Jonathan Easton takes a look at the incredible growth of the esports market and asks how the Channel can capitalise on the rapidly increasing interest
"I think that the penny is starting to drop,” says Stuart Jarvis, gaming business development manager at Westcoast. “Esports is not going away and it is only going to get larger over the coming years.”
It was not one, but two pennies that dropped in July as both Corsair and GAME saw major investments. The latter (as discussed further on Page 24) announced that Sports Direct – and with it the controversial figure of Mike Ashley – had bought a 26 per cent stake of the company, while the former had a majority stake bought by private equity firm EagleTree Capital for $525 million. The thing these deals had in common: esports.
Highlighting the potential of the ‘rapidly growing esports markets’, GAME made it clear that it was central to the agenda. Equally, EagleTree co-managing partner George Majoros Jr. pointed to the flourishing market. “The rise of esports and streaming has made PC gaming one of the world’s most dynamic industries,” he says.
But these deals don’t exist in isolation. They are largely indicative of what’s to come, believes TP Link retail sales director Lino Notaro. “Esports is, no doubt, currently the fastest growing trend in gaming,” he says. “I can foresee more and more blue chip firms wanting to get involved. This ‘niche hobby’ is now part of the cultural mainstream in the UK, and consequently it is able to deliver a large captive market and great brand exposure for new entrants.”
Esports presents a brand new avenue of potential revenue and interest, and huge organisations are already taking advantage, whether through acquisitions or sponsorships. Corsair itself believes that its acquisition is one in a long line of deals that will see companies get involved. “Massive brands such as Coca Cola and Pepsi already have well developed esports portfolios and it’s only a matter of time before more and more companies look to esports and PC gaming to engage with a whole new generation of customers,” says Harry Butler, PR and marketing communications director at the vendor.
That said, the UK is still playing catchup when it comes to esports. “The UK is actually still behind some of our European cousins such as Spain and Germany, not to mention America and Asia,” adds Notaro.
“The UK still has a huge untapped potential, but it’s not an overnight thing. ESL’s UK strategy for example is a very long term one. Despite continually achieving UK firsts on a regular basis, we’re still scratching the surface,” adds ESL UK managing director James Dean.
Being behind at this point isn’t necessarily a bad thing though, points out Butler, as it means there is ‘huge room for growth’ – in particular for retailers.
The big sentiment among the industry is that retailers will see success in this burgeoning market if they can give prospective purchasers hands-on experiences with the products that the pros are using. This gives specialist indie retailers the upper hand over online.
“The rise of esports and streaming has made PC gaming one of the world’s most dynamic industries”
George Majoros Jr., EagleTree Capital
“Indies may not be able to compete on price with etailers,” accepts Mark Laurie, marketing director at system builder, Utopia Computers. “But they can absolutely win on having gamers try the kit before they buy it. There’s no substitute for a hands on experience.”
“Specialist gaming retailers have an opportunity to attract casual or aspiring gamers, by providing the opportunity to use premium/professional gaming equipment which would not otherwise be available to them at home,” agrees Notaro.
The face of gaming retail is already starting to change to reflect this. GAME has its own Belong Arenas in over 15 of its stores. Each has a unique team name and emblem. These types of setup are a ‘great opportunity’ to try before you buy, thinks HyperX EMEA community manager Ben Malka.
“As a gamer myself, I need to be able to touch, feel and play with products before I decide to purchase them. By bringing the gaming experience in-store, gamers are able to immerse themselves in the experience. Not only can they play newly launched gaming titles, but they can also decide on which headset, keyboard or mouse is best suited to their comfort and accuracy, as well as the type of platform the peripheral is most compatible with, be it console, PC, or even mobile.”
There are potential pitfalls here though, with Yoyotech’s CK Kohli noting that ‘the challenge with creating high street gaming arenas is that in order to work, they need to be in the most expensive parts of the city with a concentrated population’. He adds: “It’s hard to see a new brand penetrating this market in competition against GAME.”
However, while there will always be enthusiasts, semi-pros and the like going to traditional retailers, for the Channel. ‘the model will be more like selling to professional sports as the market matures’, predicts SolarWinds senior director of community Dave Sobel. “Just like services would be required by a local football club or rugby team, an esports organisation will need similar hardware, software and services – but likely with significantly higher technical demand,” Sobel says.
For now though the penny will continue to drop in the UK as more money is invested in and generated by esports. The market presents serious opportunity and potential for the Channel and it will be a growing force for years to come.