Part 11. Esports and Game Broadcasting — Watching Becomes a Payment Habit

Core question: Why did the people watching games come to outnumber those playing them?

Watching as a Payment Habit-Space

Human beings have long paid to watch other people compete.

The ancient Olympic Games, Roman gladiatorial contests, nineteenth-century boxing crowds, and twentieth-century broadcast rights for baseball, football, and basketball all share the same structure. “Doing” and “watching” become separate activities. Once spectators outnumber participants, watching itself becomes an independent payment habit-space.

That separation took time to emerge in games, which were intrinsically something people “did.” The seed was already present when spectators began lining up inside arcades—the scene discussed in Part 6. But two things were required before watching could grow into an independent economy: games sophisticated enough for competition to become spectacle, and infrastructure capable of broadcasting that competition.

South Korea was the first to possess both at once.

The StarCraft Proleague — The World's First Esports Spectator Economy

In 1998, StarCraft (Blizzard Entertainment) collided with South Korea's PC-bang culture. The cafés had StarCraft, they had people, and those people began watching one another play. As Part 8 noted, more than 4.5 million copies of StarCraft were sold in South Korea at the time.

In 2000, OnGameNet (OGN) launched as the world's first cable television channel devoted to games. It televised StarCraft matches, complete with commentators and arenas full of spectators.

The Korea e-Sports Association (KeSPA) was founded in 2000, and the StarCraft Proleague formally launched in 2003. Major corporations including SK Telecom, KT, STX, CJ, and Samsung established teams. Players became professionals, with salaries, team houses, and scheduled training.

The business model included:

Broadcast advertising: OGN, MBCGame, and other channels televised matches and generated ad revenue.
Team sponsorship: Major brands funded clubs such as SK Telecom T1 and KT Rolster.
Spectator tickets: Audiences paid to attend matches, initially in school gymnasiums and later in dedicated arenas.
Player image rights: Star players such as Lim Yo-hwan, Lee Yoon-yeol, and Lee Jae-dong appeared in commercials.

Lim Yo-hwan, known as the “Emperor of Terran,” achieved an extraordinary level of mainstream recognition for a game player. Fans waved light sticks in the arena. It was idol-fandom habit-space landing in esports.

Failure case: the match-fixing scandals (2010–2012)

In 2010, an investigation exposed match-fixing by StarCraft Proleague players. Brokers paid players to manipulate the outcomes of particular games. Eleven players received lifetime bans. Further match-fixing emerged in StarCraft II during 2015 and 2016, leading to additional expulsions.

In October 2016, the StarCraft Proleague ended after fourteen years. Damage to trust from match-fixing combined with declining numbers of teams and players, difficulty securing sponsors, and a migration of viewers to League of Legends. The scandals proved that for sports spectatorship to function as a payment habit-space, the authenticity of competition must be trusted.

League of Legends and the Global Esports Economy

After StarCraft, the center of global esports moved to League of Legends (Riot Games).

The first League of Legends World Championship, or Worlds, took place at Sweden's DreamHack event in 2011. The 2013 final was held at the Staples Center, home of the LA Lakers and LA Clippers. It drew roughly ten thousand spectators in person and about thirty-two million cumulative online viewers, with a peak concurrent audience of approximately 8.5 million.

Reversing the broadcast-rights structure: In traditional sports, broadcasters pay leagues for rights. Esports initially worked in reverse. Riot streamed Worlds for free on Twitch, YouTube, and elsewhere; at least in Riot's leagues, broadcasters or platforms did not pay for the rights. Streaming platforms sometimes offered incentives to attract a tournament. There have been exceptions, including the Overwatch League discussed later, for which a platform purchased exclusive rights. The audience itself produces advertising value.

Riot's model is that Worlds viewers download the game and begin playing, and some then buy skins. Esports spectatorship is a user-acquisition channel. Free tournament broadcasts are a marketing expense.

Revenue sharing from team skins: League of Legends sells skins bearing the names or logos of tournament teams, such as T1 and Gen.G skins. A percentage of sales goes to the corresponding team. Fans support their team financially by purchasing its skin. The habit-space of buying supporter merchandise is transplanted into the purchase of a digital skin.

The LCK franchise system (2021): League of Legends Champions Korea adopted franchising in 2021. Existing teams paid roughly $8.8 million, or ₩10 billion, for league slots, while new teams paid around $10.5 million, or ₩12 billion. Promotion and relegation gave way to stable participation rights. Teams could remain in the league regardless of results and make long-term investments. It was a transplant of the traditional sports-franchise model.

