Is esports profitable? For the industry as a whole, it’s growing but still fragile, and for most teams, not yet. Esports earns roughly $2.5 billion to $3 billion a year from sponsorships, media rights, game publishers, tickets and merchandise, with sponsorship by far the biggest source. Some estimates top $5 billion, but only because they also count betting. Despite huge audiences and record prize pools, most teams still spend more than they earn, though a few big names, led by T1, finally turned a profit in 2025.
Key Takeaways
- Sponsorship is the largest esports revenue stream, worth about $1.1 billion to $1.2 billion in 2025.
- Market size estimates vary widely because analysts disagree on what to count; figures above $5 billion include betting.
- Most esports teams are not profitable, but that is slowly changing: T1 posted its first-ever operating profit in 2025, while teams like Sentinels still lost money.
- Game publishers fund many prize pools through in-game item sales, like Riot sending 25% of Worlds item sales to the League of Legends prize pool.
- Saudi Arabia’s Savvy Games Group has $38 billion to invest in gaming and esports, and its Esports World Cup now offers the biggest prize pool in the sport.
Esports Revenue Sources at a Glance
| Revenue Source | What It Includes | Who Gets the Money |
|---|---|---|
| Sponsorship and advertising | Brand deals, ads during broadcasts, logos on jerseys | Teams, leagues, tournament organizers |
| Media rights | Fees from Twitch, YouTube and TV to stream events | Leagues and tournament organizers |
| Publisher funding | Money from game companies, often from in-game item sales | Prize pools, leagues, sometimes teams |
| Tickets and merchandise | Live event tickets, jerseys, team gear | Organizers and teams |
| Government and investor money | Sovereign funds and investors backing events and companies | Event organizers, teams, startups |
How Big Is the Esports Industry?
It depends on who you ask. Newzoo, one of the best-known research firms, estimated esports revenue at about $1.38 billion in 2022, with nearly 60% of it coming from sponsorships. More recent estimates are higher but vary a lot: one 2025 industry report put the market at about $2.55 billion, while Statista’s widely quoted figure of nearly $5 billion includes betting, which makes up more than half of that total. For comparison, traditional sports bring in many times more money.
The audience is large. About 640 million people watched esports in 2025, and mobile games account for more than half of that viewership.
Where the Money Comes From
Sponsorship
Sponsorship is the backbone of esports business. Brands pay to put their names on teams, jerseys, tournaments and broadcasts because esports reaches young viewers who are hard to reach through TV. Total esports sponsorship was about $1.2 billion in 2025, or roughly 42% of revenue once betting is left out. Gaming hardware makers, energy drinks, banks, car companies and fast-food chains are among the most common sponsors.
Media Rights
Leagues and tournament organizers earn money by selling the rights to stream their events on platforms like Twitch, YouTube and regional services. Media rights are smaller than sponsorships in esports than in traditional sports, partly because most esports broadcasts are free to watch.
Game Publisher Funding
Unlike the NFL or NBA, every esports game is owned by a company, and those publishers often pay for much of the prize money. They usually do it through in-game purchases tied to the event:
- Riot Games has sent 25% of sales from special Worlds items to the League of Legends World Championship prize pool since 2016.
- Valve funded The International’s Dota 2 prize pools mostly through fan purchases, sending 25% of sales to the pool. That model helped push the pool past $40 million in 2021 before shrinking sharply.
- For the 2026 Rocket League World Championship, Epic Games sent 100% of net sales from a special in-game bundle to the prize pool.
Tickets and Merchandise
Big events like League of Legends Worlds can fill NBA-sized arenas, and fans buy team jerseys and gear. But for most teams, merchandise and tickets are a small part of revenue compared with sponsorships.
Government and Investor Money
From about 2018 to 2021, venture capital investors poured money into esports teams, expecting them to grow like traditional sports franchises. Today, the biggest new money comes from Saudi Arabia (see below).
Where the Money Goes
Most esports spending goes to three places. Player salaries are the biggest cost for teams, especially in leagues like League of Legends and Counter-Strike, where star players can earn six- or seven-figure salaries. Prize pools reward winning teams and players. And production costs, such as arenas, broadcast crews, casters and travel, make big events very expensive to run.
Are Esports Teams Profitable?
Most esports teams are not profitable. They typically spend more on player salaries, staff, travel and content than they earn from sponsors, prize money and merchandise. But in 2025 and 2026, a few organizations showed that profit is possible, usually by building big businesses around merchandise, fans and live events rather than relying on esports alone.
