A1 Journal article (refereed)
Economics of Esports (2019)

Mangeloja, Esa (2019). Economics of Esports. Electronic Journal of Business Ethics and Organization Studies, 24 (2), 34-42. http://ejbo.jyu.fi/pdf/ejbo_vol24_no2_pages_34-42.pdf

JYU authors or editors

Publication details

All authors or editors: Mangeloja, Esa

Journal or series: Electronic Journal of Business Ethics and Organization Studies

eISSN: 1239-2685

Publication year: 2019

Volume: 24

Issue number: 2

Pages range: 34-42

Publisher: Jyväskylän yliopisto, Business and Organization Ethics Network (BON)

Place of Publication: Jyväskylä

Publication country: Finland

Publication language: English

Persistent website address: http://ejbo.jyu.fi/pdf/ejbo_vol24_no2_pages_34-42.pdf

Open Access: Publication published in an open access channel

Publication is parallel published (JYX): https://jyx.jyu.fi/handle/123456789/66616


In this paper, esports market development is exhibited and analyzed through various data sources and literature review. Additionally, economic concepts are applied to the esports environment. Demand characteristics of this emerging market are analyzed by applying the concept of competitive balance as commonly used in economics of sport scrutiny. The elite esports demand is proxied by gathering data on total prize money in the elite esports tournaments and explaining the esports demand by testing various factors measuring the competitive market properties. The most commonly used measurement in economics of sport for measuring withinseason competitive balance is calculated as the actual standard deviation of winning percentages to the hypothesized ideal standard deviation. Nevertheless, unique market properties of esports require novel methods and measurements. Therefore, alternative methods for measuring competitive environment properties in esports markets are developed and tested. Statistical moment methods enable the measuring of the distributional properties of prize money deviation. Distributional information is applied for constructing various index measures for testing the esports market competitive balance and that information is modeled in regression estimations for explaining the demand properties of elite esports markets. One of the main contributions of this paper is to underline the different characteristics of the esports market compared to the traditional sport environment. Finally, esports market UOH testing results are contrasted with research findings from traditional elite sports markets. It appears that esports market demand is better modelled by applying “superstar” models by Rosen (1981) and Adler (1985) than traditional within-season variation UOH models.

Keywords: electronic sports; professional sports; competition (activity); business models

Free keywords: sports economics; competitive balance; uncertainty of outcome hypothesis (UOH); superstars

Contributing organizations

Ministry reporting: Yes

Reporting Year: 2019

JUFO rating: 1

Last updated on 2020-18-08 at 13:17