Esports – the business of competitive, professional video-gaming – is an increasingly important cog in the now US$134 billion dollar video games machine.
A far cry from the clichéd vision of basement-dwelling loners, these days competitive gaming has evolved from a simple pastime into something that more closely resembles the business of traditional sports, and it’s attracting big money and huge audiences.
Universities (including some in New Zealand) now offer scholarships to esports players. The top tournaments have massive prize pools (the largest topped US$25 million in 2018) and pro-gaming has become a legitimate career path for the best players.
Esports will even feature at the 2022 Asian Games, and it is being considered as a demonstration sport for the Olympics. This is starting to sound serious.
As a business, esports has become a very big deal. Live streamed esports events are attracting the kind of online viewership many traditional sports would love to enjoy. The 2017 League of Legends final alone was watched by 58 million people – a number advertisers understandably find rather interesting.
While many of the impressive statistics floating around esports emanate from Asia and North America, New Zealand is catching up and now boasts a healthy, albeit significantly smaller, pro-gaming industry of its own.
Here, a governing body (the New Zealand Esports Federation) has been established, providing that vital guiding hand any sport needs to grow. There is a dedicated esports tournament host and broadcaster, providing a central hub for fans to watch the best local talent in action. And even the old school of the broadcasting world, Sky TV, has got in on the esports act. What’s more, the New Zealand Breakers basketball franchise launched its own esports division – called The Breakaways – in 2018.
From gaming to esports
But what exactly is esports? Freddie Tresidder is general manager of The Breakaways and sees a massive difference between recreational gaming and esports. He uses the analogy of comparing someone having a kick around in the backyard to Manchester United FC... one is a game, the other a full-fledged sporting business. Gaming is no different.
“We treat our pro gamers like athletes,” says Tresidder. “And, in return, they can expect to be treated like professional sports people. We schedule training sessions, monitor what they’re eating and their lifestyle, and in return they get all the resources they need.”
Set up in 2018, The Breakaways is the first truly professional esports team in the country. Before that, esports teams tended to be amateur affairs started and run by enthusiastic gamers who found sponsors to help pay their costs.
With a current roster of 23 gamers, both male and female, plying their trade in various games, this new addition to the local esports landscape means elite New Zealand players can attend tournaments around the world without having to fund going themselves. It’s serious stuff and a significant investment for the club, which is why there is now a specialised training facility at the club’s Auckland base. These players are expected to perform.
Why the interest? Ironically, part of it comes back to how the internet is killing off television. As the under-34s ditch broadcast television in droves, it means they are also missing out on watching traditional sport – like basketball – being played.
This fact hasn’t gone unnoticed by the world’s sporting franchises, and many of them are addressing this by starting their own esports teams to re-establish that link between their core business and younger viewers. For example, almost every team in the American National Basketball Association now runs an esports team.
The tournaments themselves are no laughing matter either. Ranging from one-off local events, to regional qualifiers through to global finals, esports competitions tend to be held at real-world venues, rather than online – it eliminates lag and cheating, and creates quite a spectacle.
Some of the largest tournaments are run by the game publishers themselves as a kind of promotional tool for their products.
Blizzard, maker of the wildly popular World of Warcraft, among other games, has become so massive, and esports so vital to its success, that it has a dedicated esports arena in Los Angeles. Here it hosts events with all the pomp and ceremony the grandest sporting events can muster.
New Zealand doesn’t have the scale for that kind of event. However, local tournaments here can still be significant. Gaming and esports events specialist Ping Zero hosts a number of tournaments each year. The most recent, at Eden Park, drew over 300 players.
Perhaps the biggest player in this market locally is Let’s Play Live (LPL). LPL is a dedicated esports tournament host and broadcaster that has quickly become a major player on the burgeoning local scene. Stashed away at the base of Auckland’s Sky Tower, LPL runs a purpose-built gaming studio crammed with high-end gaming PCs, Xboxes and PlayStations. From its base it can host – and broadcast – coverage of games between New Zealand’s top gaming teams. Think of it as Sky TV and Super Rugby rolled into one – they don’t own the teams, they just run the tournaments and broadcast them.
Duane Mutu – LPL co-founder and board member of the New Zealand Esports Federation – explains the role LPL plays in the local esports landscape.
“LPL operates a level above the teams and players. We’re there to create leagues and tournaments, so there’s a consistent pathway for New Zealand’s best gaming talent to follow.”
LPL packages this up into highly polished live coverage, complete with commentators and all the bells and whistles expected of modern live broadcast sport. It’s then pushed out over the internet, for free, via a popular esport streaming site called Twitch. Mutu says that by creating such a professional looking product, it helps the overall esports scene by making it a more attractive prospect for advertisers and sponsors, as well as creating a portal for the fans.
An interesting twist to this tale is the role Sky TV has played in helping attract sponsors and advertisers to esports. By the end of 2018, LPL had made some 65 esports broadcasts for Sky. An old-school pay TV broadcaster isn’t exactly the first place a cord-cutting, under 34-year-old heads to for live gaming content, but Mutu speaks positively about how Sky has helped get esports to where it is today.
