Legitimizing eSports

City-based teams and global leagues bring traditional sports models to gaming

  • by Linda Deckard
  • Published: July 26, 2017

Pete Vlastelica, Major League Gaming, an Activision Blizzard company; Rick Fox, Echo Fox; Jace Hall, Vision Venture Partners; and Jon Pan, moderator, Amazon Game Studios, at VenuesNow. (VT Photo)

REPORTING FROM BEVERLY HILLS, CALIF. — The Overwatch League, which announced seven city-based franchises July 12, is a game changer for eSports, a new model and a huge part of the discussion of the state of eSports during VenuesNow here July 12-14. The experts warned venue managers that in this sports league, change is at warp speed and gamers will catch up to baseball and football more quickly than most can imagine.

League of Legends is moving to a revenue-sharing league model, another gamechanger that brings stability for ownership as well as players, said Rick Fox, Echo Fox.

That’s extremely important because the player is the key to developing fans, added Fox, a former National Basketball Association player. Fox sees the eSports model maturing to look like the major sports leagues with one big exception, it’s global. Owners will be expected to host games and revenue will be generated by ticket sales, concessions and sponsorships.

“Everything mirrors major league sports, but it’s at warp speed,” Fox added.

“No game is going to fill your stadiums,” added Jace Hall, Vision Venture Partners. “The players are going to fill your stadium, just like Rick Fox or Kobe or Shaq [in the NBA]. For 35 years, eSports has been about the game. Now it’s about the players.”

That represents a major shift in priorities for publishers, because the challenge the publisher has is overhead and their shareholders are looking for the bottom-line video sales, not live action ticket sales.

And sports leagues have to be governed. The answer may be in a third-party league, but the audience is people who play the game, whose loyalty the publisher cherishes.

“We’re talking about massive numbers,” Vlastelic said. “Thirty million people play or watch Overwatch. We’ve reached the point where players are heroes.”

Activision Blizzard designs games that are “really fun to watch,” because eSports is developing experiences, including live experiences, not just games to play.

Pete Vlastelica made that clear in his opening comments at VenuesNow. Major League Gaming, a division of Activision Blizzard, operates leagues for third parties.

Gaming is not about age, it’s a mindset, added Hall, referring to gamers as “Generation Always.”

The eSports ecosystem includes game developers, leagues, games and players. Rick Fox founded Echo Fox two years ago to represent the players. He did it in support of  kids who want to have a career in gaming, like his son. Fox added that “we believe in this next generation. Our deals are like the deals in the NBA, except this is a world sport. It is global.”

Fox currently represents 41 players. “You guys are going to be filling your arenas with us,” Fox said to the VenuesNow crowd.

Overwatch has been around about a year and is a first-person action game. It’s colorful, cartoonish and not overly graphically violent, Vlastelica said. And it is a fun game to watch. “We can create some stability and clarity in eSports around this game,” he said.

There is a lot of money in eSports. For the live event, the question is what will grow fastest.

Hall noted that merchandising it the most effective revenue generator for Defenders of the Arena II, which does so well it has a $21-million prize pool. But sponsorship is catching up fast.

Vlastelica made the case for media rights as the key revenue generator. “The broadcast networks are looking at eSports as a way to get the younger audience.” There is no traditional sport with an average viewing audience under age 40, because young people don’t watch TV, he said.

Fox said his eyes were opened to the potential for eSports live events at Madison Square Garden, New York, where he saw his first such event and “it reminded me of my days playing in the NBA.” And like the NBA, it represented a chance for people to get together in person and talk to each other.

“These players want to come to your arena,” Hall added. “Emotionally, these events at these stadiums touch on self esteem and validity of the activity. That’s what you bring to the sport.”

  • by Linda Deckard
  • Published: July 26, 2017