The eSports evolution: gamers move up a league

Editor's Choice, Technology | Thu 7 Sep | Author – Business & Finance eSports-McLaren

The development of eSports – otherwise known as professional gaming – is one of the tech industry’s biggest growth stories, with players and entrepreneurs lining up for multi-million dollar rewards. Ruraidh Conlon O’Reilly reports on developments at home and abroad

The McLaren Technology Centre (MTC) is a flying-saucer creation that fits perfectly into a familiar Silicon Valley ethos: glass, steel, circles and curves, and of course a lake that serves the building’s cooling system.

It’s a long way from Silicon Valley, though. Built by architect Norman Foster in Surrey throughout the first decade of the millennium, it has taken a long time to get used to for those who follow the company. The building signalled that McLaren – which had previously done little other than make and run Formula One cars that win a lot of races – would become a road-car manufacturer, a consultancy and a technology company in general.

The MTC is a ruthlessly ambitious statement: the Financial Times described it as the biggest privately funded construction project in Europe at the time. “Have I built myself a pyramid?”, its mastermind, then-CEO Ron Dennis, pondered when questioned about the building’s enormity.

Ron’s gone, his tendency to fall out with people bringing his leadership to a close in dramatic fashion last year. But his legacy makes more sense now: the road-car division has, from a standing start, produced cars that rival Ferrari for performance and desirability (and pricetag). And the wide array of businesses and spinoffs housed in the MTC have won contracts and partnerships in sectors completely unrelated to cars and racetracks.

In May, surrounded by a few million pounds’ worth of cars in the unmistakable foyer of the MTC, a young chap sat himself behind a USB steering wheel and a flat-screen TV and started gaming on software available to one and all. It’s a stark image, because alongside such phenomenally complicated and expensive machinery is game technology that exists in thousands of bedrooms and living-rooms across the world: McLaren is entering the eSports fray.

In the broadest possible sense, eSports is a trend whereby people who play computer games compete for prizes, and in very short order an industry has exploded around ferociously competitive and lucrative tournaments, and the millions of people who spectate just as they would a World Cup, Six Nations or All-Ireland match; and the entrepreneurs behind the scenes who make it all so financially rewarding.

An industry has exploded around ferociously competitive and lucrative tournaments

One of its leading lights in Ireland is Trev Keane, co-founder of sports marketing operation Sportego. “Esports is competitive gaming: it’s people playing the likes of FIFA, Hearthstone, Dota, Counter-Strike: Global Offensive – and they’re just playing at a competitive level,” he explains. “The term eSports is very industry-specific: people within the space wouldn’t use the term eSports; they see themselves as Hearthstone players or CS:GO players. They don’t see themselves as eSports players, so there’s probably a distinction between players and the industry’s thoughts on it.”

The arena’s international growth has proved impossible to ignore, particularly for a marketer. “It’s just growing at a phenomenal pace, and it’s the perfect demographic: 21-35; revenue-wise this year you’re looking at $696m worldwide. The Irish scene itself is very small, but it’s growing. There’s no full-time professional eSports team based out of Ireland and hopefully that will change. We do have a team called Cyclone that are very competitive: they’re based here, with a mixture of international players. They’ve been very competitive. They’re ranked fourth in Europe in Overwatch, which is another multi-player shooter game.”

Golden age

It’s a long way from a generation of crude cliches about spotty teenagers, bedrooms, PlayStations and parents demanding their stop wasting their time and enter the real world. An ambition to work in the games industry is now a legitimate CAO-form choice. And now today’s promise is that one can become a multimillionaire simply by playing computer games.

But then gaming in general has been taken increasingly seriously in recent times. In critical terms, just as we are now in a widely acknowledged ‘golden age’ of TV drama exemplified by the likes of Mad Men, Breaking Bad and Stranger Things, so too are computer games analysed and appreciated for their storylines and artistic achievement.

In economic terms, too, snobbery about the games industry has receded. Agencies such as the IDA have worked hard to attract gaming houses to Ireland as a credible component of the wider US tech industry. Well-known game-makers such as Blizzard, Activision, Demonware, Bethesda and Zynga are embedded and accepted on the Irish scene. Ireland, and Dublin in particular, is also a place where home-grown games emerge as startups. That there is now an Irish Game Makers’ Association says it all.

Keane says that eSports growth in Ireland is certain to happen. In the UK this year’s audience will come in at 6.5m, a one-in-ten audience by population. “You’d probably expect to see the same in Ireland. All the players are here; between PlaySations and Xboxes there are about 1.4m consoles sold. So the players are here, they are playing the games but the opportunities haven’t arisen to be as competitive as other countries or get the opportunities to play in the tournaments and build it up.” To date, nobody’s really grasped the nettle.

There are investment opportunities in the sector – fuelled by large audiences and prize pools

It’s a scene that Keane knows well, having been following gaming since he got his first PlayStation and FIFA in the 1990s. “But in terms of the opportunity, in my own company – Sportego – we speak to a lot of clubs on fan engagement and the converstation kept coming around to: ‘we need an eSports player to engage with our fans on matchdays and to create content and to generally help us activate for sponsors’. And I looked into why one of the clubs wanted FIFA players on their books: what was the reasoning, and what were the opportunities for both the players and the club.”

