A Blog by Jonathan Low

 

Dec 10, 2011

Professional Gaming Gets Real: Sponsorships, Advertising, Prize Money...Betting?

It was just a matter of time.

Xtreme sports found its market - and how many kids can board or blade, let alone have the cojones to try a jump, to say nothing of a flip? Poker is on TV with respectable ratings and features what? A bunch of dudes sitting around playing cards.

Compared to that, the hundreds of millions who play computer games on a daily basis are an insatiable beast of a market. The interest in competitive gaming is finally becoming apparent. Prize money, sponsorships and salaried teams are becoming a reality. The potential is almost too vast to contemplate; multiple games, multiple platforms, tv and streaming contracts, commercial advertising and, the controversial Holy Grail: betting. This is going to be huge. And the future is now. JL

The Economist reports:
IN ONE CORNER was Greg Fields, a talented young player whose psychological demons had so far stopped him from realising his full potential. In the other was Lim Yo-Hwan, an old master with a string of titles and championships, still a ferocious competitor, but one whose glory days were probably over. Mr Fields had already racked up a 3-0 lead in their best-of-seven series, but over the next 30 minutes Mr Lim put on a dazzling display of calculated risk-taking and exquisite control and won the next game, then another and another, levelling the series at three games apiece.

The game being played was “StarCraft 2”, a strategy game designed by Blizzard Entertainment, an American developer, featuring three clashing science-fiction armies. The matches were part of a three-day tournament run in Orlando, Florida, by Major League Gaming (MLG), an American firm that organises “e-sports” events around the country. Besides “StarCraft 2”, players can compete for thousands of dollars of prize money in “Halo: Reach”, a sci-fi shooter, or “Call of Duty: Black Ops”, a war game
The idea of staging video-game tournaments for money has been around for a while. In 1997 Dennis Fong, an American gamer, won a Ferrari with his brilliant playing of “Quake”, an early first-person shooter. Since then professional players have also done well with other games—such as “CounterStrike”, another shooter, or “Warcraft 3”, a strategy game. The predecessor game of “StarCraft 2” has been on cable television in South Korea for more than a decade. Good players there can make a reasonable living from salaries, sponsorship and prize money, and the very best can earn hundreds of thousands of dollars a year. Yet although MLG and similar organisations have been hosting tournaments for years, professional gaming has been slower to catch on in the West.

After the release of “StarCraft 2”, that seems to be changing. Each of MLG’s events this year has set new viewing records. Besides the 15,000 who attended in person, the online live audience for the Orlando tournament peaked at more than 181,000 people in 163 countries.

MLG is only one of a number of firms offering such contests. They range from weekly online-only events that pay out $100 all the way up to glitzy affairs like the Global StarCraft League, a South Korean tournament that pays out 145m won ($127,000) every couple of months. IGN, a gaming website owned by News Corporation, runs the IGN Pro League, which offers $30,000 to its champion. Sweden plays host to Dreamhack, a twice-yearly games party with a prize pool of 400,000 kroner ($57,000). The best players can make serious money (see table 3), but Shawn Simon, an American “StarCraft 2” professional, reckons that, even outside that elite, “StarCraft 2” alone probably provides a living for about 100 players worldwide. “I’ve been continually shocked by how fast it’s grown,” says Dustin Browder, the game’s chief designer.

Sundance diGiovanni, MLG’s founder and chief executive, concedes that many people still think playing video games for money is a strange idea. Like any sport, video games have a culture that can be baffling to outsiders. Rather like professional wrestlers, gamers tend to play under pseudonyms, so Messrs Fields, Lim and Simon are known to their fans as “IdrA”, “Boxer” and “Sheth”. Some critics are bothered by the absence of physical exertion, but that never held back chess.

E-sports can be a boom-and-bust business, says Mr diGiovanni, with fans’ interest waxing as a big new game is released and then waning again; and it is definitely for the cognoscenti. Yet the overall trend is strongly upwards. One reason, says Sean Plott, a “StarCraft” player turned commentator, is generational: video games are becoming more mainstream as the people who grew up playing them for fun turn into adults with the disposable income to spend on watching the pros.

Technology has made it easier to build tightly knit fan communities. Web-gaming services such as Microsoft’s Xbox Live or Blizzard’s Battle.net offer skilled amateurs a chance to play against professionals, which would be unthinkable in, say, professional football or basketball. Thanks to video-streaming sites like Justin.TV, players can broadcast their practice sessions online and chat with fans in real time, and enthusiastic amateurs can televise tournaments organised in their living rooms.

Game designers can help, too. “StarCraft 2” was conceived from the start to offer a good experience for spectators, says Mr Browder. It may be hard for new viewers to appreciate the players’ skill, at least until they try it themselves, but the game is meant to be appealing to everyone. So for newcomers who have yet to master the finer points, “we can offer the visual spectacle of alien races battling to the death for your own amusement.”

Winning streak

Other developers are piling in. Riot Games is pushing “League of Legends”, a free-to-play fantasy team game played online by around 4m people every day that often attracts more viewers than StarCraft 2 to its professional matches. For the game’s second season of competitive play the company is offering a $5m prize pool. Valve, another big PC developer, is hoping to break in with “Defence of the Ancients 2”, a direct rival to “League of Legends”; in August this year it hosted a tournament for an early version of the game with a first prize of $1m.

Good players can make a reasonable living from salaries, sponsorship and prize money, and the very best can earn hundreds of thousands of dollars a yearThe buzz around these games is helping to attract interest from sponsors. Big brands such as Coca-Cola, Red Bull, Samsung and Intel have all sponsored tournaments recently. They see this as a good way of getting exposure to a sought-after but hard-to-reach group of people: males in their late teens and early 20s, who make up the bulk of the audience. And many of the fans are unusually dedicated. One of those who attended MLG’s Orlando event had come all the way from California. Another had bet a tattoo on the outcome of one match. And when it emerged that the Korean StarCraft pro Lee Jung-Hoon (a.k.a. “MarineKing”), a favourite with the fans, would not be able to get to Orlando, a donation drive raised the $3,500 needed to fly him there for the weekend.

And Mr Lim? Alas, his comeback was not to be. Mr Fields held his nerve and, to the crowd’s cheers, took the final game.

Image by Derek Bacon

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