Dota 2's The International — When Fans Build the Prize Pool

Valve's Dota 2 conducted another experiment in esports business models.

The International is the Dota 2 world championship. First held in 2011, it has often offered the largest prize pool in esports.

Its funding source is unusual. Valve sells a tournament Battle Pass, directs 25 percent of its sales to the prize pool, and retains the rest as revenue. Fans build the pool directly by buying the pass.

The International 10 in 2021 offered a total prize pool of about $40.01 million, roughly ₩54 billion—one of the largest in esports history. Most of it came not from Valve but from fans' Battle Pass purchases.

The structure creates a particular feeling: “The more I spend on the Battle Pass, the larger the prize for the team I support.” Consumption connects with support, and payment becomes a form of fandom participation.

Failure Case: MLG's Attempt at Television

Major League Gaming (MLG) was founded in the United States in 2002 and organized tournaments focused on console games such as Halo and Call of Duty.

In 2006, MLG signed an agreement with USA Network and attempted a television broadcast—an experiment in showing esports to cable viewers.

The results were poor. Cable advertising audiences were unfamiliar with esports, while esports fans had already formed the habit of watching matches online. Television did not fit their payment habit-space.

MLG subsequently shifted its center toward internet streaming. Activision Blizzard acquired it in January 2016.

The failure shows that payment habits are determined not only by content, but by how that content is consumed. Esports viewers did not habitually sit passively before a television and wait for the schedule. Their habit-space was active internet streaming: searching for the match they wanted and participating in chat.

The Invention of Twitch — Turning Game Streaming into a Platform

Twitch became an independent platform in 2011 when the game-streaming section of Justin.tv was spun out. Amazon acquired it in 2014 for approximately $970 million.

Twitch's business model includes:

Subscriptions: $4.99 per month for Tier 1, $9.99 for Tier 2, and $24.99 for Tier 3. Subscribers receive ad-free viewing, exclusive emotes, chat badges, and other benefits. Roughly 50 percent of revenue goes to the streamer on partner channels.
Bits: Twitch's virtual currency. Users purchase Bits and send them to streamers, who receive approximately $1 per 100 Bits. The donation message is highlighted in chat.
Advertising: Part of the revenue from ads inserted into a stream is shared with the streamer.

The Twitch Partner and Affiliate programs allow channels meeting thresholds such as follower count and average concurrent viewers to monetize. An individual becomes a broadcasting station.

Ninja's platform move: At Fortnite's 2018–2019 peak, Ninja—Tyler Blevins—was Twitch's biggest streamer, with roughly fifteen million followers. In 2019, he moved to Microsoft's streaming platform Mixer, reportedly under a contract worth tens of millions of dollars. A substantial share of his followers did not follow him. The case showed that when a streamer changes platforms, viewers do not necessarily move as well.

Microsoft shut Mixer down in 2020, and Ninja returned to Twitch. The episode demonstrated that a platform's network effects—the tendency for more streamers and viewers to gather where many viewers already are—can be stronger than an individual streamer's brand.

AfreecaTV and Star Balloons — South Korea's Earlier Experiment

If Twitch globalized game streaming, South Korea's AfreecaTV had already created a personal-broadcast donation model.

AfreecaTV launched domestically in 2006. A BJ, or Broadcasting Jockey, hosted a personal broadcast, and viewers offered support.

Star Balloons are AfreecaTV's donation currency. One costs ₩100. Viewers buy balloons and give them to a BJ, who can convert them into cash at a rate of roughly 60 to 70 percent. When a balloon arrives, an effect appears on the screen and the BJ responds.

The payment motive is, “If I send a Star Balloon, the BJ will say my name.” It resembles throwing a bouquet at a concert and having the singer pick it up and greet you. Structurally, it is the same as VTuber Super Chat discussed in Part 10.

AfreecaTV experimented with Star Balloons years before Twitch introduced Bits. South Korea's game-streaming and personal-broadcast culture preceded the global model.

Esports Team Business Models — Transplanting the Sports-Team Model

Compare the traditional sports-team model with esports.

