Magic’s foray into esports helps make gaming big business
Planning to enter the world of competitive video gaming in May, the Orlando Magic will soon select the players for their new franchise.
The NBA 2K esports league, which includes the Magic Gaming team, will conduct a draft lottery today to learn the order of selection for its 17 franchises — which will add to the business reach of the NBA and boost exposure for the professional video game community, which enables thousands of players to earn a livable wage.
Sponsors, once made up exclusively of video game-related companies, now include mainstream brands such as Coca-Cola, Audi and Comcast Xfinity. The reason for the shift is simple, said Mike Redlick, associate chairman of University of Central Florida’s DeVos Sports Business Management Program.
“It’s the eyeballs,” said Redlick, who has been chief marketing officer with the NFL’s Cleveland Browns and San Francisco 49ers, adding that the NBA has a built-in
way to potentially grow its sponsorship. “Most teams will go to their current partners and use esports as an upsell.”
Esports continues to grow into a big business, with competitors’ jerseys becoming walking billboards for brands that shell out big bucks for advertising. Some players make more than $1 million a year in tournaments and sponsorships.
Fans are drawn to the allure of earning a living playing video games, said Emre Kutsal, president of UCF’s Gaming Knights club.
“People admire them because they want to emulate those skills,” he said. “Just like a pro basketball player might entice people to try to go pro in basketball.”
As more young people tune in to watch professional video game players battle in games such as Overwatch, League of Legends or Fortnite, businesses see dollar signs. In August, a Call of Duty tournament at Amway Center drew thousands of fans, many of whom paid more than $50 for a ticket.
“When you have big companies involved and getting into it, it says something about the industry and that people are taking it more seriously,” Kutsal said. “It’s something people want to see. It’s not just a grassroots thing. It’s legitimate.”
Last year, the NBA announced that 17 of its teams would participate in the first season of the league’s NBA 2K18 league.
Teams will have about three weeks to plan their picks after the 1 p.m. lottery at Madison Square Garden in New York. Like the NBA, the 2K league will draw ping-pong balls randomly to determine draft order.
The draft will also be at Madison Square Garden, at 1 p.m. April 4.
Each team, including the Orlando Magic, will select six players who will receive a salary of $32,000 (except for first-round picks, who will make $35,000), be housed by their teams and practice together.
“It’s a great opportunity to dip our toes in the esports water through a sport we understand,” said Ryan DeVos, director of Magic Gaming, the name given to the esports squad. “It helps us start to digest a pretty dense world. It’s that first step through the door.”
To continue its success, the league must hype esports and push viewers to broadcasts, DeVos said.
“It’s crucial to have that viewership there,” he said. “If you don’t, nobody will want to invest in it.”
The league has pared a field of 72,000 gamers to a draft pool of 102.
The draft “will be a milestone moment for our league,” NBA 2K League Managing Director Brendan Donohue said.
As more businesses support the leagues, more opportunities can open up for young gamers. Bryan Castillo, 18, posts game-play videos on his YouTube page and hopes eventually to grow that into a business.
“I’m interested because I’ve always played video games as a child,” he said. “Growing up, it’s always been something I was talented at. Now, seeing it can help make careers and change people’s lives, it became something I wanted to be a part of.”
The esports industry will target non-gamers next, said Scotty Tidwell, a consultant to esports companies and former CEO of Orlando esports business Avyd.
“The avid fans, the players, the gamers, they are sold,” he said. “They are into these leagues, no matter what. Now it becomes, can we increase the casual fan base?”
In 2014, the streaming site Twitch, which is dominated by gamers playing live online, sold to Amazon for $970 million.
It was one of the first major moments in competitive gaming, one that illustrated how popular it had become.
The growth of esports has happened as people interact online more. What that has created is more potential for companies to expand their reach through personalities, Tidwell said.
The result is a greater chance of attracting investors.
“We live in a digital world,” he said. “Esports and gaming, it’s very social. Being social allows you to amplify your message. I can pay to have a brand on TV, but how many people will share that brand?”