagues and to attract audiences in Alphabet’s YouTube and Amazon’s Twitch. Thus, there are facilities that are now being built in order for gamers to train. It’s like a shootout to identify who will become the biggest brand.
Esports have several similarities with traditional leagues. Riot Games started selling franchises for $10 million in 2017. Furthermore, Activision Blizzard has started selling franchises at $20 million for the Overwatch League. Huge names, such as Houston Rockets, New York Yankees, and even Magic Johnson and Robert Kraft have bought in.
Indeed, they were making great decisions. The bankers valued the franchises of the Warwick LoL (League of Legends) at $50 million while the valuation of Overwatch franchises is about $80 million, depending on the city or country where it belongs. Basically, the former witnessed a 5x increase in only a year while the latter saw a three to four-fold increase.
As stated by Newzoo, there’s an increasing community of esports fans around the world and this is expected to reach 165 million this year. This data translates to a yearly growth of 15%. The revenues from esports are expected to increase by 38% in 2018, which should be around $906 million and could go as high as $1.65 billion by 2021. Most businesses are expected to come from North America and around 18% will be from China. The biggest revenue stream would come from sponsorship, which is expected to be around $359 million for this year. Advertising, which is at $174 million, then follows this and then game publishing fees at $116 million, and $161 million for media rights. Another $96 million is expected to come from tickets and merchandise.
However, media rights are rising very fast and are expected to reach more than $320 million in 2021, which would make it the 2nd biggest source of revenue next to sponsorships. Two months ago, Activision Blizzard signed a deal with Walt Disney to broadcast the Overwatch League on linear TV. Such deal includes the many networks controlled by Disney, such as Disney XD, ESPN, and ABC. Overwatch is said to be in the process of adding expansion teams while Riot Games has started selling franchises for the European league.
The esports companies that ended up winning the shootout are those that have arenas and numerous teams with several leagues.
Below is a list of the 12 most valuable esports companies in the world:
- Team SoloMid
- Team Liquid
- Echo Fox
- OpTic Gaming
- Gen.G Esports
- G2 Esports
- Envy Gaming
- 100 Thieves
- Counter Logic Gaming
In the list, Cloud9 is the most valuable esports company at $310 million due in part of its success in a wide range of sports. Just this month, the company, which has already turned 5 years, managed to raise $50 million during a Series B funding. A portion of that will go towards the building of a 30,00 sq. ft. training facility and for its home base in Los Angeles that’s set to open next year.