Confetti rains down on the winners of the Call of Duty World League Championship at LA’s Pauley Pavilion in August. (Getty Images)
The competitive video game industry is here to stay
Nicolaj Jensen, a 23-year-old from Denmark, sits onstage. He is fixated on his monitor and the voices in his headset as he and his four Team Liquid teammates all deftly maneuver their mice and keyboards, eyes transfixed on their monitors. They sit in front of a massive LED screen before a boisterous crowd at the 4,353-capacity Verti Music Hall in Berlin, while opposing team members sit at their own rigs in front of another LED screen. Commentators’ voices are piped into the venue’s sound system alongside the game’s audio effects, but Jensen can’t pay attention to any of that. He has to remain laser-focused.
In a flash his opponent — Song “Rookie” Eui-jin, a 22-year-old from South Korea playing as Qiyana, the “Empress of the Elements” — is on top of him, freezing him in place with her water blade, then igniting him on fire. Jensen is panic-clicking now, trying desperately to hit the enemy with his own spells, but Qiyana retreats while he burns to death. Jensen heaves a great sigh and sinks into his high-back swivel chair while the crowd erupts into applause and screams. The millions watching live on the internet bombard the chat with comments, some crying out for their hero, others mercilessly trolling Jensen for getting outplayed in such a high-stakes moment. Jensen’s death would ultimately propel his opponent, China’s Invictus Gaming, to the quarterfinals of the League of Legends World Championship tournament, giving Incictus a chance to compete for the $1 million prize and to hoist the Summoner’s Cup in front of 20,000 fans at AccorHotels Arena in Paris on Nov. 10.
How Big is Esports?
For those still thinking video games are those boxes keeping their nephews from getting real jobs, check out these figures: Newzoo, a leading video game intelligence company, found that last year’s League of Legends championship had an average-minute-audience of 19.6 million, on par with the NBA Finals. Riot Games said last year’s full LoL World Championship tournament attracted a massive 99.6 million unique viewers across television and digital platforms. That game alone has approximately 860 professional players on more than 100 professional teams competing in 13 leagues globally. What’s more, Newzoo forecasts global esports revenue this year will hit $1.1 billion, up 27% over 2018.
“It’s important to note that according to our numbers, 78% of esports enthusiasts are 35 or younger,” said Newzoo’s head of esports, Remer Rietkerk. “That means this is an audience we can expect to continue to grow as younger people continue to age into the market.” And it’s a demographic marketers covet.
Louis Vuitton, State Farm, Mastercard, Alienware and Red Bull are all sponsors of League of Legends. LV is creating a one-of-a-kind “Trophy Travel Case” to hold the Summoner’s Cup, the trophy given to the winning team at the World Championship. State Farm branding is all over LCS (the North American League of Legends league) broadcasts, most prominently on the “State Farm Analyst Desk” that discusses matches before they take place and analyzes them afterward. Red Bull is the official energy drink of the game, and Alienware is the official PC and display hardware powering the North American and European leagues.
“I have attended the events, and the atmosphere and fandom is on par with anything,” Emily Neenan, Mastercard’s vice president of global consumer marketing and sponsorships, told GamesBeat after it announcement of its partnership with League of Legends. “That is one of the reasons why we are super excited. At Mastercard, this is a brand-new audience. There was no way we could deny this is where we need to be.” This is high praise considering Mastercard is also partnered with Major League Baseball, the PGA Tour, the Rugby World Cup and UEFA Champions League.
All of which means your venue, if it hasn’t already, needs to prepare now.
‘Passionate as any fans’
Venue industry execs like Todd Merry, chief marketing officer of Delaware North, noted that when the TD Garden, home of the NBA’s Boston Celtics and NHL’s Boston Bruins, hosted League of Legends’ Summer Finals in 2017, they were able to tap into a whole new audience. “Most local attendees had never been to the Garden before. … Here in Boston, how has an 18- to 21-year-old never been to the Garden? It was a chilling fact,” Merry said. “The other thing we (found was) the majority of the fans who came to that event over the two days came from outside the city. That is an audience that travels.”
Tucker Roberts, president of Spectacor Gaming and the Philadelphia Fusion Overwatch team, told VenuesNow “the classic misconception surrounding esports fans and gamers is that they are antisocial. But the opposite is true: Our fans love to hang out together not only virtually, but also physically.
“Esports fans show up hours before the event begins and are as passionate as any fans on the planet. Many of them have forged in-person friendships that may not have otherwise happened had we not created this space for them to celebrate these games and the best players in the world. That is what is so exciting as we look ahead to Fusion Arena.”
This Roberts says in reference to the $50 million esports arena being built for the team in Philadelphia, which promises to be the largest purpose-built esports arena in the Western Hemisphere. Other venues constructed for esports include HyperX Esports Arena in Las Vegas and Esports Stadium Arlington in Arlington, Texas.
