How Esports Pros Can Manage Newfound Wealth

You’ve done it! You’re playing before thousands of fans and you’ve taken home the top prize in a global esports tournament—a $1 million sum, far larger than any paycheck you had ever imagined. But the thrill of success brings questions and decisions: How will you manage your winnings? Will you be able to repeat this success in the future? What will you do when your high-level gaming days are over?

Welcome to the life (and challenges) of a successful esports pro.

Today, competition and streaming through gaming platforms have created greater (and more lucrative) opportunities for professional gamers to compete in live tournaments or showcase 
their talents as hosts (or "streamers") for mass online audiences of paid subscribers and social media followers.

Competitive gamers can earn money in several ways, including tournament winnings, sponsorships and social media endorsements. Some even earn salaries as members of esports teams. Most pro gamers, however, don’t have guaranteed, multimillion-dollar annual contracts (or seven-figure signing bonuses) that other pro athletes fall back on. And in a grueling profession that demands exceptional motor skills, like hand-eye coordination, reflexes and field of vision, some gamers can lose their competitive edge by their mid- to-late 20s.

That is why it’s critical for esports professionals to make the most of their success.

Here are some curated financial tips from Morgan Stanley’s Global Sports and Entertainment Directors to help pro gamers maximize today’s gains while building financial security for tomorrow.  

Plan for Unpredictable Cash Flows

One key challenge for pro gamers is that earnings can vary wildly from month to month and year to year. Take for example a competitive gamer with a base contract of $100,000 per year. Additionally, they may also make hundreds of thousands of dollars (and potentially millions of dollars) in tournament winnings.

Earning that kind of money can be a heady experience, but tournament winnings aren’t a reliable source of recurring income, so it’s essential to set aside a portion of your earnings. A weekend windfall can help create a reserve of funds to weather periods of less regular earnings. This can help smooth out some of the lumpiness in esports income streams.

Think About Your Longer-Term Financial Goals

While professional gaming careers may be short, there are a variety of ways to start planning ahead during your career (rather than after). You can save for a down payment on a home, set aside funds for a future business venture or even sock away a portion of your annual earnings for retirement.

Short careers also call for financial prudence. Because you may need to allocate your peak earnings in the years to come, it’s often wise to resist the "urge to splurge" on splashier items—money that can be used to plan your next act.

Most pro gamers are young and typically find ways to extend their skills and leverage their star power. For example, many also stream their game play for an audience of fans willing to pay subscription fees. A streamer can also monetize that audience by signing sponsorship and endorsement deals (perhaps even equity for endorsement arrangements).

In this second act as an esports content creator, gamers can generate income that’s more stable than earnings from competitive game play. There are also many gamers who shift from playing 
to other roles within the sport: coaching teams, organizing tournaments or broadcasting, just to name a few.

Whether you want to pursue an entrepreneurial idea within esports or take your talents to another field, one of our specially designated Financial Advisors, known as Global Sports and Entertainment (GSE) Directors, can help you make the right choices and transition smoothly to a second career. GSE Directors have significant and extensive experience guiding sports and entertainment professionals through all phases of wealth planning.

Plan for Unpredictable Cash Flows

Gaining financial education is a strong starting point for gamers who want to plan for a future that’s more secure and open to possibilities. In addition to giving you greater flexibility with your career, this kind of knowledge can help you make smart and informed decisions at key intervals in your life.

With Morgan Stanley Global Sports & Entertainment, professional gamers can take advantage of financial education programs that cover topics like budgeting, saving, investing and even establishing financial boundaries and preparing for the unexpected.

Are you interested in learning more about how we can help? Connect today with a Global Sports and Entertainment Director near you and visit www.morganstanley.com/gse.