World’s fastest growing sport coming to Melbourne later this year

eSports World’s fastest growing sport Melbourne
The Melbourne & Olympic Parks precinct is set to host the 'Melbourne Esports Open' in September this year.

The dawn of eSports is truly upon us, with the Victorian government announcing it is officially backing the “Melbourne Esports Open” to be held at the Rod Laver Arena, Margaret Court Arena and the Melbourne Park Function Centre – usually the scene of tennis tournaments, roadshows and music concerts.

Later this year in September, tens of thousands of video game aficionados will descend on the venue to watch the eSports tournament that is expected to attract the world’s best gamers and thousands of visitors from across Victoria and overseas.

According to industry analysts, the state of Victoria alone hosts around 560,000 esports fans which includes both those who play games, but also, spectators that are far more interested in watching professionals compete rather than playing games competitively.

Globally, eSports now attracts around 350 million regular viewers and this number is growing year-on-year as games become more realistic, more engaging and more accessible to a wider audience.

The dawn of new-age gaming

The Melbourne Esports Open is the equivalent of the world’s best tennis players coming to town, only they will be wielding gaming controllers and keyboards rather than tennis rackets.

Hotshot teams are set to include the likes of ORDER, a Melbourne-based team that specialises in ‘Counterstrike Global Offensive’ and ‘League of Legends’ (games that are likely to feature highly at this year’s Melbourne Open), and who will be looking to take part in the event.

The team signed a partnership deal with ASX-listed Esports Mogul (ASX: ESH) in March with the two entities looking to create a vibrant “eSports community” in Australia.

Esports ORDER
Australian eSports team ‘ORDER’.

Esports Mogul says that not only is the ORDER partnership a novel way to drive user acquisition, but the deal is also expected to “reap rewards for both parties” and will “deliver a unique user experience”.

In response to this week’s news, Gernot Abl, managing director of Esports Mogul spoke with Small Caps about the Melbourne Esports Open.

“This is a fantastic outcome for Australian eSports. This multi-year deal will benefit all verticals within the esports industry and will facilitate further significant investment in the sector,” he said.

Esports Mogul managing director Gernot Abl
Esports Mogul managing director, Gernot Abl.

“High-profile public events like this help to raise awareness of gaming in general and as a new spectator sport that offers something for everyone,” he added.

The concept of Esports is rather new, but over the past 5-10 years, the activity has grown from nowhere to become one of the highest paying endeavours any “sportsman” (or woman) can hope to achieve.

Commercial perspective

To put the commercial magnitude of eSports into perspective, the total prize money purse for this year’s Australian Open was A$55 million with both men and women singles winners pocketing A$4 million each.

In the world of golf, Patrick Reed, the most recent winner of the most highly acclaimed golfing tournament, the Masters Tournament in Augusta, reportedly scooped US$2 million (A$2.6 million).

In comparison to these heart-pumping feats of physical fitness, the largest prize pool in eSports has become the annual “The International” which pits 18 teams and around 90 players into battle playing Defense of the Ancients (acronymed as Dota 2), a free-to-play multiplayer “online battle arena video game” developed by Valve Corporation.

Prize money at “The International” hosted in Seattle in the US, considered the largest event of its kind, has ballooned in recent years. In 2011 and 2012, its organiser Valve paid out US$1.6 million in prize money for the tournament’s winners.

eSports DOTA 2 tournament 2017 International 5
The fifth annual Dota 2 International tournament

The prize money pool has climbed year after year to the extent that last year’s International 7 event offered a total prize pool of US$24.6 million (A$32.3 million) and netting the eventual winners (Team Liquid) US$10.8 million in prize money.

This year’s purse is tipped to exceed US$30 million with further growth likely in the following years.

Valve is also responsible for other cult-classic games that have captured the imaginations of millions (if not billions) of gamers and spectators, such as Counter-Strike, Half-Life and Left 4 Dead.

Valve operates an online gaming hub called Steam, where gamers can come together to download games, play against each other as well socialise online – it is a quickly-growing sub-culture of the Internet which is attracting ever more people. One of the most intriguing aspects of this trend is that it’s not just kids that are flocking to eSports.

This year’s Melbourne Open promises to attract spectators from all age groups including women.

September’s eSports event

This year’s Melbourne event is set to become “Australia’s biggest celebration of eSports”, according to the Victorian government with 10,000 people tipped to attend each day on top of a suite of top professional teams in action.

The event is expected to include a packed weekend schedule of top-level professional eSports competition in arenas complete with giant video screens, full concert lighting and concert-level audio production.

Esports Mogul ASX ESH gaming team ORDER

The Andrews Labor Government secured the inaugural Melbourne Esports Open thanks to funding from the Major Events Fund, which was boosted by $4.5 million in the latest budget announced earlier this year.

Visit Victoria has partnered up with TEG Live and ESL, the world’s largest independent esports company, to stage the event for the next 5 years. According to initial estimates, the Melbourne Esports Open is expected to generate up to $25 million for the Victorian economy over five years and is likely to boost spending in and around the venue much like the tennis Australian Open typically does.

According to the Victorian government, the event has been scheduled for the first weekend of September 2018 – the bye weekend prior to the AFL Finals Series.

“The Melbourne Esports Open is a massive scalp for Victoria, tapping into one of the world’s most popular sectors of the sports and entertainment industry. We’re turning Melbourne Park into every gamers dream – giant screens, the best talent and latest technology,” said Mr John Eren, minister for tourism and Major Events in the state of Victoria.

“With millions of gamers both at home and abroad, it’s time to bring all the action and fanfare of esports to our backyard,” said Mr Eren.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.