How big is esports? Its a question that everyone wants the answer to, but Epic Games took a hit of $154 million in search for this answer.
Epic Games overestimated the revenue from esports in 2019 according to documents submitted in the game developer’s ongoing lawsuit against Apple. The developer’s esports revenues fell short by $154 million in 2019 according documents submitted in court.
Fortnite Esports – Not as lucrative as you’d think
The Fortnite World Cup 2019, a $30 million prize pool event took place at the Arthur Ashe Stadium in Flushing, New York. One hundred solo players and 50 duo teams took part in the event.
Epic Games grossly overestimated its revenues from esports the company revealed in documents filed with the United States District Court. Amongst other things, the documents reveal the revenue details for the Fortnite maker from 2018-19. Epic Games put up $100 million for esports in 2018 and the same number again in 2019. The documents reveal Epic Games made $4.2 billion in 2019 falling short of projected earnings of $4.59 billion.
The documents further reveal Epic Games fell short of its esports revenue targets by $154 million. The game developer had higher expectations from its esports division.
After pumping in $100 million for esports in 2019, Epic Games significantly reduced the overall prize money the next year. The combined prize pool for the entire year in 2020 was just $17 million a massive reduction from the previous years.
Epic Games has launched an antitrust lawsuit against Apple alleging anti-competitive policies on the ioS store.
What’s next for Fortnite esports in 2021?
Earlier this year, Epic Games announced the 2021 season will feature a $20 million prize pool. This amount is lower than the Fortnite World Cup prize pool, but should help the game developer in optimizing its revenue stream.
There will be four FNCS seasons in 2021, each with a $3 million prize pool. The distribution across all regions for the $3,000,000 prize pool depends on the most recent competitive participation and regional game population. Europe has the highest share of the prize pool with a $1,350,000 purse.
Epic Games will continuously monitor and evaluate data before each season to make adjustments to the prize distribution. The developer will also bring together the best players from each region for mid and end of year tournaments. These tournaments will feature an additional $8 million in prize money.
While this is still a significant amount of money, it is considerably lower than the $100 million in initial years. Epic Games is involved in an antitrust lawsuit that could pave the way for similar pending lawsuits by various governments.