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Originally published Sunday, August 31, 2014 at 5:13 PM

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Video games hit the big league, with big money and real crowds

The games industry has set its sights on the lucrative realm of professional video-game competition, widely known as esports.


The New York Times

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SEATTLE —

A bewitching creature — half woman, half deer — battles a shaman and a sentient tree. Lightning bolts strike. Weapons explode. Nasty spells are cast.

The video game “Dota 2,” like so many across the Internet, transports teams of players from their bedrooms to a verdant virtual world where they smite each other through keyboard and mouse clicks. Except on this sunny day in July, every attack and counterattack by a five-person team set off an eruption of cheers — from the more than 11,000 spectators crammed into Seattle’s basketball arena.

The contestants were gunning for a big piece of the $11 million in prize money, the most ever at a games tournament. And the game’s developer, Valve, moved another step closer to securing gaming’s legitimacy as a major-league spectator sport.

Having upended the entertainment world — global revenue for games is $20 billion higher than the music industry’s and is chasing that of the movie business — the games industry has turned its ambitions toward the lucrative world of professional video-game competition, widely known as esports.

The signs of success mirror the achievements of major sports. Game tournaments sell out giant arenas, and some attract at-home audiences larger than those of top traditional sporting events. Madison Avenue’s highest fliers, like Coca-Cola and American Express, have lined up as sponsors. Prize money has soared to the millions of dollars, and top players earn six- or seven-figure incomes and attract big and passionate followings, luring a generation of younger players to seek fame and fortune as gamers.

Last year, the State Department began granting visas to professional gamers, under the same program used by traditional athletes. This fall, Robert Morris University in Chicago will dole out more than $500,000 in athletic scholarships to gamers, the first of their kind in the United States, and Ivy League universities have intercollegiate gaming. Last week, Web giant Amazon announced it was buying Twitch, a hugely popular video-streaming service used by gamers, for $970 million in cash.

“This stuff is expanding out of control,” said James Lampkin, a product manager for ESL (for Electronic Sports League), one of the biggest esports leagues, which had 73,000 attendees at a four-day tournament in Katowice, Poland, in March. “We have no idea what the limits are.”

Millions watching

Game competitions have been around for decades, but what was happening at that arena in July would have been unthinkable, even laughable, only a few years ago. As broadband Internet access and free-to-play games have spread, gaming competitions have multiplied in size and frequency around the world, going beyond early strongholds like South Korea.

At the Seattle event, cheering fans, many dressed in costumes to look like game characters, hoisted national flags to show support for their favorite teams. Commentators, known as casters, offered play-by-play. Confetti rocketed into the crowd when the winners were crowned.

More than 70 million people worldwide watch esports over the Internet or on TV, according to estimates by SuperData Research. South Korea even has a TV channel devoted largely to esports. A championship tournament in October for “League of Legends,” an arena battle game, streamed around the world, attracting 8.5 million simultaneous online viewers at its peak — the same as the peak viewership for the deciding game of professional hockey’s Stanley Cup Finals in June. This year, the “League of Legends” championship is expected to attract 40,000 to 50,000 attendees to a soccer stadium in Seoul, South Korea.

As the fan base and money in esports have ballooned, multiple independent game leagues have emerged, including ESL and Major League Gaming, that collectively put on dozens of competitions a year. Game publishers host events, too, seeing irresistible opportunities to promote their games.

One of the most ambitious publisher-led efforts is from the creator of “League of Legends,” Riot Games, which operates leagues around the world. For the past two years, another publisher, Activision Blizzard, has put up $1 million in prize money for a championship for its combat shooting game “Call of Duty” in Los Angeles.

“I don’t think we’ve ever seen the opportunities for esports as promising as they are today,” said Robert A. Kotick, chief executive of Activision Blizzard.

Big money, deep access

The roots of esports trace to the 1990s with the advent of fighting and shooter games like “Street Fighter” and “Doom.” Tournaments in those days were humble affairs, held in crowded hotel ballrooms in front of a few hundred people. Even the winning players often lost money after travel and hotel bills.