Traditional teams earn revenue from:

Ticket sales
Broadcast-rights distributions from the league
Sponsorships
Merchandise, including uniforms and memorabilia
Player transfer fees

Esports teams earn revenue from:

Tournament prize money
Sponsorships for uniforms, equipment, energy drinks, and more
Merchandise
Streaming revenue from players' personal broadcasts
Fan-community memberships
Player transfer fees

The difference is that broadcast-rights distributions, a central source of revenue in traditional sports, are absent or marginal in esports. Most esports broadcasts are free. Instead, the personal streaming income of affiliated players sometimes contributes to team revenue.

T1: An esports organization formed as a joint venture between SK Telecom and Comcast. The worldwide brand value of “Faker”—Lee Sang-hyeok, one of the world's greatest players—is a core asset. T1 merchandise, Faker-related content, and brand partnerships depend on his personal recognition.

FaZe Clan: The organization positioned itself as both a global esports team and a lifestyle brand. It listed on Nasdaq through a SPAC merger in 2022. The share price plunged afterward, and the team later experienced financial difficulty. The case showed how hard it is for an esports organization to grow into a listed company like a traditional sports team.

The Game-Streamer Economy — When an Individual Becomes a Network

Twitch, YouTube, AfreecaTV, Chzzk, and similar platforms created a structure in which individuals become content businesses.

A game streamer's revenue is diversified:

Platform subscriptions: Roughly 50 percent of Twitch subscription fees, as well as YouTube memberships
Donations: Star Balloons, Bits, and Super Chat
Sponsorships: Product support from game companies, hardware manufacturers, and energy-drink brands
Merchandise: Products bearing the streamer's personal brand
Tournament prize money: For professional streamers

The platform provides infrastructure and takes a percentage of revenue. The streamer creates content, and the viewer pays.

This differs from the established media industry. In traditional broadcasting, performers receive salaries from the broadcaster. In game streaming, streamers earn money directly from viewers, while the broadcaster—the platform—takes a fee. The relationship between producer and consumer becomes direct.

The payment habit-space has moved. “I support the creator I like” connects with idol fandom and the culture of tipping performers. The feeling “I am helping this streamer continue broadcasting” produces subscriptions and donations.

The Overwatch League — An Experiment in Transplanting the NFL Model

Blizzard Entertainment launched the Overwatch League (OWL) in 2018. It was the first large-scale attempt to apply traditional sports' city-based franchise system to esports.

Teams represented cities around the world, including Seoul Dynasty, Los Angeles Valiant, and New York Excelsior. Franchise slots cost roughly $20 million for early teams and around $30–60 million for later entrants. Owners participated as if investing in an NFL or NBA franchise.

Twitch signed a two-year exclusive broadcast-rights agreement worth $90 million for the first two seasons. The league then moved to YouTube from 2020 through 2022.

It did not grow as expected, and viewership declined from its initial level. One analysis held that city affiliation failed to create a natural identity among esports fans. Traditional sports fans support their local teams; esports fans more often follow players and team brands.

In 2023, Blizzard reorganized the Overwatch League into the Overwatch Champions Series (OWCS), moving from city-based franchises to regional tournaments. The franchise teams' investments were effectively treated as losses.

The Overwatch League showed that the assumption “transplanting a traditional sports business model into esports will work” can be wrong. Users in different payment habit-spaces require different structures.

YouTube Gaming Channels — Permanently Archived Esports Content

Twitch centers on live streaming; YouTube centers on permanent archives. Both serve the same esports viewing market, but their structures differ.

Twitch VODs are deleted after sixty days by default. YouTube videos remain indefinitely unless removed. Esports highlights, analysis, and clips accumulate and can be found through search.

That difference creates two content ecosystems. Twitch works around live FOMO: “If I do not watch now, it disappears.” YouTube works around library value: “I can find it whenever I want.” A Twitch subscription supports the streamer in the present; a YouTube channel membership is closer to belonging to the channel's archive and community.

YouTube gaming channels monetize through:

Advertising: CPM, or cost per one thousand impressions. Gaming CPM is generally lower than beauty or finance, at roughly $1–5. A large channel with tens of millions of monthly views can nevertheless generate meaningful revenue.
Channel memberships: Monthly subscriptions beginning around $4.99, offering badges, emotes, and members-only videos.
Super Chat and Super Stickers: Paid messages during livestreams.
Sponsorships: Ads for game companies and hardware brands inserted into videos.

Gaming-highlight channels have grown into independent businesses. Some channels editing and uploading esports clips have hundreds of thousands or millions of subscribers.

