Last week brought confirmation that the second edition of the Esports World Cup will inject over $90m (€79m) into the competitive gaming ecosystem across prize money and stimulus funds, underlining the industry’s growing reliance on Saudi Arabian investment.
The 2025 Esports World Cup will feature a $70m prize pool and a separate stimulus fund of over $20m reserved for 40 of the world’s top esports teams — the latter being loaded with incentives for teams to promote the tournament.
The six-week EWC is by far the most lucrative competition in global esports and is, at least for now, bankrolled by its owner: Saudi Arabia’s Public Investment Fund.
The PIF is arguably now the most influential entity in esports, operating the Esports World Cup and owning Savvy Games Group, the ever-expanding parent company of some esports’ biggest tournament organisers including ESL and FaceIt.
The Esports World Cup itself is hosted in Riyadh and ESL remains a top-tier tournament organiser across multiple esports. As such, the esports world increasingly pivots around PIF money.
For players, the Esports World Cup provides an opportunity to earn life-changing sums of money. Players are the primary beneficiaries of the $70m prize pool as esports industry norms dictate that players, not teams, earn the lion’s share of prize money won at various tournaments in addition to their agreed salaries.
This quirk of the esports industry, among many, means that teams are by far the least financially stable element of the esports ecosystem.
Teams rely on sponsorship revenue and venture capital investments to stay afloat and with the latter drying up in what many describe as ‘esports winter’, the $20m fund – known as the Esports World Cup Foundation (EWCF) Club Partner Program – is the kind of opportunity that can keep teams in business.
No free lunches
Ralf Reichert, chief executive of the EWCF, is an esports veteran that co-founded esports team SK Gaming in the 1990s and tournament organiser ESL in the 2000s. He has seen enough of the esports industry to know that teams grasp almost any opportunity to earn additional revenue.
“The clubs are an important pillar of esports and if you think about the last few years, the pillar that had the most unstable business model of all these parts of the ecosystem,” Reichert says.
“There is certainly something lacking when compared with traditional sports – esports clubs don’t have their own stadium and the media rights revenue that gets shared in esports is still much, much smaller than traditional sports. They were certainly lacking some sort of stability and there is a need for that stability.”
The Club Partner Program’s $20m fund, spread across 40 teams, is a big deal for some of the smaller organisations selected for 2025. Clubs can earn a maximum of $1m from the fund in 2025, distributed according to criteria that Reichert describes as “not exactly scientific” due to the high degrees of variance between each team’s size, location and fanbase.
In any case, each team’s ability to effectively tell stories around the Esports World Cup will be judged first and foremost.
“When you consider strict KPIs – would it be right to go by Instagram followers and engagement? Rednote engagement? It’s not an apples to apples comparison. We tried to take all of this into account,” Reichert says.
In practice, the Club Partner Program is a decentralised marketing budget for the Esports World Cup, using the reach of the 40 selected teams to impress upon fans that this is the new, undisputed pinnacle of competitive gaming.
Reichert isn’t lying when he says the fund is aimed at “growing the industry”. Simultaneously, there is also no such thing as a free lunch.
“The partner programme is all about growing new talent, telling stories around your talent and, ultimately, how engaged they are regarding the promotion of the Esports World Cup – ultimately, it’s a program tied to that competition.”
Balancing act
While not completely altruistic, there is a much more egalitarian approach for this year’s Club Partner Program compared to last year’s attempt. Then, the program was specifically targeted at retrofitting the EWC’s format – a multi-discipline competition in which teams compete for points across several different esports.
Some of the world’s biggest and most recognisable esports teams were focused on as few as one or two esports, in some cases. The Club Partner Program was therefore launched as a way of funding roster acquisitions for those teams – big teams acquiring small teams to fill out a multi-disciplinary organisation fit to compete at the World Cup. It was a top-down, top-heavy approach that Reichert wanted to fix for 2025.
