Today’s Newest Millionaires: Video Gamers

Created by Erika Rawes/Data source:

The chart above contains data from e-Sports Earnings. These are real people who have made real money by competing in video games — something most of us do in efforts to wind down. According to Game Informer, the prize money for gaming tournaments has increased dramatically over the past 10 years. In 2004, $20,000 was a big win for a player at a video game tournament. Today, gamers are looking at top prizes in the $10 million range. Unbelievable?

As one of the world’s favorite pastimes, U.S. consumers spent more than $20 billion on video games in 2012, according to the Entertainment Software Association. Nearly six out of 10 (58 percent) Americans play video games, and half of U.S. households own a dedicated gaming console.

Of course, it wasn’t always this way. Although there’s a great deal of contention over which title was actually the first video game, we can estimate the first real game was developed in the late 1950s. In the early 1960s, an MIT student named Steve Russell created Spacewar. The game allowed two players to compete against one another by firing photon torpedoes at each other’s spaceships, all the while trying to avoid being pulled by gravity.

About a decade later, an arcade system called Computer Space hit the scene, and shortly thereafter, the Magnavox Odyssey and Atari systems came out. Pong became somewhat of a hit, and the video game industry had made its way into American households.

Today, however, we can do so much more than play simulated table tennis or shoot torpedoes at each other. Video games these days are like movies — it’s almost as if we’re controlling live characters. Graphics are becoming more advanced, and we can communicate with each other from across town or around the world. There are games in so many different genres that there literally could be a game for everyone.

Source: Thinkstock

Making gaming into a career: time commitment

Most of the players who make millions gaming have transformed this hobby into a full-time gig. They practice around the clock to be the best. Good is not good enough and excellent is not quite there yet. You have to be better than the millions (or possibly billions) of other players who play your particular game.

Take the Halo franchise, for instance. In 2012, PC Mag reported: “Over the past eight years or thereabouts, gamers have run around killing each other in more than 20 billion games of Halo. Halo 3/ODST remains the most popular title for fraggin’, with more than 11.5 billion games played since September 9, 2004.” To be the best at Halo 3/ODST, imagine the time commitment it would take to outperform all of those players — or even most of them, for that matter.

Photo by Kevork Djansezian/Getty Images

Photo by Kevork Djansezian/Getty Images

Working your way up

To move up the ranks in competitive gaming, players generally start small. Players meet a team of other skilled players and then begin competing in small online tournaments. The Major League Gaming website is a great place for players to connect and compete.

Players also create videos on Twitter and Twitch, a platform designed specifically for gamers. Aspiring professional gamers work to gain a following within the gaming community.

Some gamers even work with coaches who train them and their team around the clock. With $10 million on the line, training is serious: It’s not just sitting around playing video games. Coaches help teams strategize, work together, find their strengths, and combat their weaknesses.

All in all, you may have fun along the way. But, if you intend on turning this hobby into a money-making endeavor, make sure you know the commitment involved.

Lionel Bonaventure/AFP/Getty Images

The ultimate prize

According to Game Informer, here are the top e-sports tournaments, listed in order by prize pool:

  1. The International 4: $10.9 million
  2. The International 3: approximately $2.89 million
  3. Season 3 World Championship: $2.05 million
  4. Season 2 World Championship: $1.97 million
  5. The International 2: $1.6 million
  6. The International 1: $1.6 million
  7. Call of Duty Championship 2014: $1 million (Call of Duty: Ghosts)
  8. Call of Duty Championship 2013: $1 million (Call of Duty: Black Ops 2)
  9. Call of Duty XP: $1 million (Call of Duty: Modern Warfare 3)
  10. CPL World Tour Finals 2005: $510,000 (Painkiller)

These are the types of tournaments pro gamers work toward. In addition to tournament prize money, top-rated gamers may receive sponsorship deals and they can even earn money from streaming their practice games on Twitch or Twitter. Although it’s rare to make this into a career, if you’re able to get there, you can make some serious cash.

More from Personal Finance Cheat Sheet: