The emergence of esports

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A restaurant with people playing the newest video game console might not be a typical night out for most, but for patrons at PlayerzZone in East Rochester it is an ideal evening.

“I really wanted to try and bring something different to Rochester that mixed a bar and restaurant section with a video game section and make it more like a community,” says Steven Drexler, owner and president of PlayerzZone, an esports lounge and restaurant.

PlayerzZone is just one example of Rochester’s connections to the emerging industry that is esports, or electronic sports, the world of organized, competitive video gaming. These contests often are multiplayer events between professional players. Competitions take place online or in person at what are called “LAN (Local Area Network) competitions.”

At the college level, Rochester Institute of Technology, Nazareth College and St. John Fisher College have begun including esports. Some institutions integrate esports into their athletics programs, while others have clubs and programs housed within academic departments.  

The Strong Museum of Play’s planned 90,000-square-foot expansion includes its Video Game Hall of Fame and Level Up, which aims to position visitors as the protagonists of a video game, allowing them to create personalized avatars and set off on quests. The museum predicts that annual attendance will grow from 600,000 to 1 million visitors a year after its expansion.

On the entrepreneurial front, Splyce is a Rochester success story. The esports company was acquired by Toronto’s OverActive Media Group in 2019, four years after its launch, for an undisclosed amount. The Rochester office closedlater in 2019.

Cash draw

Large prize purses, sold-out stadiums, screaming fans. Just two decades ago these were words and phrases that were associated only with the largest professional sport competitions like the Super Bowl, NBA Finals, or perhaps Wimbledon. Today, these are words that also describe esports.

While traditional sports were sidelined during the global COVID-19 pandemic due to social distancing and quarantine requirements, esports grew. According to Esports Earnings, a website that tracks the prize pools of competitions worldwide, 2021 boasted the largest competition in history with the game Dota 2 that had prize pool of over $40 million. Total prize pools for the year topped $200 million over 4,000 total competitions.

Prize pools are not the only facets of esports where large sums of money are involved. The esports company FaZe Clan last fall announced plans to go public with a $1 billion valuation by merging with a special-purpose acquisition company, or SPAC. The merger is expected to close by June 30.

The return on investment for brands investing in leading esports is 4X, according to a report from Nielsen, an American data and information firm that deals with entertainment, in collaboration with Fnatic Esports. The audience base is growing at a rate of 10 percent to 20 percent each year with younger generations being the “most engaged.”

Since 2014, the global audience for esports has more than doubled and revenue has increased by more than 500 percent, according to Newzoo, a provider of games- and esports-related analytics..

Opportunities on campus

Esports clubs and programs at colleges provide students with competitions like those of a traditional athletics team. Nationally, reports suggest that roughly 200 universities have some type of esports program with $15 million in related scholarships.

RIT has a student-run esports organization housed at the Golisano College of Computing and Information Sciences. The club fields teams in 19 different games and has won five national championships and earned more than $70,000 in scholarships since its inception in 2016, says Chad Weeden, director of esports at RIT. 

Nazareth’s facility features gaming computers, televisions and lounging space. (Photo: Nazareth College)

“It’s all about allowing them to be as successful as possible,” he says.

Club members also can find areas to best use their skills like broadcast production, live match commentary, marketing, or managing a team. RIT Esports is on track to become one of the largest clubs on campus, the club says. 

“These are real career opportunities and we’re giving our students these opportunities by being a part of the program. Each group that comes through has the opportunity to apply their technical skills that’s defined by their major,” Weeden says.

In recent years, both Nazareth and St. John Fisher have also invested in esports and video games.  In 2020, Nazareth unveiled its new esports training facility featuring eight gaming computers, televisions, and lounging space to follow competitions. Most of its competitions in the Eastern Collegiate Athletic Conference are against more than 50 different colleges and universities. The Nazareth esports also compete in local in-person contests.  

St. John Fisher followed suit last year with its gaming lounge featuring 12 gaming computers, televisions with new consoles, and lounging space. The Gaming Lab, which has 62 members, brings students together to play online or engage in tabletop games such as Dungeons & Dragons throughout a semester.

The big leagues

Then there’s Splyce. A 2015 venture of RIT graduate Marty Strenczewilk, Splyce was an entrant into professional esports. Excell Partners, a Rochester-based fund that invests in high-tech startups in New York, was among the first investors. It also played a hand in securing brand deals and partnerships for the venture.

Splyce competed in many popular esports titles earning over $3 million in prize money, according to Esports Earnings. It was acquired in 2019 by Toronto-based OverActive Media, which owns three esports teams that compete in leagues for Overwatch, League of Legends, and Call of Duty.

Great Lakes Gaming, a company started by Ben Garvey, another RIT graduate, launched with the intent of opening brick-and-mortar gaming lounges. It transitioned to broadcasting esports events during the pandemic.

“In a way, the pandemic showed us a new business model that is a lot better,” Garvey says.

Great Lakes Gaming recently announced it would be opening a 3,400-square-foot gaming facility on the 22nd floor of Innovation Square, the former Xerox Tower. The business will be modeled after a country club where people buy memberships to use the facilities, including 12 high-end PC stations, two private streaming booths, three console setups, and a café with fresh food and drinks. Great Lakes Gaming plans to open its gaming lounge on April 20.

“No one else has ever done this, according to our market research, so it was a new concept,” Garvey says.

Nerdvana, a Texas-based video game and board game restaurant, announced it would be opening its first location in New York at Strong’s Neighborhood of Play at Strong. 

“The museum started collecting video games seriously around 2008. We recognized the way that they changed how people play and wanted to be on the cutting edge to preserve and honor that history” says Shane Rhinewald, spokesperson for the Strong Museum of Play.

Strong began inducting games into its hall of fame in 2015 and hopes to continue “celebrating the importance of electronic games and communicating to the public what makes them great.”

Promising outlook

The pandemic has played an instrumental role in increasing the popularity of esports. The Nielsen Fnatic report found that the global consumption of live game streaming increased by 69 percent in 2021, largely driven by COVID restrictions. Nielsen expects the esports industry to be worth more than $1 billion by the end of 2022. A market analysis released in January by Allied Market Research predicts a compound annual growth rate of 17.5 percent from 2021 to 2030, with the industry reaching $4.75 billion by 2030.

The Nielsen Fnatic report compared viewership for last year’s League of Legends World Championships with the NBA final. More than 30 million concurrent viewers streamed the esports battle while 9.9 million viewers in the U.S. watched the NBA broadcast. (Concurrent viewers are those who watched a program or media stream at a specific point in time.)

In Rochester, the interest in esports is likely to grow as well. Already, area high schools are competing in the High School Esports League. Brighton, East Irondequoit and Gates-Chili school districts, and Monroe 1 BOCES, are among those participating in the league.

Some experts suggest that forward-thinking schools, universities and colleges will find ways to integrate gaming into programs to attract a broader swath of students.

“I think there’s room for growth in terms of esports at a collegiate level,” Weeden says. “In general, there’s a lot of room for growth across the board.” 

Mackenzie Kenyon is a Rochester Beacon intern. He is a senior at St. John Fisher College. The Beacon welcomes comments from readers who adhere to our comment policy including use of their full, real name.

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