Paper to be presented at DRUID19 Copenhagen Business School, Copenhagen, Denmark June 19-21, 2019 Esport Superstars Michael R. Ward University of Texas at Arlington (UTA) Economics
[email protected] Alexander S. Harmon University of Texas at Arlington Economics
[email protected] Abstract We analyze the careers of Esports professional players. The Esport industry has been able to monetize growing spectator demand to offer tournament prize money amounting to $113 million in 2017. A few hundred players, out of tens of thousands, earn enough to remain professional gamers exclusively. We examine three aspects of professional Esport player careers. First, a ?superstar’ effect leads to increases in the top prizes drawing amateurs into the professional ranks. Next, while age and experience affect player performance, player ability remains difficult to assess. Finally, career exits reflect a quick resolution regarding the uncertainty in player ability. Preliminary - Please do not quote ESport Superstars I. Introduction Esports refers to competitive video gaming at the professional level. Esports emulates traditional sports with player endorsements and sponsorships, spectators packing into arenas for tournaments, lucrative broadcasting deals, and recruiting from the college ranks. What had started as friendly competition and socialization events just over two decades ago, currently has a 226 million viewer global audience generating $696 million in revenue that is expected to reach nearly $1.5 billion USD by 2020.1 Total prize money across all games played totaled $113 million in 2017, with top earner Kuro Takhasomi (aka KuroKy) grossing $2.44 million. However, payouts are heavily skewed with a median annual earnings of less than $1,000.2 The size and skewness in earnings suggest a market for superstar talent (Rosen, 1981).