I read Astralis’ prospectus so you don’t have to.

Allright I more like skimmed it, but still.

As many of you may know, Danish esports organisation Astralis, primarily known for its Counterstrike team, was (arguably)* the first esports team in the world to do an IPO, listing on a Danish stock exchange on December 9 of 2019.

*[EDIT: Canadian team Luminosity also has a claim to the title of first esports team to go public. Luminosity was acquired by Enthusiast Gaming, another Canadian company that subsequently went public in October, 2019. The difference is that Luminosity went public as part of a larger entity (Enthusiast also has a large content/advertising business) while Astralis represents the first time a team has gone public directly. Your mileage may vary on who should be considered first.]


Since the IPO the stock hasn’t been doing particularly great. The company went public at 8.95 Danish Krone (DKK) per share (equal to around $1.34 USD). The share price quickly fell by one third to a low of around 6.00 DKK per share a week later. It has since rebounded somewhat , and the company is currently trading at around 7.30 DKK per share, implying a value of 400million DKK/$60 million USD.

As part of the listing, the company had to file a 186-page prospectus giving some details on its financial situation. I had a look through this document, here’s a few things I found interesting:

The team is not profitable, not even close.

For the first 9 months of 2019, the team brought in roughly $4.3 million USD in revenue (all figures are converted to USD from this point on for ease of reading).

Its’ staffing costs (primarily player salaries) alone over that same period exceeded that, at $4.9 million USD. When you factor in all its expenses and depreciation of its assets, the team’s total costs over this period were $9.3 million USD, leaving them with an operating loss of almost $5 million USD over that 9 month period.

Numbers for the last year were not as bad, with the team losing *only* $900k USD on similar revenue numbers. The team hasn’t turned a profit at any time in its history.

The team doesn’t expect to grow through prize money

For the first 9 months of 2019, the team’s revenue broke down as follows:

Sponsorships: $2,175,000 USD (50%)

Prize Money: $1,710,000 USD (40%)

Merchandise: $495,000 USD (10%)

It’s notable that Astralis is not too big on prize money as long-term source of revenue growth, given that prize revenue is inconsistent, and the majority of it goes to the players anyway.  These two quotes from prospectus summarize their approach to the issue:

Prize money is potentially highly volatile as it depends on the performance of the individual team brand. Prize money won is generally offset 50-100% in costs as players have claims to prize money or performance bonuses. Astralis Group is projecting no growth in prize money revenue for the coming years.

With the introduction of structured league formats, like the LEC for League of Legends, the portion of overall revenue dedicated to prize money has been seen to go down. This is due to players and teams alike favouring stable revenue streams, like those deriving from league membership participation, over the potential volatility of prize money tied to performance. Astralis Group thus takes a conservative view of no prize money revenue growth in the next years.

The points above are more than reasonable, and this approach is probably a sensible one.

It’s worth noting here that Astralis is legitimately one of the best CS:GO teams in the world,  and as such probably has a better shot at earing prize money than most teams. The fact that prize money doesn’t really figure into its plans for growth moving forward says a lot about the importance (or lack thereof) of prize money in the esports ecosystem as a whole.

Sponsorships and league revenue sharing payments are the team’s future

So where does the team expect it’s revenue growth to come from? We’ve already covered prize money above. Merchandising revenue is also fairly limited at $500k USD in the first 9 months of 2019, and the team doesn’t expect it to grow like gangbusters anytime soon. Streaming and other more indirect sources of revenue are not even discussed in the prospectus.

With all of the above revenue sources crossed off, that basically leaves the team with two potential areas for growth: (1) sponsorships and (2) revenue sharing payments from participating in leagues. These two revenue streams, which basically boil down to advertising dollars (whether directly through sponsorships, or indirectly through league revenue share payments) are what the team is counting on for future.

The team estimates that in 2020 sponsorship revenue will double, accounting for 70% of its non-prize-money revenue. Revenue sharing payments, through the team’s participation in leagues like the LCS,  are expected to make up the majority of the team’s remaining non-prize-money revenue. The team (maybe optimistically) expects these payments to increase by 40%-100% in the coming year as leagues bring in more money from advertisers and media rights.


The team is losing money, and will probably continue to do so for the foreseeable future, until the cavalry, in the form of advertising dollars, comes to the rescue in sufficient numbers to turn the team into a healthy, profitable enterprise.

Unless, of course, it runs out of money first.

The team’s situation probably more or less mirrors the entire esports industry at this point (publishers excluded). The bet that investors in Astralis (and most likely a lot of other organisations) are being asked to make is that the particular organisation they’re investing in has the resources necessary to survive until the cavalry finally gets here. Whether Astralis will make it or not remains to be seen, put it’s probably a pretty good bet that, in the industry as a whole, not all the current major orgs will live long enough to hear the sound of the trumpets.

Data (Australis financials for the past 3 years):

Marius Adomnica | The Patch Notes

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