Prize Pool
The term “prize pool” in esports commonly refers to the amount of money or any other tangible consideration received by the winner(s) of an esports competition. [1]While typically comprising cash prizes paid to the winner by the organiser of the competition, prize pools may also consist in non-monetary rewards such as hardware, gaming consoles, in-game currency, and even NFTs.
The prize pool serves undoubtedly as an important incentive for esports’ players, teams and clubs to compete at their highest level and showcase their talent to the public. In premier esports tournament, such as the FIFAe World Cup Series organised by FIFA and Electronic Arts, the prize pool often reach several millions of US Dollars, becoming therefore a primary revenue stream for professional players.
Before the starting of esports’ tournaments, competitors receive information regarding the size, structure, composition and conditions for prize pool allocation through the regulations governing their access and participation in the tournaments. These legal documents typically define both the amount of the prize pool (or the non-monetary rewards) and the criteria for its allocation.
It is common that such prize pool shall be allocated in accordance with the placement of the players in the final standings of a specific esports competitions, or depending on players’ ranking points. Winners will generally receive the higher amount but a variety of players might receive a portion of the prize pool: from the runner-up to the losing semi-, quarter-finalists and even lower ranked participants. The granting of the prizes is usually subject to the full compliance of the eSport player, coach, team and/or club with the regulations governing the relevant eSports competition. Any breach to the regulations by any of the individuals mentioned above may lead esports competition organiser to withhold or deny the prize pool to the same.
The prize pool shall be differentiated with the several types of expenses and costs that esports players attending esports competitions might have to bear, including without limitation, the travel and accommodation costs, visa charges and taxes, which can be, in certain instances, covered by esports competition organisers. The relevant esports competition’s regulations should address this topic in relevant sections.
The prize pool paid to the winners of an esports competition might also serve as the consideration for the use of their names, images, likeness and voice by esports competition organisers for editorial or promotional purposes. In certain instances, the prize pool is paid at the condition that players participate to promotional activities, such as video shoots or on-site marketing activations for the benefit of the eSports competition organiser.[2] While certain jurisdictions would require the payment of an additional and separate remuneration to undertake such promotional activities, it is quite common to find in eSports regulations that the prize money constitutes the remuneration for such grant of rights.[3]
Finally, in certain cases, players may lose their right to receive the prize money (in whole or in part) due to specific violations, by themselves, or by a member of their esport team, of the regulations governing the eSports competition. The most common violations opening the right for the esports competition organiser to retain the prize money include, without limitation, misconduct, cheating behaviour, violation to the anti-doping regulations, damage to equipment or gaming stations and other violations which should be accurately described in the relevant esports regulations.
[1] See for example W Ahmed, ‘Esports World Cup 2024: Full list of games, format, schedule and more’ (Esportsinsider, 12 July 2024) available at: <https://esportsinsider.com/2024/07/esports-world-cup-2024-games-format-schedule> accessed 25 September 2024.
[2] See C Gough, ‘eSports market – statistics & facts’ (Statista, 17 September 2024) available at: <https://www.statista.com/topics/3121/esports-market/#topicOverview> accessed 25 September 2024.
[3] D Coates and P Parshakov, ‘Team vs. Individual Tournaments: Evidence from Prize Structure in eSports’ (2016) DOI:10.2139/ssrn.2787819.