“We changed that for 2025 so the program is much more built around marketing, content creation and value creation; to not push that envelope too far and ensure that this direction of travel didn’t grow into something we didn’t want,” Reichert explains.
“As important as these 40 clubs are, there are 1000s of non-partnered clubs that form the backbone of esports. As much as we want to make sure we grow the top half, we want to make sure that it’s not at the cost of the next generation of clubs. To solve this puzzle, we moved on from year one where we needed to be aggressive to enable the Esports World Cup to happen. Now, in year two, we are aiming for a more sustainable model.”
The EWCF is keen for its Club Partner Program to be as international as possible and is now focused on that first and foremost. In contrast to the payout criteria, Reichert describes how the 40 teams were selected as “very math-based”, albeit with strict regional quotas.
“Esports has often been seen through two different lenses: a western lens and an eastern lens. North America, Latin America and Europe on one hand; Southeast Asia and China on the other – separated in terms of games, audiences, platforms. We wanted to make sure this program was for everyone’s benefit.”
As such, the 2025 class includes smaller teams from countries and regions that in the past would have fallen through the cracks – teams from India, Latin America, Oceania, and organisations focused on mobile esports rather than traditional video games played on desktop PCs and consoles.
Governing body?
The 2025 Program is taking a much longer-term view to the global growth of esports. In many ways, the EWCF’s commitment to grow the esports industry – for the benefit of everyone, including the PIF – is not too dissimilar to how a governing body might approach the problem.
Esports is famously ungoverned and largely ungovernable. Many have tried, many have failed. It has always followed the money and still does, as evidenced by the industry’s near-complete pivot toward the Middle East. But the EWCF may be one of the first entities to take a longer-term view of how esports can grow sustainably, with the security of sovereign wealth funding making that possible.
Reichert pauses and ponders when asked if the EWCF is acting as a substitute governing body.
“That’s the most tricky question I’ve got in a while. First and foremost, I don’t think that we identify ourselves as a governing body. We identify as a foundation with a clear goal to grow the sport. An orchestrator, or custodian? I would be much more comfortable with these terms.”
He continues: “We can orchestrate esports, working together with the stakeholders to come together at one place, helping the clubs to grow and be sustainable, which ultimately leads to a growing industry.
I don’t think that the Foundation has either the power or the means to be a gatekeeper. If you look at a lot of the traditional sports model, a governing body is not always a blessing. We have an obligation we have to get this right, but we don’t have the ambition to be a gatekeeper.”
The elephant in the room
Governing bodies are rarely as controversial as the Esports World Cup and its associated foundation. It was five years ago that sponsorship deals struck by Neom, the Saudi future-city project, were deemed so toxic by esports teams and fans that games publisher Riot and tournament organiser Blast suspended their deals due to fan backlash.
Four years on, PIF, the EWC and its Foundation are now so essential to the esports industry’s survival – at least in its current form – that principled dissent has been moved to the back burner.
Some prominent broadcast talents in various esports disciplines refuse to work at the Esports World Cup for a variety of moral reasons – ranging from Saudi Arabia’s treatment of women, LGBTQ+ people or human beings more broadly.
But on the whole, there is now an acceptance – grudging or otherwise – that Saudi Arabian interests in esports are here to stay. Without it, the majority of teams, players and fans understand that esports would be contracting rather than expanding.
For clarity, SportBusiness did not ask Reichert about any non-esports topics — esports is where his professional responsibility begins and ends. However, Reichert says he feels independent in how he goes about his work, feeling pressure only to deliver top-tier esports competition and ensure its survival for years and decades to come.
In fact, he is more concerned about ensuring games publishers are on board with the EWC project rather than any political or royal figure.
“I’m very bullish on us being able to keep the sport mostly pure, maybe almost always pure. The publishers are actually a big help with that and it’s creating great competition. That’s what it’s about.
“And Saudi has very little power over this, right? It’s a balance between the publishers and what we’re doing. I’m not worried for the sport at all.”
