The rising popularity of esports is recognised the world over and Forbes has just released a list of the world’s most valuable esports teams which shows how well they’re really doing.
Major sporting stars like Shaquille O’Neal, Steph Curry and celebrities such as Drake, Steve Aoki and Mark Cuban are all investing in or buying their own teams and it’s not hard to see why when nine of the top 12 Esports companies listed by Forbes are valued above $100 million each.
The esports industry is projected to hit $1.5 billion in global revenues with a fanbase of 600 million gaming enthusiasts by 2020, according to Deloitte.
The growth drivers of the industry, without a speck of doubt, are esports companies that are constantly buying and selling teams and players to compete in the best leagues around and build audiences on various social media and streaming platforms, including Youtube and Amazon’s Twitch.
With an estimated new worth at $310 million, Cloud9 is ranked as the most valuable professional esports company in the world, boasting of 92 players across 12 owned teams and annual revenues crossing $22 million per annum.
Cloud9 has raised $50 million in Series B funding this month, with a large majority of that going toward building a 20,000-to-30,000-square-foot training facility and home base for its operations in Los Angeles, which is scheduled to open in 2019.
Forbes’s report suggests that player costs tend to exhaust half of an esports company’s operating budget, with the vast majority of gaming organisations still making losses as they continue to spend money to build their rosters and brands.
Sponsorship continues to remain the biggest revenue stream ($359 million this year), followed by advertising ($174 million), media rights ($161 million), game publishing fees ($116 million) and merchandise and tickets ($96 million).
With new dedicated stadium and facilities being built for esports, traditional sports leagues and teams cashing in by launching their own esports leagues and teams, and a massive increase in sponsorship and media rights value, esports is already close on the heels to reach the inflexion point coupled with impressive growth numbers.
In July, Overwatch League became the first professional esports league on the globe to sign a television broadcast deal with Walt Disney. The multi-year, multi-million dollar deal includes Disney-owned networks including ESPN, Disney XD and ABC. Overwatch is already adding expansion teams, and Riot Games has begun selling franchises for its European league.