To foster the growth of e-sports worldwide, it is important for stakeholders and intending investors to have a clear understanding of the business aspect.
By Michael Akuchie
The gaming industry is a vast segmented scene comprising several playing grounds. These include mobile gaming, personal computer (PC) gaming, console or home video gaming, and e-sports. While players can compete against each other in all of the above segments, esports takes competitive gaming to an entirely different level. In e-sports, professional players play against each other either as a team or as individuals, depending on the competition’s rules. Some titles commonly played by professional gamers include Call of Duty: Mobile, Street Fighter, and League of Legends.
E-sports has existed since the 1960s, following the launch of the space combat video game, Spacewar. It is recognised as the first video game that had a tournament, thereby allowing players to face off against each other. In the 1990s, the advent of the Internet transformed the landscape of e-sports and carved a new path for the franchise. It was the period that game companies such as Nintendo and Sega Group Corporation pushed out two classic consoles, the Super Nintendo Entertainment System (SNES) and SEGA Mega Drive, which players used for competitions. PC gamers also witnessed an improvement as new titles such as StarCraft and Age of Empires joined the fray. The introduction of new consoles, new computers, and most importantly, new games in the 90s, contributed massively to the growth of competitive gaming. The 90s was a memorable period for esports because the first set of major tournaments were held at that time. E-sports stopped being a means of players facing off against one another for the thrill of it and started becoming a money-making endeavour.
From being just a means by which players can face off against one another for the thrill of it, it has grown into a multi-billion dollar franchise celebrating competitive gaming. Through sponsorship deals with companies, advertising rights sales, merchandise sales, and ticket sales, organisers of esports events have gotten the necessary funds to run events smoothly and increase the prize pool for players over the years. For context, a prize pool refers to the total amount to be given to players who emerge victorious in a tournament.
During the 2010s, the rise of streaming platforms like Twitch provided professional and amateur players with yet another viable means for showcasing their skills before a larger audience. It was also the period when e-sports sponsors increased by a wide margin. Today, Coca-Cola, Intel, Samsung, and MasterCard are recognised as some of the biggest sponsors in esports.
According to popular online data resource Statista, the esports industry was estimated to hit a revenue of $4.3 million in 2024. As the above figure indicates, this is a huge market that is unlikely to face a decline anytime soon. And while esports may have taken off in regions like North America, Europe, or even Asia, Africa still has a nascent market that could potentially surpass other regions if the right support and an enabling environment exist.
Much like in football competitions such as the UEFA Champions League where clubs compete, sponsorships, revenue streams such as ticket and merchandise sales, and advertising play a major role in determining how big the prize pool will be, and in turn, support the growth of the game, the same applies to e-sports.
Last year, in Singapore, an esports tournament called The Mobile Legends: Bang Bang Professional League Singapore (MPL SG) disclosed that two new sponsors, fast food giant, McDonald’s, and shampoo company, Head & Shoulders, had joined as sponsors. Similarly, the Saudi Esports Federation signed a three-year sponsorship deal with the global fast-food chain, Kentucky Fried Chicken (KFC), that would not only provide local players with more opportunities but would benefit female players via the country’s first all-female Saudi E-League. It is worth mentioning that beyond empowering competition hosts with the finances to organise matches, partnerships further strengthen the esports ecosystem and encourage more players and investors to join.
E-sports players make money through diverse ways, including salaries from the teams they play for, merchandise sales, and prize pools. All competitions have prize pools, so it should not be surprising that professional gamers can win prize money during competitions. The volume of the prize pool depends on the size of the competition, the type of game to be played, and the amount of money the organisers can secure from sponsorships and the other revenue streams mentioned earlier.
Some of the top esports competitions dedicate a large prize pool to the winning teams, making such events appear on the radar of every team. For example, the BLAST Premier League Finals, a competition dedicated to players of the first-person shooter title, Counter-Strike: Global Offensive, has a prize pool of $425,000. The winning team is entitled to $200,000 while the team in second place is awarded $85,000, and the team in third place goes home with $40,000.
Curious to get a sense of esports in Nigeria, particularly the economic side, I spoke with Oluwaseun Aladelo (Senez), the co-owner of the e-sports team, Rage Gaming, and community manager at mobile gaming publisher, Carry1st. Speaking on the current prize pool structure for esports in Nigeria, Aladelo disclosed that while prizes for esports competitions have increased over the years, he strongly believes that the division culture is not properly structured to favour players of every game title. “There are scenarios where single-player titles like EA FC and Street Fighter tend to receive a larger share of tournament prize pools, compared to titles like Call Of Duty: Mobile where you have 6-7 players on the team who will partake in sharing whatever that is allocated to CODM”, he explained. Essentially, entering as a single player for a Street Fighter competition guarantees you a higher payout than registering for a CODM competition with a team of up to 7 players.
This may not seem fair to CODM players, and unless corrected by organisers, may not allow esports in Nigeria to reach its peak. Aladelo believes that by allocating huge sums to competitions for games that involve teams, the above issue can be resolved. Since multiple players are involved, it only makes sense to increase the prize money for such titles. Carry 1st has started an initiative intended to ensure fairness for CODM players regarding prize distribution. The startup recently announced the Carry1st Africa Cup, a competition that has a prize pool of $15,000 for only CODM players.
E-sports has a rich history rooted in the ability of players to not only have fun in front of the screen but also make money. Beyond these advantages, some top-tier esports players are big-time celebrities with a huge number of followers much like basketball players, footballers, and rugby players. Some of these star players include Finnish gamer Jesse Vainikka, equally Finnish pro gamer Topson, and Estonian player Puppey. It is a vibrant industry that is on the path to becoming better and better for all involved. Africa is still in its early stages, and the slow development of esports in this part of the world can be traced to several factors including limited internet connectivity, poor electricity infrastructure, lack of public awareness, and high cost of dedicated gaming phones. These issues stand in the way of companies going ahead to sponsor esports competitions.
While e-sports organisers cannot resolve these perennial challenges, Aladelo suggests that focus can be channelled towards raising public awareness not just for sponsorships but also for the teams looking to compete. In tandem with his thoughts, spreading the word about esports, especially how lucrative is for all involved, should convince more sponsors to join the ecosystem. If properly nurtured, the esports industry can become a major employer of the continent’s talent, especially the youth. Since 70% of Sub-Saharan Africa’s population is made up of, supporting a youth-friendly project like esports is a step in the right direction.
Africa can become a major player in the esports arts scene. With the appropriate infrastructure in place, the continent can host major tournaments and produce many local talents who will go on to dominate across diverse titles. When asked to share his predictions for esports in Nigeria, Aladelo envisioned a gigantic ecosystem of competitive gamers backed by TV and radio sponsorships. The possibility of esports being televised on TV and broadcast on radio is not impossible. If stakeholders and the government can find common ground, esports will enjoy better coverage and exponential growth.
Michael Akuchie is a tech journalist with four years of experience covering cybersecurity, AI, automotive trends, and startups. He reads human-angle stories in his spare time. He’s on X (fka Twitter) as @Michael_Akuchie & michael_akuchie on Instagram.
Cover Photo: Acer Corner