Telecom firms pin hopes on ‘Esports’ videogame gladiators

Marcos Ochoa has just landed the dream job for many young Europeans: he is being paid to play video games.

The 27-year-old Spaniard, whose internet nickname is “Aeroz”, is a rising star of the Esports, or video games competitions that are played online or even in sports arenas. With championships watched by crowds of fans similar to traditional events like the NBA basketball finals or football World Cup, telecoms firms see Esports as a way to lure younger clients and brand themselves as digital companies rather than merely providers of phone services. In April, Ochoa and four teammates signed a deal to become Vodafone’s official squad in Counter Strike, a game where the player can tackle terrorists trying to take hostages or carry out a bombing. Vodafone, along with European rivals Telefonica and Orange, are investing in building up the industry by creating teams, TV channels or leagues.

With global revenues of $500 million (£388.5 million) in 2016, Esports remain financially tiny compared with the combined $450 billion income of the film, television series and sports industries in which those firms already compete for the best distribution rights.

Ochoa earns in a month what a top football player might make in an hour, and the telecom firms still need to build a business model able to bring in significant revenue from young people accustomed to consuming online products largely for free.

But according to data compiled by JP Morgan, the number of Esports fans is forecast to grow more than 50 percent by 2019 to 500 million people globally, generating revenues of $1 billion. Industry experts see a potential for a $10-20 billion market eventually.

Already numbers are expected to challenge audiences even for American Football’s premier event, consultancy Deloitte said.

“This year, an Esports event could get more audience than the Super Bowl and in a near future land more revenue for image rights,” Deloitte said in a report published last month. Spain is a leading market in Europe, offering more of the fast fibre optic connections which video gamers and spectators demand than Britain, Germany and France combined as well as easy access to millions of players in Latin America.

Its Liga de Videojuegos Profesionales (LVP), or League of Professional Video Gamers with 60,000 daily viewers, is the world’s third-biggest after the United States and South Korea.

It was bought last year by Spanish sports rights firm Mediapro, which also owns the La Liga football rights, and is sponsored by Orange.

Telefonica, meanwhile, launched in January on its premium television platform Movistar+, a 24 hour channel broadcasting the best competitions and has created its own team, Movistar Riders, which competes with Vodafone’s G2, in which Marcos Ochoa plays. None of the three companies has disclosed how much they have spent so far in Esports but Ignacio Martinez, who oversees Vodafone’s Esports strategy in Spain, says it is the first time since he joined the industry 15 years ago that he sees telecoms companies rushing into a new market this way. Martinez says his two squads which play Counter Strike and League of Legends receive support from fitness coaches, psychologists, physiotherapists, project managers and technical directors, like any professional football team.