With the Great Blockbuster Year of ’15 well underway, non-film content in cinemas such as opera, theatre and concerts is seeing its steady rise temporarily eclipsed. But for eSports (electronic sports or pro-gaming) on the big screen this is set to be the breakthrough year. Having already won recognition as a professional sport, selling out arenas in record time, broadcasting on public television and resulting in USD $1 billion dollar deals, cinema is eSports next logical frontier.
March this year saw the opening of the first dedicated eSports arena in the Vue multiplex in London’s Fulham Broadway. The “Gfinity Arena” is billed as the only dedicated eSports venue in the UK, with a capacity for 600 spectators across two screens. Gfinity’s head Neville Upton is quoted as saying that the venue and tournaments are critical in making eSports a household concept across UK and Europe. “I am looking at the possibility of different cinemas, different sizes…potentially bigger venues for some games. The market is growing rapidly.”
Gfinity is hosting the European Call of Duty Pro League in association with Activision. The Premier and Championship divisions, the highest in the league, both feature top elite teams from around Europe with eight participating teams in each division. Interestingly the Gfinity Pro League is set to start on 10 July, with qualifiers already from 27 May, meaning that it overlaps with the busy summer blockbuster season. Yet Vue is confident enough about it to devote valuable real estate to the venture.
Speaking to IB Times, Upton states that “Vue are a large global cinema chain, very pro-active, very excited about eSports… Their culture is a really good fit, very innovative and we want to be able to take eSports across the country but also around the world.””
So why is eSport is so big and does it have a genuine potential in cinemas?
A Brief History of eSport
For those who think that eSports is a new phenomenon, consider the picture above, which shows a Space Invaders tournament from 1978. The BBC first covered eSports in 2001 and ten years ago Jo Twist interviewed Jonathan “Fata1ity” Wendel, on how the “Golden boy gamer becomes a brand,” who had by then won six CPL (Cyberathlete Professional League) championships and “signed a lucrative 12-year deal with Creative Labs.” Since then eSport has only grown bigger.
As of early 2015 League of Legends has 67 million users around the world every month. 23 million people had streamed coverage of it in 2013. When DOTA 2’s tournament The International opened the prize pool to crowdfunding it grew from USD $1.6 million to over USD $10 million in just under two months. That means that it is worth more than the US PGA Championship golf tournament.
ESPN is broadcasting The International in the same way as regular sporting tournaments. The League of Legends 2013 World Championship final had 32 million online viewers, a higher viewership than many major American sporting events, despite the data excluding viewing figures from China, one of the biggest markets for League of Legends.
Far from just being streamed to game players’ bedrooms, the DreamHack digital festival was broadcast on all of the major Nordic countries public television channels, including NRK in Norway and on four of SVT’s channels in Sweden: “Sveriges Television (SVT) started to broadcast eSports from DreamHack already in 2009 and have one of the longest track records of any western media companies to produce and broadcast eSports.” That is despite (or perhaps because) no less than 15% of the Swedish population uses Twitch, which live-streams DreamHack and other events online.
Yet the biggest market for eSports has and continues to be South Korea (The Republic of Korea), which has been driven by early availability of cheap and super-fast broadband. According to Jo Twist, who recently visited RoK with the Creative Industries Forum, “Professional gamers in RoK were treated like Premiership footballers in the UK and the coverage of ESports there was comparable to that of the Premiership.”
Making eSport Big – Trends and Deals
Three trends have brought eSport to prominence in recents years: the audience switch from linear broadcast television to on-demand online media consumption, development and extension of the technology infrastructure (broadband, advanced PC performance, streaming platforms, etc.), and finally the development of its own culture that has lifted the social stigma of gaming and seen a broadening to include females and other non-stereotype gamers.
In 2013 the US began recognising eSports players as professional players and issued visas for people to enter the country as such. Robert Morris University of Illinois in Chicago even offers eSport scholarships for League of Legends players, alongside regular athletic scholarships.
Arguably the game changer for eSport was Amazon acquiring video game streaming platform Twitch.tv for USD $970 million in 2014. Twitch does not just stream eSport games but also gaming conventions, trade shows, speed runs, charity events, and more, though eSports is one of the largest ‘verticals’. While Amazon could have acquired a traditional media company like Liberty Media, it instead focused on a pure-play Internet focused venture, recognising where the next generation of consumers spend their time and money.
The research from Newzoo on what constitutes a typical eSport enthusiast shatters the stereotype of anti-social teenagers looked up in a bedroom in his parents’ house.
In the US and Western Europe the typical eSport viewer is male, aged 21-35, more likely married and in full-time employment than not, with a household income of around USD $100,000. This is a demographic that is not only highly attractive to advertisers but also one that cinemas desperately need. According to Newzoo, “Esports revenues totaled $194 million last year and will more than double to reach $465 million in 2017,” and “the esports Economy could easily generate more than $1 billion” before 2020.