“There was pretty much no one in the world putting video games on linear TV back in 2015. It just wasn’t happening. The very first event we did, we got together the best teams in New Zealand for League of Legends and did a deal with Sky TV. That made us one of the first territories in the world to do a live linear TV broadcast and that fast-tracked us to where we are today. People were interested, wanting to know how and why we did it,” says Mutu.
“Now, suddenly, we’ve got this esports landscape in New Zealand that’s looking very mature on a global scale. We’ve got this audience that’s used to seeing esports sitting next to rugby or cricket – that’s very important because it breaks down those stereotypes.”
For the players themselves, this legitimacy equates to new career paths opening up, and in a world where robots are taking jobs that can’t be a bad thing. As if to emphasise this point, Waikato University recently began offering esports scholarships for school leavers. The university’s director of student services, Mike Calvert, explained to Stuff last year that “there are genuine career paths for people in esports. It would be almost negligent not to engage with it.”
With the top players banking over US$4 million in the past year, there is no shortage of motivation for players to train hard.
“On a global stage, the earning potential is limitless,” says Tresidder. “There’s a North American League of Legends league, where the minimum player salary is $120,000 a year, not including prize money. Obviously it’s a bit smaller in this part of the world, but we’re confident we can get to a point later this year where every single one of our players under The Breakways’ umbrella will be a full-time player on a full-time salary.”
In terms of how much The Breakaways earn, Tresidder is staying mum, but it’s fair to say these guys aren’t rich, not yet anyway. However, Tresidder did say that the players on contract are afforded opportunities to train like athletes and attend overseas tournaments that would otherwise be out of reach for them. Tresidder says that remuneration is different for each gamer on staff and ranges from salary in some cases, to providing travel to get to the big overseas tournaments for others.
“A lot of these guys and girls are university students, or finishing high school or are working part time anyway, so for them it’s not a requirement to get a pay cheque. For some of the teams, we pay them week to week during the season. For others, we’ve built a deal that helps them get where they want to go as a player.”
While it has big expansion plans, Tresidder says the club is taking a cautious approach, so it remains sustainable. It cites the failure of many sporting franchises over the years – both traditional and esports.
According to Mutu, there were some 470,000 esports consumers in New Zealand last year. Many of these can’t be reached by traditional media channels. For this reason, the bulk of income for esports in New Zealand comes by way of sponsorship and advertising.
“The reality is that sponsors and advertisers are where most of our income comes from. But we’re starting to see advertisers come in that aren’t endemic to gaming, brands like Carl’s Jr and Hell Pizza have jumped in to support LPL, which shows how the appeal of esports is growing.”
Cycling creates esports virtual World Tour
Esports isn’t all controllers and thumbs. Take Zwift, for example. Zwift is a global, online cycling game that lets people race with anyone around the world. The difference here is that riders need to plug their bikes into a smart trainer that connects to their PC or iOS device and then actually push on the pedals to move their virtual bike.
The experience is so realistic that UCI World Tour pros use the game to train for real-world races. In fact, it has now reached the point where cycling’s governing body, UCI (Union Cycliste Internationale) is creating a set of official rules covering esports via digital platforms like Zwift.
And Zwift itself has started the world’s first dedicated esports competition, featuring professional cycling teams racing for real money.
The rise of Twitch and the DIY broadcaster
When it comes to watching live gaming, Twitch is top dog. The Amazon-owned streaming service lets anyone broadcast their gaming content to the world. And, just like YouTube, those with large followings can make a decent living (a cool US$250,000 a month if you’re number one).
According to Twitch, at any given time of day there are at least one million viewers tuned in, watching some of the 434 billion minutes of content served up each year. All the viewer needs to tune in is a web browser. It’s all free.
Competition in this space is revving up though, with other big guns in the tech business trying their level best to “do a Twitch”. Microsoft, YouTube and Facebook are all clamouring for a slice of the action, some even luring the top ‘Twitchers’ away with lucrative contracts.
Top five most watched esports on Twitch
- Counter-Strike: Global Offensive
- Dota 2
- League of Legends
- FIFA 19
*Source: newzoo.com – for December 2018
Grass roots approach
Tech giant HP has a significant presence in esports in New Zealand. Jason Spiller is responsible for esports’ relationship with HP in New Zealand and says that, locally, the company takes more of a “grass roots” approach. By this he means they are not throwing money around, but, instead, are taking a more targeted approach to getting a return on investment.
“I’m looking for organisations that have a growing community and fanbase that has built up over time. We have about 15 gaming organisations we sponsor in New Zealand and we picked them because of their community. They have strong Twitch followings and they really know how to get in there and engage with the audience that we’re trying to target.”
He says that traditional forms of advertising simply don’t work for the gaming audience, “TV, for gamers, is largely irrelevant”.
Given the sheer scale of gaming, both in terms of players and viewers, esports looks to be a veritable goldmine for sponsors and advertisers trying to reach the hard to reach under-34 age group. With the huge predicted growth of global esports – it is expected to become a US$1.6 billion industry within the next two years – esports looks as if it’s here to stay.
“Now, suddenly, we've got this esports landscape in New Zealand that's looking very mature on a global scale. We've got this audience that's used to seeing esports sitting next to rugby or cricket”