If one needed any visual proof that we’ve come a long way from playing Super Mario Bros. on Nintendo with Cheeto-laden fingers and Jolt cola breath, look no further than a live eSports event like the Counter-Strike final which took place this summer at Wembley Arena in London and encompassed rabid fan enthusiasm, unmatched player skill, and a $250,000 USD cash prize for the winners.
It’s not just European fanaticism that is fanning the eSports flames either. This year’s semifinals and finals for the League of Legends world championship were held at New York’s Madison Square Garden and Los Angeles’ Staples Center where traditional sporting royalty has on been on display for decades.
While one might think these large venues are too massive for a video game tournament, they are regularly sold out; often just an hour after tickets are put on sale.
ESPN’s decision to begin covering eSports with their own dedicated subsite also indicates that from a media standpoint, gaming is being viewed on equal footing as baseball, basketball, football, soccer, and hockey and requires just as much discussion, second-guessing, and x’s and o’s chatter as the aforementioned time-honored pastimes.
“Fans will find the same level of quality content and journalism that users of ESPN.com have come to expect, including in-depth looks at the competitive gaming world and on-site reporting from the major tournaments,” said Chad Millman, editor-in-chief, ESPN.com and ESPN The Magazine.
Aditionally, ESPN The Magazine debuted its first-ever “eSports Issue” in May featuring profiles on gaming superstars including Faker, a behind-the-scenes look at MLG’s Dota 2 tournament, and a cover story on Seattle Seahawks running back Marshawn Lynch creating his own Call of Duty character.
This was quite the departure for the sports conglomerate given ESPN President, John Skipper’s, harsh assessment of eSports back in 2014.
“It’s not a sport — it’s a competition. Chess is a competition. Checkers is a competition,” said Skipper in remarks at the Code/Media Series: New York conference. “Mostly, I’m interested in doing real sports.”
Between 2014 and 2016, the number of people following eSports online and on TV jumped from 204 million to 292 million, according to eSports data tracker Newzoo. Revenue has kept pace – growing from $194 million USD to $463 million USD in the same period.
Pro gaming will generate upwards of a billion USD in revenue by 2019, according to the same research. This estimation is supported by statistics like 27 million people tuning in to watch the finals of the League of Legends world championship in 2014 – with an additional 16 billion minutes of live gaming streams per month on game streaming service, Twitch.
In turn, people are jockeying for position. Games giant Activision Blizzard – which owns franchises like Call of Duty and Warcraft – announced it was buying eSports outfit, Major League Gaming, in January for $46 million USD, while Activision says it has plans to launch a devoted cable TV channel.
Since there is already an established precedent that professional gaming is generating revenue, it should come as little surprise that many view it as an investment ripe with opportunity.
For celebrities, status used to be achieved through material purchases like lavish houses and cars that announce themselves from blocks away. For more savvy and seasoned people of means, money was invested in property, the stock market, and other business ventures.
However, for a handful of people, they’ve seen the power of eSports and pushed many of their chips into the center of the table in hopes of catching lighting in the bottle like Dana White and co. did with their investment in the UFC.
Here are the people you should know about who are banking on eSports taking off in a major way.
When: September 2016
EDM artist/DJ, Steve Aoki, announced at TwitchCon that he had become the majority owner of upstart video game team Rogue – who is relatively new to the eSports world having only formed in May. Regardless, their performance in Overwatch – in which they won the $100,000 USD grand prize in the first ever Overwatch Atlantic tournament and placed third in the Overwatch Open tournament – made them appealing despite their lack of seasoning.
“As many of my fans know, I’ve been a gamer all my life and have been getting more and more involved in eSports,” Aoki said. “I can finally take my love for gaming to the next level as an owner of Rogue, the professional eSports team. As an avid player of Overwatch, their dominance caught my eye and after getting to know them, I realized that we shared the same goals and interests in team building and competition.”
The Philadelphia 76ers
When: September 2016
The Philadelphia 76ers have become known as perennial bottom-feeders in the NBA for the last several seasons due to a tanking strategy that they hoped would generate a number of first-round picks that would reshape their roster. Ultimately, it remains to be seen if players like Ben Simmons, Joel Embid and Jahlil Okafor pan out in a basketball context.