The experience sparked the first iteration of the Celtic eSports League in late 2016, as Keane and colleagues brought together eight professional FIFA players and eight football clubs from Ireland, England, Scotland, Wales and Northern Ireland. Dundalk, Shamrock Rovers, Hibernian, Wolves, Crusaders, TNS, Hamilton and Linfield all had players representing them in a league format whereby one player was assigned a club and they played each other. Hibs won both the league and the cup.

“It was a very exciting competition; a lot of lessons and takeaways from it. It was very worthwhile doing. We focused on the FIFA game because for football clubs entering into the eSports arena, obviously FIFA is the easiest game to resonate with.

“At the moment we’re talking to a number of clubs in the Championship and Premier League, and advising them on their eSports strategy and how they should enter the field. We haven’t really seen UK and Irish clubs really get behind it compared to Europe, where the likes of Wolfsburg, Schalke, Valencia and PSG have really embraced eSports, set up their own divisions and gone into the world. All we’ve really seen in the UK is that West Ham had an eSports player, Sean Allen, who’s left and Manchester City had Kieran ‘Kez’ Brown. Nobody’s really gone into the space fully.”

Barcelona is not just a football club, even though it’s most famous for that…And the same approach needs to be taken with eSports; it needs to be its own entity

When the time comes, there’s a right way and a wrong way to go about it: clubs need to allow eSports to do its own thing, for very good reasons. “Some of the games are multi-player shooters. If you have a sensitive brand on the front of your shirts, like Chevrolet on Man United or Standard Chartered with Liverpool, they might struggle to be associated with a violent shoot-‘em-up game. If you’re going to go into the space, these are things you’ll need to be aware of: how will your brand feel about being associated with violent games?

“The best way to do that is to leave it to be its own entity. Almost like the European model where you go to Barcelona – and Barcelona is not just a football club even though it’s most famous for that. It’s also a basketball club, it’s a handball club, it’s a volleyball club. And that’s the same approach that needs to be taken with eSports: it needs to be allowed to be its own entity.” Keane and Sportego are talking to several clubs about a consultancy role: sourcing teams and managing their eSports functions for them.

Money to be made

Not only is it a marketing opportunity, but Keane notes that there are investment opportunities in the sector – fuelled by large audiences and prize pools. “A lot of what we’re seeing with the clubs and some of the teams and brands that are coming in are revenue-share opportunities. Somebody will finance the running of the team, sourcing the team and making sure that they have all the tools that they need to succeed, and then they’ll work towards getting a return on the prize money if they can get a strong enough team.

“To give you an example, The International last year, which is a Dota competition: the prize pool was $20m, and the top prize was $9m – so there can be significant returns. FIFA 17 this year is going from a prize pool of $250,000 to $1.4m. That’s where you can look to reclaim.”

Back at McLaren, the young man gaming away surrounded by some of the most expensive four-wheeled machinery in the real world is part of a competition that could see him, or one of his rivals, land a simulator contract at McLaren, become a real-world racing driver – and even one of the 20 fully fledged Formula One stars at the peak of tomorrow’s sport.

Little wonder that the World’s Fastest Gamer competition has been tagged as ‘the best job in eSports’. “This is a hugely exciting opportunity – not only within the gaming industry, but for everyone at McLaren and motorsport in general,” explained CEO Zak Brown. “We’ve long witnessed the growth of online sports gaming, and, right now, the parallels between the real and the virtual worlds have never been closer.

“This is absolutely the right time to be creating such a unique and exciting proposition; one that connects the worlds of racing and gaming in a way that’s never been explored before.

“And the winner will genuinely be a key part of our team at McLaren. This is for real: we absolutely require additional support across our two simulator platforms, so the competition and the selection process will be rigorous, ruthless and compelling to watch.”

Perhaps it’s time for Ronaldo or Lewis Hamilton to consider a career change. 

A GOOD BET: INVESTING IN E-SPORTS

Prize money is the first of three ways that one can make a financial return on investment, with a backer entitled to a share in the prize pool. Creating content and sending it to distribution companies can be lucrative: YouTube and streaming site Twitch are well established, and highlights site Dingit is one of several that buys five-second or 30-second in-game content.

“And then there’s the sponsorship avenue,” says Trev Keane of Sportego. “If you’re a brand looking to reach the 21-35 millennial demographic, with a short-term attention span, who digest their content in different ways, this is the way.” The trick, of course, is to build a strong and competitive team.

“And it’s worth pointing out that what we’re seeing, for the first time in various disguises… if you think of football and rugby, there are traditional teams generally named after a city or a region like Munster, Leinster, Liverpool. You do have some, like the Red Bull brand, entered into German and Austrian sports. But in eSports, because it’s such a new space you’re actually seeing brands creating their own teams. Non-traditional naming conventions are being used – the likes of a Coke eSports or a Red Bull eSports. It’s a real opportunity not just to sponsor a team, but to own a team and move it forward. I think that’s a very exciting opportunity from a brand point of view.”