Esports teams make money through a mix of sponsorships, in-game digital item sales, content creation, merchandise, and tournament prize winnings. Sponsorships alone accounted for nearly 57% of U.S. esports revenue in 2024, making brand deals the single largest income source in the industry. But the full picture is more complex, and most teams are still working toward consistent profitability.
Sponsorships Drive the Majority of Revenue
Brand sponsorships are the financial backbone of professional esports. These deals range from logo placement on team jerseys and overlays during livestreams to full tournament naming rights and co-branded content campaigns. For sponsors, the appeal is access to a young, digitally native audience that’s hard to reach through traditional TV advertising. For teams, a single multi-year sponsorship deal can be worth more than all other revenue streams combined.
Sponsorship structures vary widely. Some are straightforward cash-for-visibility arrangements where a brand’s logo appears on a team’s jersey or social media. Others are deeper integrations: a gaming peripherals company might sponsor a team’s entire content studio, or an energy drink brand might fund a series of player vlogs. The most valuable deals tie the sponsor into interactive fan experiences, like branded in-stream polls or giveaways, because they generate measurable engagement metrics the sponsor can take back to their marketing department.
Teams with larger social media followings and higher average viewership numbers command significantly higher sponsorship rates. This is why organizations invest so heavily in building audiences beyond just competitive results. A team that wins tournaments but has low visibility online is worth less to sponsors than a team with millions of followers across platforms.
In-Game Digital Items and Revenue Sharing
Game publishers like Riot Games and Valve sell team-branded digital items directly inside their games: weapon skins, player stickers, character cosmetics, and battle pass content. A portion of every sale goes back to the esports teams featured in the items. Because these are digital goods with no manufacturing or shipping costs, the margins are high and the potential audience is global.
This revenue stream has become increasingly important. Riot Games’ VCT Capsule Collection, which lets Valorant players buy in-game items tied to professional teams, was a major factor in helping the organization Sentinels project profitability in 2025. Riot is currently the only major publisher offering a league-wide revenue share across a game’s entire ecosystem, meaning teams heavily invested in Valorant benefit from purchases made by fans of any team in the league, not just their own.
The catch is that publishers control these systems entirely. They decide what items get made, how revenue gets split, and when collections launch. Teams participating in games without publisher revenue-sharing programs have to find other ways to fill that gap.
Content Creation and Streaming
Esports organizations aren’t just competitive teams. They function as media companies. Players and signed content creators stream on platforms like Twitch and YouTube, generating income from advertising, platform subscriptions, affiliate links, and direct fan donations. Revenue scales with watch time and engagement, so teams push their players to stream regularly and build personal audiences.
Many organizations also sign influencers and content creators who never compete professionally but bring large followings. These creators produce entertainment content (challenge videos, vlogs, reaction content) under the team’s brand, expanding the organization’s total reach and making the whole operation more attractive to sponsors.
Subscription programs add another layer. Teams offer fans exclusive perks like custom emotes, behind-the-scenes footage, early access to merchandise drops, and direct interaction with players. These recurring payments are small individually but provide predictable monthly income, which is valuable in an industry where sponsorship deals and tournament results can fluctuate.
Merchandise Sales
Team-branded apparel, accessories, and collectibles represent a growing revenue stream, especially for organizations that have brought merchandising operations in-house. Sentinels, for example, projected over $1 million in merchandise sales in 2025, more than double the prior year’s total. The jump came partly from managing production and marketing internally rather than licensing the work to a third party, which gave the team better margins and more control over inventory.
Merchandise works best when fans feel a genuine connection to the brand. Limited-edition drops, player-specific designs, and collaborations with streetwear or lifestyle brands tend to outperform generic logo-on-a-shirt offerings. Digital collectibles, including NFTs and virtual event access, have also been tested as ways to sell to fans without the costs and logistics of physical goods.
Tournament Prize Money
Prize pools for major tournaments can reach millions of dollars, and winning a championship can produce a significant cash infusion. But prize money is one of the least reliable revenue streams for esports organizations. Only a handful of teams win major events in any given year, and the split between the organization and its players varies by contract. Some players keep the majority of their winnings, with the organization taking a smaller cut or none at all.
For most teams, prize money represents a relatively small share of total income. It matters more as a proof of competitive legitimacy, which in turn makes the team more attractive to sponsors and fans, than as a standalone business driver.
The Profitability Challenge
Despite all these revenue streams, most esports organizations have historically operated at a loss. Sentinels reported $3.3 million in revenue in just the first half of 2024 but still posted a net loss of $8.2 million for the prior financial year. Player salaries, coaching staff, travel, content production, and operational overhead add up quickly. During the peak hype years, many teams were propped up by venture capital investment rather than sustainable revenue, leading to what the industry calls the “esports winter” when that funding dried up.
The path to profitability for most teams now runs through diversification. Organizations that rely on a single game or a single revenue stream are the most vulnerable. The teams in the strongest financial position tend to combine publisher revenue sharing, multiple sponsorship deals, active content operations, and growing merchandise businesses. Even then, profitability is a recent milestone for even top-tier organizations, not a given.