This previously untapped audience of gamers continues to rapidly grow in both the digital and live spaces. According to Newzoo, the global esports market generated $865.1 million in revenue in 2018. In addition to the LoL World Championship selling out the 50,000-capacity Munhak Stadium in Incheon, South Korea; Defense Of The Ancients 2’s “The International” tournament brought 19,000 to Rogers Centre in Toronto, with a total prize pool over $25.5 million, and ESL One filled Cologne, Germany’s Lanxess Arena (18,000 capacity) to watch the best Counter-Strike: Global Offensive players in the world.
Rietkerk said there will continue to be demand for live esports at the arena, theater and studio levels. “Live events provide the ability to show the players on broadcast and create shoulder content (pre- and postcompetition programming), increase exposure for team sponsors, and add — with a small studio crowd — a more engaging ambiance on the broadcast,” Rietkerk said.
The three games generally recognized as the most established esports are LoL, DOTA 2 and CS:GO. Beyond that, the Overwatch League is developing a network of venues to host live competitions in 19 markets around the world, including in the U.S., Canada, China, South Korea, France and the U.K., during the league’s regular season in 2020. The Overwatch League’s Grand Finals this year sold out Wells Fargo Center in Philadelphia and saw the San Francisco Shock defeat the Vancouver Titans to claim the $1.1 million prize.
The Call of Duty League is set to launch in 2020 with 11 teams across 12 markets in North America and Europe. The teams in each league are independently financed and a slot in the league, known as the CWL, costs $25 million, according to ESPN.
Fortnite Battle Royale brought in an estimated $2.4 billion in revenue in 2018, according to SuperData Research, and developer Epic Games put on the first Fortnite World Cup at the Billie Jean King National Tennis Center in New York in February.
While many leagues have large-scale tournament events devoted to one game, ESL, which bills itself as the world’s largest cross-game esports company, organizes its annual tournaments with different tournaments for “undercard” games — like Rainbow Six, Clash of Clans, NBA 2K, or FIFA — leading up to a “headline” game.
“Our biggest core games are CS:GO and DOTA 2. These are the games that drive global esports, but we work with 100 other games,” Craig Levine, ESL’s global chief strategy officer, told VenuesNow. “We’ve got an entire competitive ecosystem.”
But not all titles have the same staying power or capacity to draw large audiences.
“All these games have different fans,” said Merry, who also sits on the board of esports franchise Dignitas. “People from the outside that don’t know about esports figure they’re are all the same. It’s like comparing golf to basketball to baseball. It’s different ages and demographics. CS:GO is not like LoL is not like Rocket League.”
John Needham, head of global esports for Riot Games, said that League of Legends has been successful because of fans and the community supporting it. “In addition to entertaining our fans with our sport, the majority of our viewers watch to learn and get better at playing the game itself,” he said. “The combination of exciting entertainment and education is a unique aspect of League of Legends professional play compared to other esports and traditional sports.”
Levine said when trying to identify a successful esport, “map balance, multiplayer, private lobby, and spectator tools are all ingredients that can give a game a chance, (but) it’s ultimately the fans/players that determine whether a game is going to be set apart.”
Rietkerk explained the importance of a few standard metrics for evaluating viewership: unique viewers metric as “how many people across a broadcast at any point heard about it and were interested enough to tune in”; peak concurrent viewers, “where you can gauge how many people are watching the most important moments in a season”; hours watched, “mostly used to understand total accumulated content consumption”; and average-minute-audience, “the easiest apples-to-apples comparison across events, where you know at any given moment how many people on average are tuning into the event.”
Many eyes will be on the Overwatch League in the coming year as it prepares to pioneer a regular season model that will host matches in various-size anchor venues around the world. Pete Vlastelica, CEO of Activision Blizzard Esports and commissioner of the Overwatch League, said he loves trying new things and surprising “the best fans in the world.”
“You’ll see our events in a variety of types of venues — some traditional sports venues, some theaters, and some music venues,” Vlastelica said. “The truth is we don’t yet know exactly what the ideal venue configuration is for our events, but it’s going to be a lot of fun figuring it out.”
Ready to host?
ESL’s arena events return to the same markets and venues annually — “Intel Extreme Masters Katowice is like the Wimbledon of esports,” Levine said. ESL produces tournaments around the world, including in Katowice, Poland, which Levine cites as a prime example of a city coming to tie esports into its identity.
And what does it take to attract a major esports event to your building? Needham says it all starts with location. “When planning our events, we look for cities and countries where we can engage with as many of our fans as possible and deliver an epic esports experience,” Needham said, adding that the next three World Championships after Europe this year will be in China in 2020 and North America in 2021.
In terms of specific venue requirements, Levine said: “We’ve found modern sports arenas are more suitable than old ones. Wider concourses seem to be more amenable. It’s hard to execute various brand activations and side-events when a concourse is split into two directions early on.
