The Economics of Being a Chess Player

Before the 2020 chess boom, making a living as a chess player was not easy. The main means of earning money were playing the game, coaching, and selling books or chess-related products. As chess was not as popular as it is today, books or chess-related products did not have a big demand, so selling them wouldn’t represent a sustainable source of income for the vast majority of players. The same principle applies to coaching, as now more people want to learn chess, and as the demand for coaches grows, so does the price. The cost for a lesson depends on many factors, not only the demand, such as the rating of the teacher or the city they live in. On the Internet, IMs and GMs charge about $20-50 per hour, “stars” request more (up to $100 and even more). Coaching still is one of the main sources of income for all those players who are not strong enough to participate in the most paid tournaments.

This is because prize money for tournaments drastically decreases as the rating of the involved players goes down. The top closed events have a first prize of about $100,000 (played by 10-20 of the best players in the world), top open events normally have a first prize of about $20k (usually won by players over 2700, so only the first 30-40 in the world). A typical event won by a 2500-2600 GM (below the top 100) has a prize of below $5k. Furthermore, it’s important to notice that it’s very hard to consistently get a good result in every tournament played. However, many tournaments have appearance fees given to players regardless of their results.

Data: https://chessprizes.com/

As you can see from this chart, only a few of the best players in the world are able to make a living out of playing chess alone. Additionally, most of these players have travel expenses that cannot be overlooked. Considering that there are around 13 thousand titled professional chess players, the vast majority of them cannot rely on playing chess as their main source of income.

New opportunities

With the huge growth of chess starting in 2020, new earning opportunities appeared for chess players. The frenzy of Twitch put a spotlight on them, and now esports organizations and big corporate sponsors are signing chess professionals, both at the highest ratings and not. Ratings have become less important, what matters is the personality and entertaining ability of the streamer. This allowed many chess players who didn’t earn enough money from playing chess alone to have another significant source of income. Streaming has made it easier to make a living from chess, as these players receive great compensation both from Twitch itself and from esports organizations.

Data: https://twitch.pages.dev/

The esports team TSM signed Hikaru Nakamura, Counter Logic Gaming signed Woman Grandmaster Qiyu Zhou, (akaNemsko on Twitch), Cloud9 signed Grandmaster Andrew Tang, Noble signed Grandmaster James Canty, and Envy signed the streaming duo Alexandra and Andrea Botez, all players (apart from Nakamura) who don’t have a high enough rating to earn much in tournaments. Apart from esports, also big corporate sponsors signed chess players: Nakamura and Levy Rozman (GothamChess), signed deals with the sport-drink company G-Fuel, McDonald's sponsored an hourlong section of Nakamura's stream, The Botez sisters partnered with Paramount, Grandmaster Maurice Ashley starred in a Hennessey cognac commercial, and Chessbrah, a long-lasting chess channel on Twitch and YouTube, partnered with Fireball Whiskey.

Different examples of how players are taking advantage of the current chess boom are the entrepreneurial activities of Magnus Carlsen and Chessbrah. Carlsen co-founded the company Play Magnus Group and a mobile chess app (Play Magnus), where you can play against bots that represent Magnus playstyle at different ages. The company went public on the Oslo stock exchange Merkur division and is now trading at around $1.47. Chessbrah, a chess channel founded by GM Eric Hansen and GM Aman Hambleton, took advantage of the popularity obtained by creating and selling their clothing line.

Richest chess players

Although being a chess player is, on average, not very lucrative, some of them were able to earn a very big amount of money. Those who played several World Chess Championships, or the ones who have a strong online presence, as Nakamura has in Twitch, became millionaires, or even multi-millionaire. However, the estimated net worth of these individuals is, according to Nakamura, ridiculously wrong. He critiqued an article from MoneyInc.com, offering his guess (and a revised list) on the actual net worth of the 10 richest chess players. He states that although he’s sure that the article is wrong in most of the estimates, his guesses have a certain degree of uncertainty too.

*Anatoly Karpov, although not listed in MoneyInc’s list, has an estimated net worth of $5 mln dollars. Hikaru Nakamura, however, thinks he is possibly the richest player of all time.