I remember the days when I use to play FIFA 99, Golden eye on the N64 and Mortal Kombat with my friends, at the most we use to put in a £2 stake with the winner taking it all. Well things have dramatically changed since the late 90's as I was introduced to the world of Esports. I remember seeing the below video going viral in the early days of YouTube as it was branded 'one of the "most epic comebacks in Esports history".' I am not the biggest fan of fighting games but but I can appreciate what took place in the final round of this Street Fighter III tournament.
As the gaming industry has expanded over the years I began to look into the earnings and the opportunities it has brought to the mainstream players. According to Forbes the highest earning gamer of 2019 was Tyler Blevins who took home $17million, my winnings as a teenager when playing mini tournaments with my friends were miniscule compared to this. Esports have allowed players & gamers to enhance their personal brand and branch out to so many different arenas. You have live stream gaming platforms such as Twitch who have a Partner program - this helps gamers to monetise their brand by offering a subscription service, shared revenue from ads displayed on their channel and allowing viewers to virtually cheer for them by paying for "bits".
When I saw the earnings of these gamers I decided to look at the tax implications regarding their earnings. I saw a post on Instagram regarding Kyle Giersdorf the winner of a Fortnite tournament supposedly pocketing $3 million but having to pay approximately $1.5Million in US taxes. The post went onto mention that Kyle was not advised on being tax efficient, although this may be true I could not help to think he is only sixteen years old. I came across an article on guru gamer that stated he needed to pay both State and Federal Government tax hence the large tax bill.
The tax implications are not that straightforward as Esports is very much an international arena especially in times like this where a pandemic moved these tournaments online. It is important to note that it's not only the players that are taxed but also the gaming platforms. These tax implications include so many different aspects of gaming such as: foreign income from viewership, sales of in app features outside of the platform's home territory, sales of apparel outside of the platform's home territory, service fees received outside of the gaming platform's home territory (marketing, advertising & promotion). It looks like the US in particular will be coming down with an Iron fist when it comes to taxes. you can read more about this on Thomson Reuters.
I listened to a podcast which had a well known Esports competitor called Marcus 'Packz' Parker who gave further insight into how the world of Esports works. The first thing that surprised me is that some tournaments are not necessarily 1 vs 1 but they also include team games; some competitors even get paid to compete & attend events which can be lucrative. Esports players require a high level dedication, precision i.e analysing frame data, constantly second guessing your opponent's next movement and hours of practice (Marcus specialises in fighting games in particular). Marcus also mentions that COVID has been a gift and a curse for the Esports/gaming industry - national lockdowns have helped increase online content creation but on the other hand it has made online tournaments become difficult, the slightest bit of internet lag can be make or break when competing against other gamers.
Now not everyone is a die hard gamer or can dedicate the level of practice to be the best in the world but some still want to be involved in these events. I have a friend that is an all round gamer but no where near international level, he usually pre orders his favourite games, has late night online game sessions with friends and has attended many gaming exhibitions; so what did he do to be involved in Esports? He wrote to his local council to use a venue and hosted his own Esports tournament and as he is a graphic designer he was able to create online flyers to market his local tournament in London. Although it was on a smaller scale compared to the international stages it still allowed him to be actively involved in the Esports whilst still making some extra money for himself.
In conclusion Esports will continue to grow as its popularity increases, major corporate brands are sponsoring & backing these events such as Honda, Coca Cola and Mercedes; You can see Sportytell's list of top 10 Esports sponsors in 2021. If you click on the image below it will take you to the Esports guide which provides information on the latest tournaments, prize money and the specific game each tournament involves. There is so much content online that I cannot help to take more notice of the gaming industry.
Let me know what you think of Esports and what type of games you take an interest in. I am interested to see how many readers are interested in Esports and whether they have or will consider competing in the future. If there any readers that compete professionally please share your experiences as I would be interested to hear about this.
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