Professional gaming or “eSports” as it is more commonly referred to, is a huge industry that has been attracting investors over in western countries for the past 3 years. Unless you have some form of interest in gaming, you’d be forgiven for being completely unaware of the massive size of the eSports industry that’s valued at US$892mil in 2016. Still unconvinced? Here are 4 reasons why you should start paying attention to eSports as it makes its way to our Southeast Asian shores:
1. eSports’ strong demographics
There are an estimated 144 million occasional viewers who mainly tune in to the larger international events on top of 148 million who follow eSports enthusiastically. According to Deloitte Global, eSports appeals to a massive group of people that businesses around the world agree to be very appealing. 75% of eSports followers and viewers are the coveted millennials, aged 18-34 years old and 82% of them are male. It has even been reported that eSports viewership numbers are expected to rival that of the NFL by 2017, achieving something in under 50 years that took the NFL 80 years to reach.
2. Large companies and known investors are interested in eSports
It’s surprising to think that professional gaming can grow into an industry that is pulling investors from unlikely places. Major sports television network, ESPN, added eSports to the list of traditional sports that they cover – a surprising move made because of the type of audience that consumes eSports. Chad Millman, vice president and editorial director of domestic digital content for ESPN.com was impressed by the audience’s knowledge at an eSports tournament and how tricky it was to “get the nuance right” to win their approval of your expertise in the same subject matter.
Sporting icons who are taking an interest in eSports include NBA superstar Shaquille o’Neal and baseball household name, Alex “A-Rod” Rodriguez, who’ve both invested in NRG eSports. NRG also happens to be an organization with a team in Counter-Strike and another in League of Legends – 2 of the largest eSports games worldwide.
On more local waters, Malaysian direct broadcast satellite Pay TV service, Astro, launched its new channel eGG, dedicated solely to eSports coverage in the region. Furthermore, ESL, the largest video-gaming event company in the world excited Southeast Asian friends by organising the premier ‘ESL One’ tournament for the first time in Manila in April 2016. The global Dota 2 tournament will then be arriving in Kuala Lumpur in January 2017 in a partnership with the prestigious Genting Group. Even Jack Ma’s brainchild Alibaba has taken notice and invested US$150mil in a partnership with the International Esports Federation (IeSF) with plans to build dedicated eSports stadiums in China.
3. High growth potential in Southeast Asia
Although North America still leads in terms of revenue generated through eSports in 2016, China and Korea are catching up by representing 23% of global eSports revenue. Southeast Asia is also a silent giant as it is mainly responsible for the explosive growth in Asian eSports audience which accounts for 44% of global viewers during tournaments. In 2015, the Sports Commission of Malaysia officially recognised eSports in the same light as traditional sports by incorporating eSports Malaysia (ESM), acting as one of the pioneers of the region to help this mammoth industry make its move in Southeast Asia.
Where countries in the western hemisphere have the lead in terms of number of prominent tournaments held annually, the east dominates the scene with their talent. For years, Korea and China have been associated with some of the top earning teams and players like the World-Ranked 2nd Dota 2 team, Wings Gaming and Jang “MC” Min Chul, the top earning Starcraft 2 player in the world. However, Southeast Asia is exploding with eSporting talent in the Southeast region with the most recent accomplishment by Malaysia’s Team Fnatic who recently placed fourth in the 2016 International Dota 2 Championships (“The International 2016”), taking home US$1.4mil in prize money. The team also had a representative from the Philippines in the form of Djardel “DJ” Mampusti.
Similar to traditional sporting teams, eSports teams require coaches and managers to help them grow their skills and ensure they put enough effort into training. Singapore’s Kelly “KellyMilkies” Ong is currently lending her talent to Sweden by managing one of the top Dota 2 teams in the world, Alliance. Imagine the potential of her contributions if she were to focus her efforts on growing and managing a team in her homeland!
4. Competition is still relatively low
Although there are a steady stream of smaller tournaments being held across the region, there is no denying that fans are still waiting on events with bigger and better prize pools and recognition. In fact, The International 2016 saw the largest overall prize pool at US$22mil. As larger companies in the region start taking notice, one can only expect the industry here to grow exponentially over the next 5 years.
Even entrepreneurs are able to have a piece of the eSports pie to themselves with eSports-focused startups slowly but surely making their presence known in the market. From Hong Kong’s kek.tv that provides livestreaming services to Singapore’s game developers Sparkjumpers, the number of possibilities that could arise is an exciting and very realistic vision.
So how do investors get involved in eSports?
The first step is to always research the different avenues of approach. If you are planning on investing in an eSports team, it is worth looking at each player’s level of activity in tournaments. For some, it could be a side hobby or a phase until they graduate from universities or find a full time job. Gamers based in Singapore like the infamous Wong “Chawy” Xing Lei are unfortunately often sidelined by major eSporting teams due to the nation’s compulsory 2-year military service which is a deterrent despite having some of the best talent in Asia.
Investors can also consider placing their money in smaller companies or startups who are looking to make an entry into the industry. These are not necessarily confined to the tech world as there are many factors that go into computer games and the vessels that make them run smoothly in terms of both software and hardware.
eSports is well on its way to becoming one of the fastest growing industries globally with millions of loyal fans especially in Asia who are ready to receive and support its evolution closer to their homes. Computer games is an industry that keeps evolving with the advancement of different technologies. Just think, we came from a simple game like Pong in 1972 to augmented reality games like Pokemon Go. There is simply no indication that the eSports industry is going to die out any time soon. So when you take your first step into your first investment in electronic sports, remember that you heard it from us first!