The Rise of Chinese Esports — A New Viewing Landscape

China's share of the historical audience for the League of Legends World Championship has grown substantially. During the 2020s, China accounted for a major share of cumulative viewing time for Worlds.

The leading Chinese esports-streaming platforms included Douyu and Huya, which discussed a merger in the early 2020s. Bilibili grew as an esports destination after securing rights to China's League of Legends Pro League, or LPL.

Chinese esports teams also began winning global tournaments. A succession of Chinese teams won the LoL World Championship—IG in 2018, FPX in 2019, and EDG in 2021—further expanding the country's viewing market.

The Chinese market has a distinctive structure. Chinese users play on domestic servers run by separate legal entities, apart from global servers. Esports broadcasts are also often carried separately on Chinese platforms.

Esports Sponsorship — The Business Model of Energy Drinks and Hardware

The leading sponsors of traditional sports have been automakers, airlines, and financial companies. Esports has a different cast.

Energy drinks: Red Bull, Monster Energy, and G Fuel are among the most active esports sponsors. The reason is clear: esports viewers, predominantly men aged eighteen to thirty-four, are a core consumer group for energy drinks. Logos appear at tournaments, on player uniforms, and in streaming banners.

Hardware: Gaming-gear brands including Intel for CPUs, AMD for CPUs and GPUs, Nvidia for GPUs, Logitech, SteelSeries, and HyperX sponsor tournaments. The brands of mice, headsets, and keyboards used in competition receive exposure. The perception “professional players use this equipment” leads to consumer purchases. It is the traditional sportswear model of building a brand through professional-athlete sponsorship.

Sponsorship meets the payment habit-space because esports viewers already spend money on hardware. “The mouse used by the player I support” affects a purchase decision; sponsorship formalizes that path.

During the COVID-19 pandemic in 2020, physical sports events stopped while viewership of esports and game streaming rose sharply. Twitch's monthly viewing hours surged from prepandemic levels. Game streaming emerged as substitute entertainment.

Generational Change in Korean Streaming — Chzzk and SOOP

In 2024, AfreecaTV rebranded as SOOP. Naver launched the game-streaming platform Chzzk in 2023. Major BJs began moving from AfreecaTV to Chzzk.

The structural reason for such movement is that changing platforms changes fees and revenue shares. A streamer's choice of platform is a central business decision that determines their income structure; whether viewers follow is the decisive question. As Ninja's failed move to Mixer showed, a streamer's migration does not guarantee audience migration.

Chzzk's initial strategy included recruiting popular AfreecaTV streamers, easy access through Naver accounts, and a low advertising frequency. It sought differentiation by connecting with Naver's search infrastructure to improve content discovery.

Competition among Korean streaming platforms is more than a platform battle. AfreecaTV's Star Balloon system and Chzzk's donation system use different fee structures. The platform on which a streamer receives more net income provides an economic basis for moving. For viewers, the share of their donation that actually reaches the streamer can affect the decision to contribute. Transparency in donation culture becomes an element of platform competition.

Hints from This Chapter — Checkpoints for New-Content Planners

Checkpoint 1: Can my content become something people “watch”?

The StarCraft Proleague and League of Legends Worlds showed that there are moments when viewers outnumber players. Can the “people doing” and the “people watching” separate within your content? Can watching create a payment motive? If spectatorship becomes an experience in itself, users who never participate directly can still become customers.

Checkpoint 2: The motive for donations and subscriptions is relationship, not content value

Star Balloons, Bits, and Super Chat share one thing: users are not paying the price of content; they are participating in a relationship with its creator. “The BJ said my name” and “the streamer read my comment” become reasons to pay. Designing the unit price of content is different from designing a structure for participation in a relationship.

Checkpoint 3: Can you sell the middle ground between watching and participating?

The International's Battle Pass lets spectators contribute to the prize pool and feel involved in the success of the team they support. They do not play the match or cheer in person, yet payment makes them “participants.” Does your content have a middle ground where spectators become participants?

Checkpoint 4: A platform's network effects may be stronger than a personal brand

Ninja's failed move to Mixer showed that viewers did not follow the streamer to another platform. Their existing community and friends remained on Twitch. You must understand how dependent your content is on a platform. You also need a separate design for ensuring users can follow if the platform disappears or changes.

The next chapter moves to the final chapter of the game industry. It concludes Volume 1 by reviewing what games have taught us about payment habits and identifying the patterns by which those habits transfer before we move into the music industry.

Kim Dongeun WhtDrgon@MEJE.kr 2026