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Game on: eSports levels up
ROCKSTAR players crowned with millions in winnings. Fans with their eyes trained on every move. Stadiums and arenas usually booked for the likes of Kendrick Lamar and Taylor Swift filled to capacity with tens of thousands of spectators, watching groups of young adults clad in team jerseys battle each other on computers, shooting, looting, killing.
At last year's League of Legends (LoL) World Championship final in Beijing, 40,000 people from all over the world watched South Korean teams Samsung Galaxy and SK Telecom T1 play off in the city's Olympic Stadium.
Another 60 million watched the final via live stream, says LoL publisher Riot Games, now owned by China's Tencent. That's a 40 per cent bigger audience than the 43 million who watched the 2016 event webcast.
It may look like small beans next to the 2018 Fifa World Cup's 3.2 billion television viewers. But eSports viewership is already beginning to trump events like basketball's 2017 NBA Finals (20.4 million viewers on TV and another 434,000 digital streaming viewers), and is gaining on America's biggest sporting event, the Superbowl, which this year drew 103.4 million TV viewers.
The rise of eSports, or competitive video gaming, in recent years has been nothing short of meteoric. Top grossing games like Overwatch, Counter-strike, League of Legends have hit over a billion dollars in in-game sales.
Tournament prize money is steadily piling up. The 6-player team that won the 2017 LoL World Championship took home US$1.85 million, out of a total prize pool of US$4.9 million. Last week, The International 2018 kicked off in Vancouver, where the eighth annual Dota 2 championship tournament offers a prize pool totalling an eye-watering US$24.8 million. What's even more remarkable is that the prize money was almost entirely crowdfunded by the game's community.
Some 2.6 billion people in the world played video games in 2016, says research conducted by Credit Suisse, Unity and Sporteology. That's twice the number of all who play tennis, and second only to football.
Of these, 335 million watched eSports in 2017, up 19 per cent from 2016. The demographic, overwhelmingly male, is made up largely of millennials and GenY teens, who play video games for 8 hours a week on average (and watch TV for only 4 hours a week), according to a Nielsen report.
The market is set to expand much further, with gaming market researcher Newzoo estimating the number of eSports viewers to jump to 557 million by 2021. Newzoo's research shows that most eSports fans were relative newcomers to the scene, having hopped on the bandwagon within the past three years, suggesting that many more could join them in the coming years.
Newzoo also forecasts that eSports revenues, which include sponsorship, merchandising, tickets, advertising and media rights, are set to increase by two and a half times to US$1.7 billion in 2021 from US$655 million last year.
Big-name sponsors are starting to sit up. HP, Toyota and T-Mobile now lend their support (and equipment) to Blizzard's Overwatch League, a league newly established in January. Coca-Cola sponsors the League of Legends World Championship. Audi threw its weight behind Danish Counter-Strike team Astralis in January 2017, and its four rings now adorn the team's jerseys. Other names often seen at tournaments include gaming equipment maker Razer and energy drink brands Red Bull, Mountain Dew and Monster. And Intel, title sponsor of the multi-game Intel Extreme Masters tournament series, has backed the IEM competition since 2006.
"This market is far from saturated and is set to offer strong structural growth in the medium term," says Eugene Klerk, managing director and co-head Credit Suisse global thematic research. A CS report published in April highlighted video gaming as an emerging investment theme, saying: "Video gaming is a market that will also continue to generate above-average revenue growth as more advertising and media spending is directed towards it."
Cristina Alvarez, head of commercial consulting at sports marketing agency Octagon, echoes that sentiment, also stressing that the growing professionalisation of eSports too, has contributed heavily to this growth.
She tells BT: "Competitive video gaming has been with us for some decades but only recently have we seen real change, driven by the structural development of eSports, which have seen the establishment of well-structured pro-leagues, a pool of professional players and the popularity to hold large-scale events." League owners are beginning to pay their players regular salaries on contracts, and starting to pay attention to developing talent for the longer term.
All these changes, she adds, have instilled confidence in the industry, attracting both investors and professional management. For gamers, pro eSports has become a viable career option.
