Videogame pros can earn lucrative prizes, but they must navigate unpredictable incomes and sometimes short careers—all the more need for a robust financial game plan.
You’ve done it. Playing before thousands of fans, you’ve clinched victory at the highest level of competition and taken home the top prize in a global tournament—a high six-figure sum far larger than any paycheck you ever imagined. You’re a lot wealthier today than you were yesterday. But how will you manage all of this money? Will you be able to repeat this success in the future? And what will you do when your playing days are over?
Welcome to the life of a successful eSports pro.
A global obsession with videogame-play has created growing opportunities for professional gamers to compete in live tournaments, or showcase their talents as “streamers” for an online audience of paid subscribers. The global livestream audience alone could exceed 728 million by the end of 2021, a 10% increase from 2020.1
Competitive gamers earn money in several ways. These can include tournament winnings and advertising sponsorships, as well as base salaries as a member of an eSports team. However, most pro gamers can’t rely on the kind of outsized steady income that a pro-baseball or -football player typically gets for signing a multiyear contract. And, in a profession that demands lightning-quick reflexes, many competitive video gamers lose their edge by their mid-20s.
That’s why it’s important for eSports pros to get the most out of their success as early as possible, while preparing for the next stage of life. Here are some financial-planning tips from our Global Sports & Entertainment team for pro gamers and their trusted advisors to consider.
It’s important for eSports pros to get the most out of their success as early as possible.
An eSports pro’s earnings may vary widely, month to month. A competitive gamer who makes a base salary of, say, $75,000 a year playing for a team might pick up anywhere from a few hundred-thousand dollars to a million or more for successful tournament play. Earning that kind of money can be a heady experience, but remember that tournament winnings aren’t a reliable source of recurring income, so it’s essential to set aside a portion of your earnings when times are good. A weekend windfall can help create a storehouse of funds to weather periods of less robust income. This can help smooth out some of the lumpiness in income streams.
A videogame career might last for no more than a decade, but that’s no excuse to put off setting long-term goals and planning for a more financially secure future. That can mean a variety of things, from saving for a down-payment on a home or a future business venture to socking away enough funds for a retirement that, for many gamers, is likely decades off. It might also mean resisting the urge to splurge on a fancy car or other luxury items that will draw down savings.
Remember that tournament winnings aren’t a reliable source of recurring income, so it’s essential to set aside a portion of your earnings when times are good.
Most pro gamers are fairly young and typically shift to a second career eventually. Many successful gamers on the competitive circuit may end up transitioning into streaming their game play for an audience of fans willing to pay subscription fees. A streamer can also monetize that audience with advertising sponsorships. In this “second act” as an eSports “content creator,” gamers can generate more stable income than during their stints in the rough-and-tumble world of competitive game play. Those who give up playing altogether might transition to coaching teams, organizing competitive tournaments or serving as live commentators for eSports events. Whether it’s an entrepreneurial pursuit in eSports or a salaried position in an unrelated profession, a Financial Advisor can help with the financial preparations to make smart choices about a second career.
Whether it’s an entrepreneurial pursuit in eSports or a salaried position in an unrelated profession, a Financial Advisor can help with the financial preparations to make smart choices about a second career.
Financial education is often the best starting point for a gamer who wants to plan for a more secure future. And knowledge can help prevent poor decisions down the road.
Morgan Stanley’s Global Sports & Entertainment team can help. Gamers can take advantage of our financial education program, which covers topics such as budgeting, spending, credit, debt, cash flow, establishing financial boundaries, preparing for the unexpected and dealing with sudden wealth. Additionally, gamers can team up with one of our advisors, known as Sports and Entertainment Directors, who have significant experience helping sports and entertainment professionals with all phases of wealth planning.
Interested in learning more about how we can help? Connect today with a Global Sports and Entertainment Director near you.