SINGAPORE (Oct 29): In August, the Asian Games 2018 in Jakarta had a special showcase. The 5,000-capacity BritAma Arena, normally a venue for Indonesia’s top basketball league’s games, was the stage for quite a different kind of game. Speed, reflexes and dexterity were on display and the players donned team jerseys. But they were also rigged out with headphones and microphones; the battles were virtual, rather violent and high fantasy, fought among medieval soldiers, magicians, maidens and monsters.
The competition was in the category of esports, or professional multiplayer video gaming, which has moved into the mainstream. Like the graphics in the games, the numbers are eye-boggling. According to gaming market intelligence agency Newzoo, the global esports market has doubled between 2015 and 2017 to reach US$655 million ($904 million).
In China alone, there are nearly 620 million esports gamers. The industry’s events sponsorships, ticketing, advertising, media rights and related businesses generate some US$38 billion in revenue a year. The industry is backed by the likes of Tencent Holdings, which has said it will invest RMB1 billion a year in esports. The company has co-published, with Garena, the game Honour of Kings, which boasts 200 million players each month.
The Jakarta event was a demonstration, or staging for the 2022 Asian Games, when medals will be up for grabs and count towards a country’s medal tally. That, in turn, seems to be yet another staging for 2024, as esports enthusiasts are lobbying for gaming to be an Olympic event.
Video gaming is a massive market that has been boosted in recent years by the availability of mobile games. Newzoo estimates there to be more than 2.3 billion active gamers in the world — that is 30% of the global population, or nearly one in three people, actively playing video games. They will spend nearly US$138 billion on games this year, or 13.3% more than last year.
Again, China is the world’s largest games market, with spending expected to be nearly US$38 billion this year. Nearly all of the gamers who pay to play will spend money on in-game items, or virtual goods. The US ranks as the second-largest games market, with some 179 million gamers who will spend US$30.4 billion on games. The next largest markets are Japan, South Korea, Germany and the UK. Singapore ranks as a distant 32nd market, with 2.9 million gamers spending $318 million.
Most of the gamers in Singapore, or two-thirds, are male. Half of them, both male and female, are aged between 21 and 35 years old. This demographic is not very different across the world.
Video games have been big money for the games’ developers and publishers as well as related businesses. Local entrepreneur Tan Min-Liang made his name, and fortune, with gaming hardware; his company Razer was listed on the Stock Exchange of Hong Kong in an HK$4 billion IPO last year.
Now, companies across sectors, other investors and the gamers themselves are gearing up to get a piece of the action. As we report this week, Singapore Telecommunications is eyeing the potential that the gaming and esports industry holds. From data services to e-payments, the telco has a lot to offer gamers and game developers, it says. Indeed, corporates such as Singtel and Mastercard have cottoned on to the potential that esports and gaming can bring to their business — particularly in the form of large numbers of young, willing-to-spend and engaged consumers.
Meanwhile, the players subject themselves to gruelling training sessions, with the aim of winning the prize money offered at esports tournaments. The event that Singtel recently organised, the PVP Esports Championship, had a prize pool of US$300,000. There are also opportunities for players to score endorsement deals. Unfortunately, esports is still a nascent field and the deals are not anywhere as lucrative as those tennis pro Serena Williams, for example, has. According to Forbes, Williams is the highest-paid female athlete, with US$18.1 million in earnings this year, out of which only $62,000 was prize money.
Still, the lure of such success in the esports arena is apparently driving many young people to choosing professional gaming as a career, even though there are not that many perks. One player compares the monthly allowance he gets while training as part of a team full time to the allowance that full-time National Servicemen receive. Just as in physical sports, the gamers also seem to burn out quickly: One 30-year-old is already “retired” from gaming and has moved on to other businesses within esports.
There is also a fine line between a professional esports career and an addiction to video games. The former seems glamorous while the latter has spawned numerous studies on the negative impact gaming has on health, been criticised for its ill effects and drawn demands for accountability from game developers and tech companies. It seems the only difference between the two is whether there is money to be made.