The present invention is a system and method for conducting online video game tournaments involving a series of levels. The system comprises a tournament server connected to a communications network that is in electronic communication with remotely located players who register for the tournament. The server maintains a record of registered players competing in the tournament indicating at which level each player is eligible to play and, after players indicate they are ready to play a match, the server matches players who are ready to play at the same level. This matching may be repeated at regular intervals. After being matched, players play a match and the results are reported back to the server which may award prizes or allow players to unlock other levels based on the results. In general, a player who wins a pre-defined number of matches is a row wins a grand prize.