Indeed, the scene has grown so much and so fast that match-fixing - arising out of betting - is rife. In one of the highest-profile cases so far, 19-year-old Korean gamer Lee Seung-Hyun was arrested in 2016 and prosecuted for intentionally losing two matches. His game was StarCraft II, his alias, Life. Lee, said to be one of the greatest players ever, was sentenced to 18 months in prison, suspended for three years, fined 70 million Korean won (about S$85,000 at today's rate), and banned for life from South Korean eSports.
Asia leads the way
With more than half of global video game sales in the last year being made by consumers in Asia, the region has the biggest potential for growth.
Frank Sliwka, chief operating officer of eSports organiser and production company ESL Asia, says: "The Asian market continues to be the biggest growth market for eSports due to its young and growing population, who are native to playing video games."
That should hardly come as a surprise, says Allan Norton, general manager of Informatics Education. "Asian consumers are not only keen gamers but also early adopters of technology - so the transition and subsequent growth of eSports has been a natural progression in Asia," he notes.
Unsurprisingly, much of this growth in Asia has been driven by China, the biggest single market in eSports, where in 2017, Chinese consumers drove 26 per cent of the US$100 billion spent on the sale of video games globally.
Ms Alvarez attributes the success of the Chinese market to its fast growing population, high level of investment from game developers, and high Internet and mobile penetration rates.
Mr Norton agrees that the development of an eSports ecosystem has driven growth. This, he explains, revolves around more than just gamers, who are often the face of eSports, but includes those involved in other areas such as marketing, coaching, education, game design and development, and its base of fans.
Yet the growing popularity of eSports in Asia isn't solely down to China. In fact, South-east Asia is marked as the region's second strongest growth market.
Ms Alvarez says: "We can't forget that South-east Asia is one of the key subregions to watch for as it currently has the fastest growing eSports audience globally."
Newzoo research shows that South-east Asia has more than 9.5 million eSports players and fans, and expects the number to double by 2019.
Alan Hellawell, Sea's group chief strategy officer, notes: "South-east Asia is the world's fastest growing region in terms of eSports participation and audience - Newzoo estimates it will grow at a 29 per cent compound annual growth rate (CAGR) between 2016 and 2021, and by 2021 some 45 million people around the region will either be watching or participating in eSports."
Newzoo and market researcher Niko Partners valued total online game market size in South-east Asia at US$3.5 billion in 2016, and estimate that it will reach US$8.6 billion by 2021, showing a CAGR of 19.6 per cent.
"In fact, the industry in our region is evolving at a much faster rate than in other markets. The professional leagues organised in the US for instance have evolved over decades, whereas in our region we're seeing new leagues and new popular teams emerging every few months," he adds.
Asia has also led the way in its efforts to take competitive video gaming to the mainstream. eSports will make its debut this week at the Asian Games now being held in Indonesia. Six video game titles including League of Legends and Pro Evolution Soccer will be featured at the demonstration event from Aug 26 to Sept 1.
While its inclusion as a medal event at the 2022 Asian Games is still under discussion, clearing this hurdle will cement its status as an established sport.
Ms Alvarez says: "The Asian Games will definitely have an impact into the reach and development of the sport in a region where the rise of the gaming and eSports market has been spectacular."
Talks are also underway for eSports to be included as a demonstration sport at the 2024 Summer Olympics in Paris. "When eSports is part of the Olympics, which I believe it will, then we can expect it to grow to exponentially at a global level," Mr Norton says.
Bracken Darrell, president and chief executive officer of gaming equipment manufacturer Logitech, even told CNBC this month that eSports' inclusion in the Olympics is a forgone conclusion.
The International Olympic Committee has said that for eSports to come under the hallowed Olympics banner, it will have to align with the Olympic values, rules and regulations. That means games that encourage violence or discrimination might be a no-go. The IOC however has also recently hosted a forum with major eSports players, meeting with LoL's Riot Games and Overwatch's Blizzard Entertainment to understand the industry better.
Against the rapidly expanding global backdrop, Singapore continues to take steps towards building its own eSports ecosystem even as detractors claim that Singapore is limited in that space due to its small size and have aired concerns on whether eSports would make a legitimate and viable career option.
