culture

This List of Most Valuable Esports Companies Is Proof the Industry Is Blowing Up

No wonder Drake is now investing in competitive gaming

esports spitfire fusion mobile 0
Team London Spitfire, which is owned by professional esports company Cloud9, won the Overwatch League Grand Finals this summer / Blizzard Entertainment

patrick baslar
October 31, 2018

How much do you think an esports team is worth?

 

Ask anyone the question and the answers are bound to be all over the place. My roommate said $2 million. My dad said half a billion. My brother ignored my text. The reason the answers are so chaotic is that the esports industry is changing more rapidly than your average observer can keep up with. A few years ago, $2 million would have been a good guess. In 2019, $500 million might be.

 

But one thing’s for sure: Forbes’s new list of the most valuable esports franchises is a testament to how rapidly the competitive gaming industry is growing—the numbers are already impressive, and only getting bigger.

 

Unlike traditional sports teams, these organizations usually aren’t focused on strictly one sport. All of the top five organizations have competitive teams spanning a myriad of games, including League of Legends, Overwatch, Fortnite, Counter-Strike: Global Offensive, Rainbow Six Siege, PlayerUnknown's Battlegrounds, Call of Duty and more. A diverse roster of games gives teams a better chance at success and caters to fans of different genres. The difference between watching League of Legends and Call of Duty is as distinct as watching football and basketball.

 

These teams aren’t just strictly sports operations either. Many of them operate in the spheres of merchandise and entertainment. 100 Thieves, the brand Drake and Scooter Braun recently invested in (and the 11th most valuable on the Forbes list), was started as a clothing brand by pro gamer Nadeshot. Since then, they’ve expanded into creating professional esports teams and Nadeshot said that the Drake/Braun investment will go toward the company’s apparel and content arms.

“As we think about making great content and making amazing apparel, we wanted to think about other investors who know that world really well and can help us level up really fast,” 100Thieves COO John Robinson said in a YouTube video on CEO Nadeshot's channel. “At the top of your list, and the top of my list, was Drake, and when we met Scooter and learned his background, and what he offers and how many connections he can help us make, it was a dream team right away.”

Despite the fact that these esports teams are still cash-flow negative—they’re spending far more money on building their teams than they’re making—we’re still seeing more money flood into the industry than ever before. According to Forbes, 2017 saw 74 deals worth a total of $1.52 billion. This year, that number has only increased: 63 deals worth $2.34 billion. To put it in perspective, if you go back a decade, 2008 had just a handful of deals totaling $34 million.

 

Of course, haters will always argue that no matter how much money esports teams are worth, it still can’t compare to the world of real sports. But this fascinating graphic from Cycle points out how rapidly that’s changing. This year, the top esports teams are worth more than the top Major League Soccer teams.

The MLS is hardly the biggest pro sports league, but it’s still a sports league with millions of fans and sold out games in major cities across North America. The fact that professional video game teams now compete on that level is astounding if you haven’t been paying attention—and still impressive if you have.

 

So with more investor money than ever before—plus the Drake seal of approval—what can we expect from esports in the near future? Just ask Andy Dihn, the CEO and founder of Team SoloMid, the second most valuable esports team.

 

“I want TSM to be a household brand; I want us to be the Dallas Cowboys and the Yankees,” he told Forbes. “It’s not enough for me just to be successful in North America.”

 

With the way things are going in the gaming world, that goal might not be so far off.