“High-speed internet and infrastructure is a prerequisite,” he added. “You have to build the stage with a lot of IT and then we have to add production — lights, fireworks, sound — on top of that.
“Whenever a venue has a savvy approach to the load-in process, it helps.”
Roberts said Comcast Spectacor’s first major esports event was the OWL finals at Wells Fargo Center in September, and it was a great learning experience.
“The stage, the massive LED board, the various fan engagement elements, and the competition itself relies on a staggering amount of tech,” Roberts said. “Once all of that comes together and the spectacle begins to unfold, the same basic principles determine success.”
What events look like
Merry said that when hosting an esports event, venues must be prepared for lots of in-and-out entry and ready to mix up their F&B.
“I grew up with traditional sports, I’ll have some peanuts, a hot dog and a beer (at the game). I’ve been habitualized for that. … This next generation of fans generally aren’t sports fans. It’s almost like we have to wipe the slate clean. We can’t just serve the same food we would serve to NHL fans,” Merry said. “Also, a full day of LOL, CS:GO or DOTA 2 can run 10 to 12 hours. We have to serve something different for breakfast, lunch, and dinner.”
Needham said the growth of esports has certainly not come without hiccups. “We experienced a lot of growing pains since the early days of League of Legends esports,” he said. “For example, during the quarterfinals of the 2012 World Championship at LA Live, there were multiple network outages on-site that disconnected from our game servers on stage. We spent several hours trying to restore connectivity before ultimately having to postpone the match.”
In addition to gaming content, many high-profile esports events are including other forms of live entertainment, akin to a halftime show, before high-profile events. Electronic dance music star Zedd performed at the beginning of the Overwatch League Grand Final at Wells Fargo Center. Hardwell played at Intel Extreme Masters in Katowice in 2017. League of Legends has featured bands like Imagine Dragons at its big-ticket events and has created augmented-reality performances with holographic versions of characters from the game.
The cross-pollination of gaming into other forms of entertainment is picking up momentum in other ways as well. After winning the Overwatch League championship, the SF Shock’s Jay “Sinatraa” Won and Matthew “Super” DeLisi (both age 19) appeared on “The Tonight Show Starring Jimmy Fallon.”
UTA has a division devoted just to video games and esports, and is working with league operators, game publishers and teams to build the profile of games’ stars. UTA esports agent Mike Lee told VenuesNow that it is the players and their fans who are fueling the rise of esports, and that much of his work is removing misconceptions about his clients.
“These young, focused and talented gamers are world-class competitors. They practice for over 60 hours a week and are the top 0.001% players in the world, just like leading athletes in traditional sports,” Lee said. “As esports continues to grow, we all need to continue to help remove the stigma that our clients are not true athletes and that they are just playing video games.”
In addition to competing on big stages, some players stream themselves playing games on platforms like Twitch, allowing thousands, sometimes tens of thousands, to watch them playing the game in real time and to chat with the streamer and fellow viewers.
Outside of arenas, video game tournaments are being held in theaters, recreation centers on university campuses, and dedicated spaces like Esports Arena venues in Las Vegas; Oakland, Calif.; and Orange County, Calif. Esports Arena is also developing spaces to host competitions in Walmart stores in Oklahoma, Colorado, Washington, California and Texas.
The term “esports” generally implies a substantial, international audience and developed infrastructure behind the game. Video game tournaments held at the local level could thus be compared to amateur sports, played among enthusiasts, sometimes for significant cash prizes and in front of large audiences, but without the attention brands like the NBA or NFL or FIFA could bring.
The big picture
The good news if you aren’t involved with any esports, or don’t have any plans to be, is that you are not too late. A common theme that came up among those interviewed is that all things esports are dynamic and happening very quickly, as it hasn’t been clearly defined how many games can survive in a developed esports market or how many different types of events there can be.
After spending a decade essentially just offering one game, Riot Games has announced it is releasing several more titles drawing from the 150 characters players have grown to love from League of Legends. There will also be comic books and an animated series.
While Riot appears to be coming for the crown, the kingpin of video games, and by default esports, would have to be Activision Blizzard, which publishes Call of Duty, Overwatch, Starcraft 2, World of Warcraft and Hearthstone. Of those, the Call of Duty League is set to launch in 2020 and the Overwatch League is having custom arenas built to house its events next year.
“We’ve seen an incredible evolution within the esports industry over the last 10 years and love the challenge of staying one step ahead,” Riot Games’ Needham said.
And don’t blink. As of August, according to the BBC there are serious talks going on about including esports as a demonstration at the 2024 Olympic Games in Paris.
Even with such explosive growth, esports doesn’t yet make up a huge percentage of most invested companies’ business, Merry said.
“If you’re brand new to the space, if you own a building, put aside those generalizations you might have of a nerdy group of mostly men. Put those aside and learn who these people are. Do that research,” Merry said.
“It’s a learning task for everyone.” he said. “Even the people who are deep in this are going to have to continue to learn about these audiences and how we can better serve them.”