Fan Supported Prize Pools ($30M)

Esports Prize Pools

As we’ve written about before (Esports Prize Pools: $155.9M (2018), esports prize pools are getting larger every year. This week, Fortnite is hosting the Fornite World Cup, which has a $30M prize pool (watch live) that is 100% contributed by Epic Games. However, Dota 2 just surpassed this record at $30.6M for their upcoming world championship, “The International”.

Every year, The International beats their previous prize pool record. What is most fascinating is that well over 90% of the prize pool is crowdfunded. As of today, The International prize pool is set at $30.6M of which only $1.6M (5.2%) is committed by Valve (Dota 2 developer). It is expected to surpass $40M over the next 34 days ahead of the tournament.

This is indicative of the growth of the esports market. Gamers are increasingly directing their disposable income into not only gaming, but the competitive landscape of esports. This market is still in its infancy yet its growth is not merely continuing but accelerating.

3 Things of Interest:

1) Puma / C9: Puma is launching an esports fashion line with pro-esports team, Cloud9. This clothing line will make its way to retail locations. Matt Shaw, team head of digital marketing at PUMA, said, “This is the first time we’re designing apparel for someone whose job is to appear on stream.” Fashion brands will continue to capitalize on the fans of esports brands like Cloud9. (Esports Observer)

2) Blizzard / Talent Flight: one of the three co-founders of Blizzard, Frank Pearce, has left the company after 28 years, marking the latest high-profile departure from the game studio. Pearce is the latest member of management to leave the studio (who own Overwatch League). Overwatch League commissioner Nate Nanzer left in May to join Epic Games (Fortnite) and global esports director Kim Phan left in June. On the eave of the Call of Duty (CoD) franchise league, this looks like a continuation of talent flight, which is cause for concern. I’m surprised this isn’t being discussed more publicly, especially as Blizzard is asking for $25M+ per franchise for CoD. (Esports Observer)

3) Kroenke / $30M bid for LCS: Riot Games is reviewing a bid by Kroenke Sports & Entertainment to buy one of the franchise spots for League of Legends (100M+ players), which is currently owned by a group in LA called Echo Fox (led by former NBA player, Rick Fox). The purchase price is rumored to be $30.25M (up from the initial $10M buy-in in 2017), and Kroenke already owns the LA Gladiators (Overwatch League, $20M buy-in). Of the 10 franchise spots for the LCS, this would be the third to change hands as we head into the 2020 season next year (Immortals bought Optic, Dignitas bought Clutch Gaming). Esports teams are still developing, and with that maturation there is plenty of opportunity for healthy M&A. (ESPN)