RISE OF THE CYBER ATHLETES
E-sports takes off as a professional game in Asia with venture capital pouring in but returns are slow to arrive
event in Moscow, Russia, on May 13. a team-based strategy game, generates plenty of enthusiasm among Asian gamers.
But it should be taken into account that some of the largest investments in 2014 were an anomaly. For example, South Korean game company CJ Games raised $500 million.
“Venture capitalists want a large customer base, a large number of registered users, even if platforms are losing money right now,” says Guan Wang, CEO of Ali Esports, which is part of Ali-sports, a subsidiary of e-commerce giant Alibaba. He adds that platforms are now exploring a self-sufficient business model, rather than relying on outside funding.
Despite all this money floating around, the e-Sports industry is still in its infancy. There are great expectations that it will generate more and more revenue, however.
Brokerage firm Industrial Securities estimates that by next year, China will have an e-sports audience of 148 million players, up from 48 million in 2015, when the whole industry was worth $4.2 billion.
Despite the slew of initial losses, many think there is a huge opportunity for investors to make handsome returns through channels such as merchandising, advertising, events, ticket sales and even lotteries.
“We can’t speculate as to the exact reason why venture capitalists are investing in Asian e-sports platforms and tournaments. That being said, we believe that e-sports continually shows phenomenal growth in the number of players and spectators,” says Paul Chan, chief marketing officer at Hong Kong Esports, which owns a professional Hong Kong-based gaming team of the same name.
“We feel that an industry with such large-scale growth of active and engaged fans as e-sports is always a good place to invest, as eventually various different products and services can be offered to those fans.”
And it is not hard to see why the whole industry is becoming hugely popular. China, for example, has a large population and a high penetration of both internet and mobile phones.
“I see people who are aged 40-something or more playing e-sports on mobile phones. Video platforms don’t earn money in China.
In addition, e-sports is generally gaining the support of authorities. In China, for example, the General Administration of Sport of China says it would work actively on the registration of professional gamers.
Even without prize money, professional e-sports athletes are already getting paid handsomely, sometimes even more than athletes in more conventional sports.
“Pro-gamers, I’m saying top progamers here, they earn a lot of money. Top gamers make the same amount as baseball players in South Korea, an incredibly popular game,” says Lim.
Depending on the game, professional players can earn a minimum of $50,000 per year and for the best of the best, the sky is the limit.
“This is without factoring the money they make on the side from being on TV commercials, advertisements. It is exactly like sports,” says Lim.