Success isn't a click away, but the Singapore market holds advantages over others in South-east Asia.
Nicholas Khoo, chairman, Singapore Cybergames and Online Gaming Association (Scoga) notes that "Singapore already has great fundamentals to start with, like strong internet infrastructure and high smartphone penetration rates". While small in size, Singapore also has a small but established set of gamers.
"Comparatively, Singapore is ahead of its neighbours in the development of eSports and teams from Singapore have already had international success," says Mr Norton. "This can be built upon for both gamers and Singapore's potential as an eSports hub in the region."
Mr Khoo also points to the success of companies with roots in Singapore - like Sea (formerly Garena) and gaming hardware maker Razer, whose founder Tan Min Liang is Singaporean, as encouraging for the eSports community.
"As Singapore offers several advantages in terms of structure, efficiency, and just plain predictability that is attractive for regional entities to be based out of here," he adds.
This has seen regional organisations like Garena (a game publisher), Evos eSports (a professional team) and Bitrep (a regional talent platform) based out of Singapore in recent years.
As part of the recent push, a flurry of eSports competitions were held here this year, with eSports and music festival Hyperplay and the Garena AOV Cup being held earlier this month and the Asia Game Festival in May. Singapore has hosted similarly high profile global events like the Vainglory World Championship and Alisport's World Electronic Sports Games in 2017.
Corporate entities in Singapore have also noticed the potential of the market, often sponsoring eSports teams. An example of such a partnership is telco Singtel's collaboration with Razer to launch a multi-title regional league - The PVP eSports Championship - in October with a pool of US$300,000 in prize money.
These moves are part of Singtel's push to grow its gaming and digital content business. The telco has also made plans to assemble a homegrown team to compete in this year's tournament.
Mr Hellawell says: "It is particularly encouraging to see more companies getting involved and working together to promote esports. The recently announced PVP eSports Championship, which Singtel is leading, is a great example of how companies across the industry are coming together to promote the growth of this industry."
Despite big name players getting involved, Mr Norton notes: "As eSports is still very much in its infancy, the opportunities for new entrants to the market are not limited nor dominated by established companies."
Industry and education
Also crucial to Singapore's push is the involvement of organisations like Scoga, which aim to deepen development and education initiatives through both global and regional partnerships.
Mr Khoo says: "As an ecosystem builder, Scoga has been laying the foundations for years and the pieces are starting to come together."
In 2017, it struck a partnership with Amazon's game streaming platform Twitch, to help players with more effective and engaging streaming and gaming, through lessons conducted for players in Singapore. It is also looking into official certification of eSports coaches here.
Scoga has also worked with its partners to organise conferences aimed at introducing the potential of eSports and how corporates can best get involved. Gaming Matters, a conference to be held in September, will bring CEOs of regional and global eSports organisations to Singapore to talk about the growth and opportunities in the industry as well as some of the issues facing it. Other B2B summits have also been organised by other parties, like the eSports Asia Summit held in May.
Efforts have also been made to provide an educational framework for eSports. In June, Informatics Academy launched Singapore's first diploma programme with a focus on eSports and game design. The programme, which lasts eight months for full-timers and a year for part-timers, aims to equip students with skills in game development, eSports knowledge, team management, live-streaming of tournaments, game design theories and programming.
Students in the first cohort will begin classes in September. The programme has not only drawn students coming from as far as Kenya and Europe, it has also seen interest from eSports players like Amos "Quatervois" Ker, captain of team Impunity, who finished fourth at the Vainglory Worlds in 2017.
These, Mr Norton believes, will "further expand the reach of Singapore and Informatics as a major eSports player".
But for Singapore to become a major player, Mr Norton feels there must be greater acceptance of eSports as a legitimate and viable career option. A reliable measure of that will be in how graduates from the first batch of the programme fare when entering the industry.
Mr Khoo adds: "Currently we are still seeing some inefficiencies for organisations to set up here but I'm optimistic that we will come together and punch above our weight in this sector as we always have."