The Rundown: How esports is capitalizing on its World-Cup-fueled summer heading into 2025

“We want to be the primary esports team in the world, but also the leading global entertainment industry in the world — so we built out of esports, and entered other verticals that were still related to esports, but they’re not esports,” said Ninjas in Pyjamas CEO Hicham Chahine. “There’s a wider play on 3.4 billion gamers, and not just 600 million esports fans.”

Now that the summer of competitive gaming has come to a close, here’s a breakdown of how the business of esports is shaping up going into 2025.

The key numbers

• This summer’s Esports World Cup, held in Riyadh, Saudi Arabia, between July 3 and August 25, smashed several industry records. It boasted the largest prize pool in esports history ($60 million) and generated 103 million hours of content watched, not counting Chinese viewers due to the difficulty of verifying figures provided by most Chinese platforms, in spite of the fact that it took place at the same time as the Paris 2024 Olympics (which enjoyed an average of 30.7 million viewers during its 17-day run).
• Although the aggregate viewership of the Esports World Cup was impressive overall, the event’s individual tournaments generally failed to break viewership records for their specific communities. The event’s “PlayerUnknown’s Battlegrounds” tournament, for example, was only the game’s third-most-watched event of the year, bringing in a peak of 105,000 viewers.
• As publishers adjust their ecosystems to include more revenue opportunities for esports teams, some teams are starting to feel more confident about the future. Sentinels CEO Rob Moore told Digiday that his team had exceeded its revenue figures for 2023 in the first half of 2024, bringing in revenues of over $3.3 million dollars between January and July of this year.

Centralization of esports creates a rising tide

The Esports World Cup represents one way in which the competitive gaming landscape has become simpler and more centralized over the past year. This summer, it became readily apparent that the publishers of just about all major esports are in the process of divesting from their owned-and-operated leagues, enlisting third-party operators such as Blast and ESL/FACEIT Group to manage their events instead. Esports organizations have welcomed this change, framing it as a natural evolution as the medium matures.

“In general, it’s always good to have tournament operators that you have an existing relationship with. It sounds simple, but anybody in events understands how much complexity there is, and how many human resources are required,” said Anne Banschbach, director of esports for the esports team Vitality. “The TOs [tournament operators] that have survived over the years have done so because they’ve learned from their mistakes, and they’ve grown in partnership with the teams, so there’s a mutual understanding.”

Not all leagues are built equally

As the esports industry becomes increasingly centralized, not all video game publishers are adjusting the structure of their esports leagues accordingly. Last year, Valve — which has long been seen as the most hands-off of the major esports publishers — announced a shift to a more open ecosystem, with the intent of creating a more level playing field for teams not involved in the leagues operated by third-party vendors. By and large, esports organizations are looking forward to these changes, but all eyes will be on Valve to manage the transformation deftly when the changes go into effect in 2025.

“In general, the ‘Counter-Strike’ ecosystem, together with [Chinese ‘League of Legends circuit] the LPL, are the ecosystems we are most optimistic about, because of the track record, the history, the success and how they have been built,” Chahine said.

Slow and steady wins the race

In spite of the esports industry’s record-breaking summer, most companies in the space still haven’t figured out how to turn a profit. One reason why Saudi Arabia is one of the few institutions still investing deeply into esports in 2024 is because of intangible benefits such as the potential for positive sentiment associated with gaming and esports. 

Even if Saudi Arabia’s esports investment takes years or even decades to generate serious revenue, the nation is willing to burn millions of dollars of cash to achieve its sportswashing goals. The private equity firms and venture capitalists who fueled the esports industry’s previous period of growth, however, are less likely to buy in for these reasons.

In 2024, most of the investors who are entering esports are doing so through the grassroots side of the industry, not the flashier esports orgs or publisher-operated leagues of yesteryear. Investors are still confident in the value of competitive gaming, but they finally understand that they are going to have to play the long game to take advantage of it.

“I think it actually is an encouragement that there is still investor interest to build esports infrastructure — to help this industry continue to grow sustainably,” said Josh Chapman, a managing partner at the venture firm Konvoy Ventures, which recently made its first esports investment, a $5 million stake in the esports infrastructure company Nerd Street.

“Relying on continued funding doesn’t always lead to value creation,” Chapman said. “But building a profitable, sustainable business is something that can be around for decades, and I think that’s something that the esports industry should be thrilled about right now.”