Despite their flaws, the 76ers as a franchise have proven they are unafraid of putting their name and resources behind projects outside of basketball – evidenced by the distinction that they are the first U.S. professional team to jump into the world of eSports after their acquisition of Team Dignitas and Team Apex.
“We like to be first and get out in front,” Sixers CEO Scott O’Neil told CNNMoney. “We’re always looking for new and exciting opportunities and eSports is an incredible, growing space.”
While the owners behind the Sixers already have seven pro sports franchises – including English Premier League team Crystal Palace and the NHL’s New Jersey Devils – they plan to form a super team of sorts by merging Dignitas and Apex and letting them loose on games like League of Legends, Counter-Strike: Global Offensive, Overwatch, Heroes of the Storm and Smite.
“The eSports industry is primed for incredible growth and we are thrilled to become an owner of such a storied franchise as Team Dignities,” said Philadelphia 76ers Managing General Partner Josh Harris. “There is a tremendous opportunity to leverage the infrastructure, resources and experience of the Sixers organization to support these exciting teams as they continue to compete at the highest levels across multiple games. We see our entrance into eSports as a natural extension of our expanding interests in traditional sports and entertainment and are confident that our involvement will accelerate the already rapid pace of growth in eSports as a whole.”
When: September 2016
Magic Johnson has proven to be nearly as savvy an investor as he was a Hall of Fame NBA player thanks to his Magic Johnson Enterprises which over the years has seen him own movie theaters, Burger King franchises and Starbucks – which he ultimately grew into a billion-dollar conglomerate.
In 2012, Johnson made waves when he and Guggenheim Partners purchased the Los Angeles Dodgers for $2.15 billion USD which was the most money paid for a North American sports franchise.
Needles to say, Johnson has a proven track record and recognizes where there is money to be made.
Johnson was a part of an investment team including Golden State Warriors co-owner Peter Guber, Washington Wizards owner Ted Leonsis, and Los Angeles Dodgers CFO Tucker Cain, who took controlling interest of Team Liquid – one of the biggest names in eSports with 50 players competing on 10 teams on StarCraft II, League of Legends and Dota 2 – one day after the Philadelphia 76ers made their own announcement.
“In a way, our involvement in leading Liquid is even more assured now than when we were sole owners,” co-chief executive officer Victor Goosens wrote on Team Liquid’s site. “There is no place I would rather be than working to bring Liquid to greater heights together with our amazing staff and players. I’ve now put almost half of my life into Team Liquid, and I’m ready to begin a new chapter in the ongoing story of our presence in esports. Today I want to leave you with a message of reassurance that everything will be the same but better.”
When: June 2016
La Liga’s 93-year-old club, Valencia CF, announced at historic Mestalla Stadium that they would be entering the world of eSports.
“eSports has quickly become a multimillion euro industry and Valencia once again has shown themselves to be on the cutting edge by setting up a team that will fly the club colors around the world,” the official press release read. “The phenomenon has made a dramatic impact in Asia and eSports professionals in countries like South Korea are treated similarly to La Liga stars in Spain. Arenas are packed out by spectators, and also with the help of major sponsorship deals, the industry generates thousands of millions each year.”
Valencia has four teams that compete in Hearthstone, League of Legends, Rocket League and FIFA. The latter is proving to be vital to their eSports growth due to the newly-formed Virtual Football Organization (VFO) which took place in October and became the first professional virtual football competition in Spain and features 11 vs. 11 competition.
When: May 2016
Touting the reach of League of Legends which at the time had over 67 million active players squaring off each month, Bundesliga side, FC Schalke, acquired team “Elements” and players Etienne “Steve” Michels, Hampus “Fox” Myhre, Berk “Gilius” Demir, Rasmus “MrRalleZ” Skinneholm and Hampus “Sprattel” Abrahamsson in May of this year.
“We have noticed that the level of professionalism in eSports has continued to grow over the past years. Particular noteworthy is the development of structures within League of Legends and the flagship League of Legends Championship,” said Moritz Beckers-Schwarz, chairman of the board at FC Schalke 04 Arena Management GmbH.
Unlike past fútbol club interest in eSports which relied on matching club sensibilities with a likeminded game like FIFA, FC Schalke chose instead to focus on reach rather than brand synergy.
