Rockets see a huge future in video gaming
To get out ahead of the curve, Morey first to hire a specialist in the field
Last year, the Rockets became the first sports franchise in North America to hire an executive to the front office to specialize in eSports, the globally popular and recently lucrative world of competitive video gaming.
The move fit their style: spotting a trend, relying on young talent, taking a costly risk and identifying with a fast-paced system.
Owner Leslie Alexander, president Tad Brown and general manager Daryl Morey found their franchise star in Sebastian Park, a 25-year-old Yale graduate in cognitive science and a gaming veteran. Park used to run a sponsorship division at domain registrar NameCheap in Los Angeles and a professional gaming team. As the Rockets’ director of eSports development, he is in charge of figuring out how an NBA team can become a gaming luminary.
“I would not be here if I didn’t think that eSports has the potential to be a major sport,” Park said. “Not something that’s a flash in the pan, but that lasts long enough for your children and your children’s children to enjoy.”
The most popular online game, League of Legends, attracts 27 million users daily and 100 million monthly. Anyone can log on and join up with others for five-on-five contests. It is like pickup basketball — except with mythical characters, super powers and fights to the death for the sake of destroying the enemy’s base.
“The general sense is that it’s the next big sport,” said Morey, who is on the board of Major League Gaming.
The new big three
He was fresh off a weekend at the MIT Sloan Sports Analytics Conference, which featured two eSports panels that highlighted the concussions and diminishing ratings in football and the lengthy games in baseball.
“All the trends are in the right direction for eSports, basketball and soccer to be the dominant sports down the road,” Morey said.
Morey predicted that kind of dramatic shift will take 10 to 30 years. He sees a logical cross-pollination between pro basketball and gaming.
“We have expertise in running franchises, selling sponsorships, connection to Asia, which are important in eSports,” he said. “There’s a strategic linkage between eSports and us at a higher level. We know that the franchise model in sports is a better model than people think.”
Competitive video gaming generated $200 million in 2014, $500 million in 2016 and is projected to surpass $1 billion by 2019, according to Newzoo.
The proliferation of professional gamers and teams has filled arenas and earned as many as 43 million viewers to watch them play via streaming online videos. The audience has transformed a hobby into a lucrative industry thriving off spectators, which is not so different from traditional sports.
“The human condition is really conducive to wanting to watch expertise,” Park said. “Part of the reason is we’re so enamored with artists and writers and sports is because, wow, these guys are really freaking good at something.”
Last month, the NBA announced a partnership that will create an eSports basketball league. Teams had made their own gaming investments before. The Philadelphia 76ers, Memphis Grizzlies, Sacramento Kings, Washington Wizards and Golden State Warriors funded pre-existing eSports teams. The Rockets want to do more than that.
“It would be intellectually lazy for us to say lets just throw money at the top team,” Park said. “That wouldn’t add value to the space. That’s not going to move eSports in another direction. That would just be another deposit of money into the eSports black hole of investing.”
Things changing fast
Park said starting a new team, league or game is more appealing. It also would be more unpredictable trying to innovate in a sector that changes so rapidly.
“Things that I knew were true a year ago are not true anymore,” he said. “We come across as vague right now because the space is changing quickly and we don’t want to find ourselves flat-footed.
“If you told me a year ago that not only were there going to be new NBA teams investing in eSports but also the idea of working for the Houston Rockets in Houston, I (would say) check yourself into a mental asylum.”