$25,000 per hour (and still underpaid)

To view this email in a browser, [click here](. INC. THIS MORNING $25,000 per hour (and still underpaid) Good morning, There are three kinds of people in the world right now. - Group No. 1 consists of the people who spent a combined 8.9 billion hours watching other people play video games on Twitch last year. - Group No. 2 is almost all of the rest of us. - Group No. 3, a much smaller group, [actually plays the video games]( that Group No. 1 watches--and is being paid very well for the privilege. The amounts of money involved are surprising: Top elite professional video gamers are making $25,000, $35,000, and even $50,000 per hour. That's not a typo. It's the hourly rate at the top of the market, [according to The Wall Street Journal](. The sheer number of followers means video game publishers--who compete in a wildly overcrowded $130 billion industry--have started flocking to top streamers and influencers whenever they release a new game. It's a no-brainer marketing strategy: Streamers lend an air of authenticity to the effort when demoing the game. One such streamer is Benjamin Lupo, who goes by the name DrLupo on Twitch. Lupo played the game Apex Legends for a few sponsored hours during its launch on February 4. "We have the power to convince people to buy a game they're on the fence about. They see us as more trustworthy than a name they don't recognize that wrote a review. They can see our faces. It's live interaction," he told the Journal. Lupo, 32, is a former systems engineer who lives in Omaha. He has a wife and a 3-year-old son plus "a mortgage and a lawn to mow," [as the Omaha World-Herald reported]( last year. Now, he's earning at least 10 times what he made at his old job at a local insurance company by playing video games full-time on Twitch. The vast majority of his income comes from subscription revenues, rather than sponsorships. [Influencer Marketing Hub estimates]( that DrLupo has roughly 28,000 subscribers, each paying at least $4.99 per month. Twitch, owned by Amazon takes a cut that can be as high as 50 percent. It's still a good deal for him. I think the math on these sponsorships also works pretty well for the video game companies. Take Apex Legends, which is free to download--Electronic Arts, its publisher, makes money from in-game microtransactions. - EA paid "more than a dozen" top streamers, according to the Journal, to play Apex Legends on its launch date. - Assume the top of the market, $50,000 an hour, plus 12 gamers and two hours each. You’re at $1.2 million. - Apex Legends wound up with one million downloads on its first day alone. - By the end of the month, 50 million people had downloaded the game. - According to SuperData Research, EA brought in $90 million in revenue during that first month, which means an average of $1.80 per user. I've done some digital marketing, and the idea of getting downloads at the rate of $1.80 per download at scale is off-the-charts positive. And when you realize that EA apparently turns a 50 percent profit on those gamers within the first month of downloads, on average, it becomes an insanely positive result. So if your first reaction was disbelief that people could make this kind of money playing video games online, try this second reaction on for size: They might actually be grossly underpaid. HERE'S WHAT ELSE I'M READING TODAY: A billionaire entrepreneur gave the commencement address at Morehouse College on Sunday, and [pledged to pay off the entire graduating class’s student loans](. --Inc. This investor learned a lot [while filling in as an interim CEO for four months](. (Her previous “operating experience” consisted of being a waitress.) --VentureBeat [Google just pulled Huawei’s Android license]( potentially crippling the Chinese company’s smartphone business outside China. --Reuters Millennials are “in [worse financial shape than every preceding living generation]( and may never recover,” new data shows. --The Wall Street Journal [Entrepreneurs are remaking Flint, Michigan]( with resilience, new funding, and Midwestern optimism. --Inc. Don't “perfume the pig” and other [lessons from RxBar's $600 million sale process](. --Inc. [Little Caesars is testing out an Impossible pizza.]( --CNN If you’ve never watched Game of Thrones, you win. Just say, “You’re right, it made no sense,” when your colleagues [complain about Sunday’s series finale](. --Deadline --Bill Murphy Jr. Contributing Editor, Inc.com Story ideas and feedback actively solicited. Find me at [billmurphyjr@inc.com](mailto:billmurphyjr@inc.com?subject=), or on [LinkedIn]( [Facebook]( and [Twitter](. [Click here]( to forward to a friend. This email was sent by: Mansueto Ventures 7 World Trade Center, 29th Floor New York, NY, 10007, [Unsubscribe]( • [Update Profile]( • [View in Browser]( • [Forward to a Friend](