Joachim Haraldsen, the founder and former CEO of Heroic Group recently shared key insights into esports monetization strategies. Haraldsen, who exited Heroic by selling his shares in 2023, emphasizes that despite popular belief, esports’ biggest financial opportunities lie far beyond the glamorous prize pools of tournaments.
Understanding Esports’ Real Revenue Drivers
Ask a casual fan how esports makes money, and you’ll likely hear about eye-watering prize pools. But according to Haraldsen, prize pools are just the surface. The true money-making potential lies elsewhere:
Media Rights
Streaming and broadcast agreements do drive revenue, but esports’ media rights deals are still nascent compared to traditional sports. There’s enormous room for growth here, especially as viewership numbers continue to surge worldwide.
Sponsorships & Partnerships
Brands pouring millions into team partnerships, league sponsorships, and event collaborations remain esports’ current financial backbone. Sponsorship deals are the single most reliable revenue stream for organizations today.
In-Game Items & Skins
This revenue stream might surprise outsiders, but Haraldsen highlights it as a massive driver. “When I led Heroic,” he states, “skins and in-game items were one of our biggest sources of revenue.” The example he gives is staggering: Heroic generated around $4 million from skins at the Paris Major alone, with a production cost of merely one to two hours from an in-house designer. Clearly, digital goods have incredible profit potential in esports.
️ Live Events & Co-Location Models
Physical venues and dedicated esports hubs represent another key revenue driver. Destination venues, training facilities, and arenas (such as Saudi Arabia’s ambitious Qiddiya) shape the future, offering an essential physical space for community engagement and growth.
But amid these known income streams, Haraldsen spotlights an area that’s still largely untapped: Direct Fan Monetization and Intellectual Property Development.
Direct Fan Monetization: Transforming Passive Viewers into Active Fans
Traditional sports franchises and entertainment companies have long excelled in direct monetization, using memberships, subscription models, and exclusive content. Esports, however, is still catching up.
Haraldsen points to Team Liquid’s innovative Liquid+ program as an exemplar. This platform rewards fans for engaging with the team—watching games, supporting sponsors, interacting on social media. Fans earn points redeemable for exclusive merchandise, experiences, and access, converting passive spectators into engaged, revenue-generating fans.
Such systems not only provide revenue but foster deeper emotional connections between teams and their communities, paving the way for long-term financial stability and fan loyalty.
Intellectual Property: Building Worlds, Not Just Teams
Haraldsen strongly believes esports organizations should be taking advantage of their intellectual property potential. Successful IP strategies transform organizations from mere competitors into content creators and cultural influencers.
He highlights several standout examples:
- Cloud9 x One Piece: A popular anime franchise collaboration, brilliantly merging fanbases and amplifying cultural impact.
- 100 Thieves: Expanding their brand far beyond gaming by collaborating with diverse entertainment properties.
- Crazy Raccoon (Japan): Innovatively developing anime-style avatars and narratives for players, influencers, and staff—crafting a unique identity that deeply resonates with audiences.
“From my experience at Heroic, I believe esports orgs need to own more of their storytelling,” Haraldsen asserts. Creating original narratives, content series, entertainment shows, and game-related collaborations provide tangible value. This transforms brands into expansive ecosystems, deepening fan engagement and opening new monetization avenues.
Building a Sustainable Future
As esports continues its journey toward professionalization and broader acceptance, organizations must actively diversify their revenue channels. Prize pools alone are unsustainable; long-term success lies in innovating and investing in fan engagement and intellectual property.
Haraldsen’s perspective, informed by real-world experience leading Heroic Group, pinpoints these avenues as key strategies organizations should prioritize. “The future of esports revenue,” he concludes, “isn’t just in competing—it’s in building worlds around these teams.”