West Ham United
When: May 2016
Premier League club, West Ham, became the first club in the UK to sign a professional video game competitor by employing eSports player, Sean Allen, who was a runner-up at this year’s 2016 FIFA Interactive World Cup in which 1.2 million people entered.
Like a more traditional club signing, Allen was given a kit and a number – which he wears at tournaments – and called it “the biggest thing ever to happen to me.”
“This is a big move for West Ham United,” said Hammers boss, Slaven Bilic. “I have heard that Sean is a big player in the eSports arena so I am delighted we have managed to secure his services. I hope he can now go on to represent the club with pride across the globe – he will certainly have the support of all the lads whenever he dons the claret and blue.”
West Ham’s head of digital marketing, Karim Virani, told the club’s website that it had been looking to sign an eSports professional “for a while.”
“The digital game is incredibly popular with our fans, so we are really excited about what we have in store for them,” Virani added.
When: March 2016
NRG eSports, which has one five-player team that competes in League of Legends and another team of five focusing on Counter-Strike, announced in March that Shaquille O’Neal and former baseball players Alex Rodriguez and Jimmy Rollins contributed to their latest financing round – joining Andy Miller and Mark Mastrov, who along with O’Neal are minority partners of the NBA’s Sacramento Kings.
“Valuations of teams are still small,” Miller told ESPN.com of O’Neal and co.’s involvement. “They wanted to get in super early as they are seeing the giant viewership numbers that are dwarfing pro sports right now.”
When: June 2015
Dallas Mavericks owner, Mark Cuban, was part of a team that invested $7 million USD in Seattle start-up Unikrn, which offers wagering on competitive video game tournaments based around games like League of Legends, Dota 2 and Counter Strike: Global Offensive.
“I did an interview with CNBC a couple of months ago and within two minutes of the interview, Mark Cuban called me,” says Rahul Sood, co-founder of Unikrn and creator of the gaming PC company Voodoo PC. “We exchanged a couple of emails back and forth and within two days he said ‘I’m in’.”
In a 2012 Reddit AMA, Cuban spoke about eSports, saying, “Ive looked at MLG and talked to folks in the business. Its interesting. But i havent had the time to take a deep dive look at it yet.”
Three years later, Cuban entered the fray.
“The rapid growth of eSports has created an entire new category of competition and I am proud to partner with Rahul Sood and his team to help bring eSports to an even greater audience,” Cuban said in a statement. “I’m excited to be involved with a new sport just as it’s poised for huge growth.”
Despite his enthusiasm, Cuban seems to want to steer clear of any ownership of specific teams.
“Right now it’s a gold rush to buy and sell and build teams,” he told Fusion. “That’s creating a confused market. But more importantly, I’m worried about how quickly players burn out. It’s a grind to keep up and to become great. Particularly at LoL. I know teams are trying to do more, but the number of hours involved is a real concern for me. I’m not closing the door, but it’s not something I would pursue right now.”
When: May 2015
Vfl Wolfsburg signed two players from team, Meet Your Makers, Benedikt ‘Salz0r’ Salzer, and Daniel ‘Dani’ Fink to compete in FIFA based off accolades at the time which included Salzer being the four-time reigning German FIFA champion and Fink being undefeated on ESL’s German ladder.
“We want to bring together the two worlds of the future,” Wolfsburg manager Klaus Allofs said in a statement.
A year later, the club signed David Bytheway – the first British pro-gamer to join a club – who competes in FIFA.
When: October 2015
Alister Usmanov, Russia’s richest man with an estimated net worth of $14.7 billion USD, is already a 30 percent shareholder in Premier League club, Arsenal. However, in 2015, he proved he wanted full autonomy when he gave a staggering $100 million USD to top Russian team Virtus.pro.
“eSports are a unique proposition, uniting the sports, media and the internet industries,” said Ivan Streshinsky, a member of USM Holdings’ board, a company Usmanov founded. “It is a fast-growing market, which has already generated huge interest around the world and Virtus.Pro is the leader in the eSports industry in Russia. I am confident that the support from USM will spur the company’s further development and enable it to take its projects to a whole new level.”
If you needed any further proof that eSports teams are for real, Usmanov could have purchased Spartak Moscow for €60.8m according to a 2012 survey by PricewaterhouseCoopers.
- Featured/Main Image: Creative Commons