Playing for keeps: The esports element
Gulf Business|December 2020
While much of the talk is around money spent by publishers in supporting tournaments, there’s a lucrative adjacent industry fuelled by investors, sponsors and fans.
DAVID NDICHU

It goes without saying that the esports sector is booming. While much of the talk is around money spent by publishers in supporting tournaments, there’s a lucrative adjacent industry fuelled by investors, sponsors and fans.

As the GCC moves to develop its esports product, nurturing the entire ecosystem will be key to success.

During ESI Digital Winter, a virtual esports event organised by Esports Insider, experts explored how the ecosystem can thrive, with pertinent lessons for the GCC. Investors looking to diversify their portfolios are looking at esports, which offers much better returns than traditional assets and promises a positive future growth path.

Christian Christoefl, vice president for Investment Banking at Deloitte, says there was a 25 per cent increase in investment activity in the sector from 2018 to 2019. The expectation was for continued robust growth and investment in 2020, based on these stats. However, Covid-19 did dampen investment activity, with declines both month-over-month and year-on-year from February to April, Christoefl says.

Tournaments

Hosting large esports tournaments such as League of Legends has a significant economic impact on cities, a fact not lost on regional authorities. NEOM, the futuristic city being built in Saudi Arabia, will have a dedicated gaming/esports zone. Meanwhile, Dubai has plans to build a large esports venue, dubbed the X Stadium.

Ronnie Hansen, director of Sport, Culture and Media at Geelmuyden.Kiese, a media and communication company, says one of the reasons why gaming is so lucrative for host cities is the international nature of esports. Dedicated fans gather from all over the globe to cheer on their favourite stars and take in the latest trends in the sector. “For other events, even though they’re international, the critical mass is largely local or near locals, whereas esports events will have people travelling from all over the world.”

Another reason is sheer demographics, says Hansen. Contrary to popular opinion, the average esports player/enthusiast is not a kid. “Fans are typically male, well-educated and relatively well-incomed. And they’re quite interested in all sorts of other cultural/social events and will frequent restaurants and bars in the host cities, in addition to hotel stays.”

Although cities are increasingly attracted to hosting esports events, the level of sophistication with which they do that varies greatly.

Ulrich Schulze, senior vice president – Product at ESL Gaming, which organises large-scale gaming and esports events, says the ideal host is not necessarily a large city. A megacity like New York will typically have so much else happening, any event would struggle to grab public attention, Schulze says. Additionally, such cities tend to be very expensive for travelling fans.

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