The League of Legends tournament in Seoul, RoK is already famous for playing in the FIFA stadium that seats 40,000, but what is perhaps less known is that two tournaments at the 8,000 seat Wembley stadium in London sold out in under an hour. According to Stuart Saw, the EMEA Regional Director at Twitch, the global reach of eSport viewing is 205 million unique users per month, with the average Twitch user watching over 100 minutes of content per day.
The most famous players often stream their daily practices to millions of fans on Twitch and while footballers might post the occasional tweet, eSport champions interact with their fans for hours at a time. Their social media footprint extends way beyond Facebook and Twitter and as digital native celebrities they connect with their audience, fans and followers in a way that no regular sporting celebrity has ever been able to do.
American Express & Coca Cola
Coca Cola and American Express are both major eSports sponsors, giving further legitimacy to the nascent field. Their efforts tap into desirable demographic that is otherwise immune to advertising (no ad breaks in games and in-game ads still small market). American Express launched a League of Legends pre-paid credit card together with Riot Games with RP+ for dedicated gamers. The card was either such a success or failure that American Express had to terminate further RP+ points as of 1 December 2014. Previously Visa had offered a World of Warcraft credit card with Blizzard Entertainment through First Bank of Omaha.
Coca Cola’s involvement with eSport, however, goes deeper and is more comprehensive than credit cards withdrawing their schemes (alienating gamers in the process) – and it is not just to fuel up all-night gamers with caffeine. Profiled in a Fortune article titled ‘Coke is bringing eSports to the big screen. Here’s why‘ it observes that with shifting entertainment consumption patterns of the younger consumer demographic it makes sense for major global brands to support nascent industries like eSports that other brands don’t understand or shy away from.
Coke has been active in directly engaging global eSports fans at events like the League of Legends World Championship in Seoul, South Korea, and the Mid-Season Invitational (MSI) in Tallahassee, Florida. Over 27 million fans watched the World Championship livestream last year, and fans consumed over 179 million hours of League competition over the entire 15-day tournament.
Coke brought the World Championship live to Cinemark Theaters at 18 locations in six different countries last year. This year, Coke has increased its reach and is livestreaming the MSI to the big screen across 15 theaters in three U.S. cities: Chicago, Seattle, and Dallas. That’s up from just three theaters in the U.S. last year.
We should expect to see Coke significantly expanding its global eSport cinema footprint this spring and autumn, with the company having recently renewed its partnership with Riot Games. For Coca Cola it is a double win as it lends credibility to the eSport movement, while at the same time achieving reach and connection with consumers at a fraction of the cost of traditional media channels (think a 30-second Super Bowl spot) by giving away give aways goodies like League of Legend cups, gaming hats and stress balls.
Matt Wolf, Head of Global Gaming at Coca Cola is quoted as saying that “This content is attractive to the teen millennial and 30-something audience. This is a new form of media consumption and the world is changing, movie theaters are keen to evolve. Theaters have been very receptive to eSports even with blockbuster summer movies playing.”
Despite the games being streamed after midnight in North America, due to the time difference with Korea, theatres sold out and fans spent five hours or more to see the games being played. While cinemas typically suffer under-utilisation during weekdays and daytime, there is normally even less utilisation at night time, so this represented zero opportunity cost in terms of competing with regular film screenings. Significantly cinemas also reported brisk business at the concessions stands.
eSport and Cinema – Who Benefits More?
What is important to realise is that cinemas need eSports – and the demographic that it offers – more than eSport needs cinemas. Activision held the finals of the Call of Duty Championships at the Royal Opera House over two days in February (a month after the BAFTAs) where the top three teams shared a prize pool of USD 1 million.
For Gfinity the Vue arrangement is a ‘stepping stone’ until the company can establish its own dedicated venues. Upton is quoted in IB Times as saying that:
“My view – sorry, wrong word [laughs] – my opinion is that if you look at how big the market is we’ll fill these arenas quite quickly, then we start the marketing and people get used to where we are, who we are and what’s going on, then we won’t be able to satisfy the demand so we’ll need to find a bigger arena to move to. I don’t know what the size is, it could be thousands of people every week, but we need to build with the market.”
For now Gfinity is happy to work with Vue and grow slowly with the market. Interestingly UK is far from the largest eSport market, with China, RoK, the United States and Scandinavia all larger.
Just like any other sport eSport is a collective experience and fans want to enjoy it together and the cinema offers a more immersive environment for a large group than the television or monitor does for a small group at home.
There is thus a window of opportunity for cinemas to get in on the eSport act, but it will not last forever. Cinemas that wait for the Hollywood adaptation of Hitman, Assassins Creed or Warcraft could be missing a trick by not playing the games themselves on their screens.
The latest instalment of Call of Duty (see trailer below) is described as having “the scale and the scope of the equivalent of four Hollywood movies in it,” not to mention that the franchise has achieved sales of over USD $10 billion so far. That compares to a combined USD $4.2 billion box office for the two “Star Wars” trilogies.