Esports scene around the world is growing day by day, as Esports and video gaming industry is bigger than the Music and Movie industries combined.
As Esports games like League of Legends selling franchises for $10 million and Overwatch selling franchises for $20 million, many big names and companies have invested in Esports over the last few years.
Esports organizations are constantly buying and changing their roster for multiple games to get as much profit as possible. And after the franchising happed to Esports, TSM is the only profitable organization. The profit is based on the overall performance on every Esports scene not on a single game.
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Leena Xu, the president of TSM talked about TSM’s current state replying on her Instagram to a fan who compared TSM to 100Thieves.
She said, “Under my leadership, we’re rebuilding our league core with younger more long term players, BB, Kobbe, got bio back”. About investing in multiple games and players she also said, “Invested into Fortnite with myth, hamz, dae, added brand new games to our portfolio PUBG, Fortnite, Apex, R6, Rocket League. Added new business ventures, events, and influencers”. And finally, she said, “Btw TSM is the only profitable org.”
Many people might wonder how TSM is the most profitable organization despite failing to do well in LCS for the last two years. The answer is quite simple, while other big organization like Team Liquid and Cloud9 spends million on salaries to get their new team with no real monetization strategies and sold out to VCs, TSM played it very slow. TSM didn’t take nearly as much money as Team Liquid and C9, while having the same name recognition. But Liquid and C9 wanted to invest in other games but those games were not big enough to make a profit out of it. But, in TL’s defense, the VC cash made it possible for them to get better players and establish a kind of legacy around the team that it is a winning team.
On why other Esports organizations are not generating any profit, a Reddit user TopOfTheKey explained it as:
- A lot of them are still in debt — selling was their means to cover the debt of the organization and even though they may now have a larger resource pool, some can use it to their financial advantage to still have debt.
- Esports organizations still overvalued talent with their contracts and haven’t been able to have a correction on player’s salaries.
- A lot of organizations made bets on streaming revenue but, upon personal viewing on esports revenue, they were told a lot of bullshit and it has to lead organizations having to seek other mediums for revenue. Basically, streaming revenue isn’t as valuable because of how the pie is attempting to be split.
- Most organizations are doing a lot better when it comes to financials. With branching out in more old school methods — merchandising being a huge one now — it helps.
- Just putting it bluntly, most of the advertising deals being completed are leaving a lot of money on the table for esports organizations.
According to a Forbes article, Cloud9 was the most valuable Esports team in 2018 with over $300million+ value while TSM was $250million on value. And many redditor argue that C9 lost their spot because of investing in the Overwatch league which caused them a minimum of $20million to get the team and they did not make any profit out of it.
Although Leena Xu didn’t clear how much profit TSM generated, she did say TSM is the only team in Esports that is generating profits.