For our esports fans - check
this out. $50M prize pool in 5 years time...? Follow the money.
Using just basic maths, you could easily run a very profitable epsorts comp here in Australia.
1) Let's say you had a headline prize of $1M to pull in the punters
2) You wouldn't have to do all that much advertising, as it would 'sell itself'. But lets assume another $1M in marketing inc pre-game tournament arrangements etc
3) Let's say the event itself (stadium hire, comms, security, catering, servers etc) costs you $2M
So your outlay is say $4M, let's round it up to $5M to be fair
Now. Revenue.
1) Sponsors + advertising - Let's say they chip in $1M (paying costs, or donating prizes or so on)
2) Merchandise - Event specific (lets say $100k) with a % of the sponsors sales ending up in your pocket too. Let's say $250k total.
3) Government funding - let's say they chip in $100k because they see value in what is happening
So we've covered $1.35M.
4) Tickets - Well. You need to try and work out who will attend. With some estimates saying 6/10 Australians play video games.. Let's chop that down from the lofty 13.2M, halve it to be realistic (so that's now around 6M), then drop that by 75% to take into account "I wouldn't buy a ticket to a live event" which leaves a Specific Addressable Market of say 1.5M people. Well. Let's say you get
just 10% of that total pool - 150,000 people. Ok. Well, that would pack out a stadium, so let's drop it to 100,000.
So far: $5M (costs) minus the $1.35M (revenue) = $3.65M
$3.65M divided by a potential 100,000 tickets = $36.50 per ticket.
Now, you want to make some money, and there's going to be tiered ticketing (inc VIP experiences etc) so let's bump the average ticket price up to $65 (which is what most people would pay for a mediocre music gig), and you have:
($65 - $36.50) * 100,000 =
$2.85M profit
For ONE event
Anyone want to start an esports company?
