Investment in eSports

Over the past year and a half (approximately) we have seen unprecedented growth in the eSports industry. Three time NBA champion and actor Rick Fox had acquired a League of Legends team for an approximate price tag of $1 million USD last year, and after a rather strong finish to their first split, Rick Fox sought to branch out and grow the Echo Fox brand. Over the course of the organization known as “Echo Fox”‘s development, Rick Fox has acquired Counter Strike: Global Offensive, Call of Duty, H1Z1, Smash and Street Fighter teams/players.

In the interview with The Rift Herald, Rick Fox was asked where he saw the industry was going..

TRH: Where do you see this industry ending up? How big can it get?

RF: I see it on track in the coming years to sit comfortably at the table with the major four sports in the U.S. As more and more infrastructure is brought, industry leaders in eSports marketing, like VFD eSports, bring awareness of the value to sponsors and large corporations continue to invest in the industry. This allows for the exponential growth in eSports and more inclusion from top brands.

Obviously there is massive potential in eSports as an investment opportunity and as a means for growing one’s business. Rick Fox had stepped into uncharted territory, and inadvertently brought the world of sports and eSports closer together. By having a name like Rick Fox associated with eSports, it allows for greater brand recognition and general public awareness. Since Mr. Fox is looked at by others as a celebrity figure, they might also look at his brand and make others aware, particularly in mainstream media that eSports is not a joke, and should be taken as a serious investment opportunity as well as deemed as a serious and viable area for genuine competition.

He had also started a trend.

This trend saw NBA Insider analyst Shaquille O’Neal, New York Yankees player Alex Rodriguez and the Chicago White Sox’s Jimmy Rollins invest in the NRG eSports organization. NRG has teams in League of Legends and Counter Strike: Global Offensive and are looking to expand into more eSport related games eventually. In his interview with the Daily Dot eSports, Andy Miller (chairman of NRG) said the following about their big name investors

“We think they will help legitimize the space,” NRG’s chairman, Andy Miller, tells the Daily Dot. “They all come from the traditional sports world. They were all unbelievably young when they became professionals, like our guys.”

Miller says that Shaq, Rodriguez, and Rollins approached NRG directly. Rollins is actually a League of Legends player, while O’Neal has been in the gaming and esports space for a while through Turner Sports, most notably when he announced Turner Sports’ new ELEAGUE competition last year. He also co-owns the Sacramento Kings basketball team with Miller.

So you have Rick Fox, Shaq, A-Rod and Rollins investing in eSports through Echo Fox and NRG respectively. Four very big names in the NBA/sporting world. Four people taking a big risk yet they are four very big people who are obviously interested in what the industry has to offer and are very excited to see it progress. This has the potential to revolutionize the eSports industry and legitimise it as it’s growing. With investors like these, Rick Fox’s prediction of eSports having the potential to sit comfortably with the USA’s top four sports is becoming more legit and a possible idea as the days roll by.

You could also look at it from a marketing perspective if anything. You have the names associated with their respective organizations. Big names have the potential to attract big sponsors. Big names also have the opportunity to easily raise public awareness about their brand, which in turn has the potential to increase sales of merchandise and gear that the respective teams are sponsored by. As more people become aware of the names behind the organizations and then see for themselves the players playing whatever game the audience(s) are interested in, they’re inclined to buy merchandise and so forth. Revenue into the teams are likely to increase, which just enhances an organization’s growth. Of course this is likely to occur over the next five years, but eSports has the capacity to grow and reach heights that were unprecedented maybe 5-8 years ago.

As money flows increase, industries are likely to increase in growth, which in turn makes the investors more likely to become more aware and interested.

This is an industry that investors can profit off of and simultaneously people like tournament organizers, organization owners, players and spectators can all benefit off of it. The way eSports is growing and the way sporting/former sporting stars are starting to take and interest and invest and nurture a growing product, the more it looks to be a win-win due to the ongoing legitimization of the industry.

The investment train didn’t stop with Rick Fox, Shaq, A-Rod and Jimmy Rollins. The 76ers acquired Dignitas and Apex as well.

“There’s no denying the fact that esports presents corporate America with a way to reach millennials in a way stick and ball sports just isn’t,” O’Neil said. (in his interview with ESPN)

That’s 76ers CEO Scott O’Neil acknowledging that eSports has the power to reach the younger audience in a more appealing and familiar way. Probably in a way that physical sports hasn’t been able to do as much lately.

(Please make sure you go outside and stuff if you’re a gamer looking to break into the eSports scene, or a gamer of any kind of calibre. A healthy lifestyle is important and balance is required. Stay fit, game hard. At the end of the day, health matters most and you can’t compete if you’re unhealthy)

You see the 76ers do this, and teams like Manchester City, Wolfsburg and West Ham United (English Premier League football teams) signing eSports teams/players too. Large organizations like these are taking their time to take an interest, investigate and invest in this growing industry.

It’s crazy. You have famous individuals taking steps into this industry and then boom. There you have it, the 76ers did this. To me it’s absolutely amazing. The potential for growth is truly outstanding.

And you also have Team Liquid’s recent shuffle which includes the likes of Magic Johnson, which basically tells the same story as Shaq’s investment into NRG. Massive potential.

Also like a huge, huge HUGE step for American television was TBS branching out and successfully showing Counter Strike: Global Offensive on television screens America-wide in the form of the ELEAGUE competition, which boasted a 1.4 million dollar prize pool.According to the eSports marketing blog the following viewership numbers and so forth were the result of ELEAGUE Season 1 –

 

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Obviously very decent numbers considering it was the first time that an eSport, or video game for that matter was broadcast on live mainstream television. The TV viewership averaged around 256,000 (average views per minute over the telecast duration). On Twitch, a total of 7,775,231 hours were watched collectively by all viewers, with a total of 14,800,000 viewers on Twitch and 4,900,000 on YouTube. the ELEAGUE website also pulled a total of 7,670,000 viewers. There was also a lot of new viewers brought into TBS programming, as shown in the above slideshow.

Television may be considered a slowly dying form of delivering entertainment with the introduction and increased availability of the same things that television provides on the internet, these numbers that ELEAGUE brought to the table were pretty good considering the people that usually watch TBS and so forth. Again, another big leap by an organization that was considered a success. Production quality was amazing. The players were happy, the organizers were happy. The audience was obviously very happy with the match ups.

As the industry is growing continuously every day, with organizations picking up various gaming teams, new organizations being formed and so forth, it leaves an industry wide open for positive returns for investors. At a time where eSports is experiencing massive growth, it’s healthy for the industry to gain exposure like it has been getting through those currently involved, like Rick Fox, Shaq, the 76ers and Warner through their ELEAGUE production.

I guess, what I’m trying to get at is, is that this industry is experiencing phenomenal growth, growth that people involved in the industry as labour and/or as spectators probably wouldn’t have seen. With the money coming in and circulating, the industry is bound to grow to heights that weren’t imaginable a few years ago. As Rick Fox said, eSports could very well compete with the top four sports in North America in a few years time.

I think it’s an exciting time for eSports, with the money, sponsorships and big names. The investment is such a crucial part in the growth. Hopefully people don’t get too greedy and the industry is able to flourish within the next five years and reach those incredible heights.

 

 

 

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