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How Come Esports Prize Pools Go Over Millions of Dollars?

Date Posted: November 19, 2018

The world of esports has lately been gaining the attention of the world. The number of multiplayer games and players increase day by day. But that is not all as the prize pools for these competitive multiplayer gaming tournaments skyrocket as well.

Derived from the words “electronic sports,” esports are multiplayer video games played by professional gamers competing with each other or one another. These tournaments are usually shown live for real-time viewing, and sometimes for real-money betting.  The popularity of esports even got players into making it as a legitimate career path since the prize pools of each tournament can actually match, or even surpass, the earnings of professional athletes.

But how are these massive prize pools accumulated? And how do each team earn from this growing industry?


Massive Prize Pools Explained

The reward given to players during tournaments is called a prize pool. It is collected money given to all the competing teams at the end of the tournament, with the winner getting the biggest share. Normally, the prize pool comes from the buy-ins of players’ entry fees. But that is not the case with esports.

Companies get the prize pool from crowdfunding. They raise small amounts of money, usually via internet marketing, from a huge number of people or supporters of the game. For instance, this year, Dota 2 The International 2018’s prize pool was worth $25,532,177. But how did Valve, the developer of the game, come up with this massive prize pool?

A blog post from The Esports Observer said that the prize pool was accumulated from Valve’s US$1.6 million contribution plus the sales of its in-game digital compendium called Battle Pass. The post said:

“Valve takes 25% of Battle Pass sales and dumps them directly into the annual International prize pool, generating millions of dollars of additional reward for pro teams while amplifying the stakes for both players and viewers alike.”

The Battle Pass can give players exclusive deals such as in-game treasure, cursor packs, new music, digital packs, and bonus game modes for US$9.99. Having a Battle Pass also gives players points that will help them level up. Players can buy a Battle Pass worth US$2.49 to increase five levels. To increase 11 levels, players need to buy a pass for US$4.99, and those planning to go up 24 levels should buy a pass for US$9.99.

According to Statistica, there were over 739,000 players online at the same time on Steam on October 13, 2018. There was even a time in March 2016 that the number of players reached 1.29 million. With that huge number, it came as no surprise when Valve was able to accumulate a prize pool worth more than US$20 million, mostly out of the Battle Pass purchases.

The more players and supporters an esport has, the higher the in-game purchases it can earn, and the bigger its prize pool can get.


Biggest Prize Pools in Esports History

As of this writing, the biggest esport in terms of prize pool is Fortnite. On May 21, 2018, The Fortnite Team released a statement through its Twitter account that its game developer, Epic Games, will provide US$100,000,000 for the 2018 to 2019 season tournament. The tweet read:

“Grab your gear, drop in and start training. Epic Games will provide $100,000,000 to fund prize pools for Fortnite competitions.”

After the announcement, esports analysts shared their thoughts on this massive prize pool.

Bethany Lyons, SuperData esports analyst, said:

“By dedicating $100MM to fund prize pools competitions, Epic has made Fortnite the biggest esports in the world in terms of prize money.”

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Before this announcement, the biggest prize pool in the history of esports was from Dota 2 The International 2018. The prize pool of that event was worth US$25,532,177. But that enormous prize was given not only to the winner. The money was divided among all the teams in the said tournament.

When The International 2018 ended, the prize money was shared among 18 teams. According to Dota 2 Prize Pool Tracker, the following was the prize pool distribution:

  • 18th and 17th place – US$63,830
  • 16th to 13th place – US$127,661
  • 9TH to 12th place – US$382,983
  • 7th to 8th place – US$638,304
  • 5th to 6th place – 1,148,948
  • 4th place – US$1,787,252
  • 3rd place – US$2,680,879
  • 2nd place – US$4,085,148
  • 1st place –US$11,234,158

In related manner, The International 2017 is the third in rank with its more than US$24 million prize pool. The fourth top esport tournament based on prize pool is The International 2016 with its prize money worth more than US$20 million.


Confederations Cup, Other Sporting Events Outprized

The increasing prize pools of esports tournaments are so massive that some even outprized the wins a player or a team could get from traditional sporting events. For one, last year’s Confederations Cup had only US$20 million prize pool. Indy 500 2018’s US$13 million also lost to The International 2018’s over US$25 million prize money.

Other sports outprized were US Open 2018, The Masters 2017, Stanley Cup 2018, and ICC Championship Trophy. Even US Open 2017 Tennis’ US$50 million prize pool lost to Fortnite’s announced US$100 million.

The International 2018 has a bigger prize pool than the US Open 2018. A report by ESPN said:

“The 2018 U.S. Open announced a record $53 million prize pool for the tennis tournament later this month. When broken down by event, both the Men’s and Women’s singles tournaments have a total prize pool of approximately $20 million. The singles champion and runner up will receive $3.8 million and $1.85 million respectively.”

Apparently, the Singles champion prize of US$1.85 million is still too far from The International 2018’s first-place prize of more than US$11 million.


Esports in Online Betting Industry

Esports have already reached too wide an audience that popular sportsbooks now add these gaming tournaments to the betting markets on offer. Not surprisingly, there are now online bookies that offer betting options for the biggest esports tournaments including CS:GO, Dota 2, StarCraft 2, Overwatch, and League of Legends, among others.

Before, only basketball, baseball, football, soccer, and other popular physical sports were included in the list of betting options for online sportsbook punters. But today, esports now secured their own betting category in online betting portals. Among the popular sites that have esports betting are bet365, OneHash, Pinnacle, and Unibet.

Who knows how much bigger the future esports prize pools can get? But given the immense support the industry has been getting, some people predict that there will come a time when the prize money offered by these gaming tournaments will reach $100,000,000.

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