Even with the number of participants mushrooming, the Internet has forged a tighter link between fans and players than almost any other sport. Twitch, a website started in 2011, lets players stream video of their playing sessions over the Internet from PCs and consoles.

More than 55 million people visited Twitch in July to watch and interact with one another. The site has also become a lucrative source of revenue for gamers, who can make money through a mix of advertisements, subscription fees and donations from viewers.

“Broadcasting to the Internet is our job, basically,” said Seth Abner, 19, a professional “Call of Duty” player, who streams his matches over a service operated by Major League Gaming.

Because professional gamers often practice on sites like Twitch, fans can get behind-the-scenes peeks at practice sessions by their favorite players. The more generous ones even invite fans to play a round with them.

“Imagine if LeBron James and Michael Jordan, in every practice and every live NBA game, had a GoPro camera strapped to their chest and they had an earbud where they can hear people ask direct questions and occasionally answer it when they’re playing,” said Dennis Fong, 37, an early professional gamer who is the new chief executive of Raptr, a social network for gamers. “That level of access is unprecedented.”

Prize money and slick producing have also added a dash of excitement to esports matches. The “Dota 2” tournament in Seattle in July took place in KeyArena.

On a stage at the front of the hall, two teams of five players sat in soundproof booths resembling greenhouses, a two-story screen projecting a view inside the game. Inside the booths, which are designed to prevent the teams from hearing details about enemy positions from the casters, players clicked their mice, barely moving in their seats. Fans roared whenever a team achieved a triple-kill, launched an ambush or executed another deftly coordinated feat.

Over loudspeakers in the arena, two English-language casters described offensives by the teams with the exuberance of Marv Albert during the NBA Finals.

The soundproof booths did not stand a chance against the roars from the crowd.

“You can still hear the ‘USA’ chants,” said Peter Dager, captain of a “Dota 2” team called Evil Geniuses, which is based in the United States and finished third in the tournament to a team from China, dividing up more than $1 million in prize money. “For a 22-year-old kid who lives at home, it’s very surreal.”

Marketing opportunity

For the companies with a stake in the video-game industry, the hope is that the huge audiences will attract more money from major marketers, which will in turn help elevate the production values of events.

Some of that is already happening. T-Mobile USA, the wireless carrier, sponsored Dager’s team at the Seattle tournament. Coca-Cola live-streamed a ”League of Legends” tournament to theaters in Europe and features the likenesses of game characters on soda bottles in South Korea.

“Gaming isn’t the kind of platform it was when we were kids,” said Matt Wolf, 45, a veteran of the games business who now leads Coca-Cola’s efforts to explore investments in gaming. “It’s a major mass-media platform that now has multiple forms of consumption.”

The draw for marketers is the audience: mostly employed men, 18 to 35 years old, a group that has become harder to reach with conventional TV advertisements. Major video-game competitions and online streaming sites offer companies new ways to find them.

The idea among game companies is that the marketing dollars from outside companies offer a virtuous cycle. More marketing money leads to better production values, which in theory will lead to increased interest in gaming. And the more people who become interested in gaming, the more money there will be to spend on the games themselves.

“Now, because games are run as continuous services where people can spend money as they play along, the game companies have bigger incentives to engage and entertain people continuously,” said Peter Warman, chief executive of Newzoo, a research firm that has studied esports.

Still, for the cycle to continue, the industry will most likely need to overcome some long-held opinions on games and gamers — in particular, that the skills involved are inferior to conventional forms of athletic excellence. When ESPN2, the cable sports channel, ran a show about the “Dota 2” tournament in July, Twitter was flooded with derogatory comments about esports being shown as a sport.

Lampkin of ESL said he wasn’t worried about such attitudes. The argument over whether professional gaming is a sport in the traditional sense, he said, is beside the point now.

“If you don’t want to call it athletics or sports, that doesn’t mean anything to me,” he said. “That doesn’t change the reality of the massive growth we’re seeing.”



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