Why Most Esports Teams Lose Money
The industry calls it the “esports winter.” Starting around 2022, many teams and companies cut staff or shut down as investor money dried up and sponsors spent less. Counter Logic Gaming merged into NRG in 2023 (its brand was retired), The Guard closed, and teams like 100 Thieves and Evil Geniuses had several rounds of layoffs. In October 2026, Evil Geniuses, the 2023 Valorant world champion, announced it would shut down completely on November 2, 2026, citing weak sponsorship and the rising cost of competing.
The core problem is that most teams spend far more than they earn. A former CEO of Evil Geniuses told Decrypt that even as one of the biggest names in esports, his organization’s revenue was “close to zero.” A Deloitte survey cited in the same report found that only about 10% of esports fans had spent money on esports.
The Overwatch League is the clearest example. Its first 12 teams each paid a $20 million franchise fee, expecting a league like the NFL. Instead, viewership fell, and in 2023 Activision Blizzard shut the league down, paying each of the 20 teams $6 million to leave, far less than many had invested.
Even popular teams still struggle. Sentinels, which calls itself North America’s most popular esports team, reported $6.44 million in revenue for 2025 but a net loss of $4.28 million, with only about $209,000 in cash at year’s end.
The Teams and Companies That Turned a Profit
A few success stories show what it takes:
| Organization | 2025 Result | What Drove It |
|---|---|---|
| T1 (South Korea) | First-ever operating profit | Merchandise, sponsorships, global fans |
| BLAST (tournament organizer) | First annual net profit after years of losses | Running major events |
| Sentinels (North America) | Net loss of $4.28 million | Revenue up, but costs still higher |
T1 is the biggest milestone. The six-time League of Legends world champion reported ₩88.64 billion in 2025 revenue (about $60 million), up about 81% from the year before, and its first operating profit since the company was founded: ₩2.51 billion, or roughly $1.7 million. The key was merchandise. Jerseys and branded products, powered by star player Faker’s global fame, made up most of the growth.
Tournament organizer BLAST also reported its first annual net profit in 2025 after several years of losses. The lesson: the organizations making money tend to sell something beyond the game itself, like products, live events or content.
Is Esports Profitable for Game Publishers?
Not yet, but it’s getting close. For years, Riot Games said League of Legends esports lost money and was worth it mainly as marketing for the game. In July 2026, Riot’s head of publishing and esports, John Needham, said the company’s esports business was “super close” to breaking even and becoming self-sustaining within Riot. Publishers still treat esports partly as marketing: a big competitive scene keeps players engaged with the game, and in-game purchases are where most of the money is made. That’s why publishers fund prize pools and leagues even when the events themselves don’t turn a profit.
Teams that survive tend to rely on more than esports alone, building businesses in content, apparel and streaming, or securing better revenue-sharing deals with game publishers.
FAQ
How big is the esports industry?
Most estimates put core esports revenue at roughly $2.5 billion to $3 billion a year. Some figures top $5 billion, but those include betting. About 640 million people watched esports in 2025.
What is the biggest source of esports revenue?
Sponsorship is the biggest source, worth about $1.1 billion to $1.2 billion in 2025. Brands sponsor teams, leagues and tournaments to reach young audiences.
Who pays for esports prize money?
Usually game publishers, sponsors and tournament organizers. Publishers often fund prize pools through in-game item sales, like Riot’s Worlds items and Valve’s The International passes. The Esports World Cup is funded largely by Saudi Arabia.
Is the esports industry still growing?
Yes, but more slowly and more carefully than during the hype years of 2018 to 2021. Audiences keep growing and flagship events like the Esports World Cup ($75 million in 2026) are setting prize pool records, while some older events have shrunk, like The International, which fell from over $40 million to about $3 million. Teams are now focusing more on becoming profitable.
Is esports profitable?
The esports industry brings in roughly $2.5 billion to $3 billion a year, but most teams are not profitable. They usually spend more on salaries, travel and operations than they earn. A few organizations, like T1 in 2025, have turned a profit by building big merchandise and fan businesses.
Which esports teams are profitable?
Very few teams report profits publicly. T1 posted its first-ever operating profit in 2025, driven by merchandise and sponsorships. Many other well-known teams, like Sentinels, still reported losses in 2025.
Sources
- GamesBeat: Newzoo Esports Revenue Estimate
- Decrypt: Inside the Esports Industry’s War for Survival
- The Jacob Wolf Report: Overwatch League Shutdown
- Bloomberg: Saudi Arabia Outlines Plans to Invest $38 Billion in E-Sports
- Inven Global: T1 Records ₩88.6 Billion in 2025 Revenue, Achieves First Operating Profit
- Esports.gg: Sentinels Reports Revenue Growth Amid Ongoing Losses in 2025
- Players: BLAST Reports First Annual Profit After Years of Losses
- Esports.net: Riot Has Almost Made League of Legends Esports Sustainable
