Irvine-based Blizzard Entertainment Inc. and Kingston Technology Inc. in Fountain Valley are at the forefront of one of the hottest trends in the technology industry that’s attracting stadium-size crowds to venues across the globe and millions of online viewers.
The players and fans go to arenas for a different kind of action than football or basketball, though. They play and watch video games.
ESports is a booming segment of competitive gaming that’s going mainstream, a shift made evident by the rise of corporate backers, the introduction of college scholarships devoted to hard-core gamers, and the increasing ability to obtain work visas in the U.S. through the mastery of a joystick, controller or keyboard.
The increasing popularity of the niche is helping video game maker Blizzard create new revenue streams that have offset significant losses in the subscriber base for its “World of Warcraft” franchise over the past few years.
It has also boosted Kingston’s HyperX brand of gaming accessories, such as headsets.
Blizzcon
Blizzard—which posted $1.72 billion in revenue last year and operating income topping $756 million—is in the process of organizing its most elaborate gaming competitions to date, pitting the best of the best in a series of finals that will take place Nov. 6 and 7 at BlizzCon, the company’s annual fanfest at the Anaheim Convention Center.
The stakes at the World Championship and Grand Finals are high.
Qualifying teams around the world will vie for a cut of $4.7 million in cash and prizes and the crowning title in four distinct games: “World of Warcraft,” “StarCraft II,” “Hearthstone: Heroes of Warcraft,” and “Heroes of the Storm.”
“While gameplay always comes first, we’re also committed to entertaining our audience by creating and sponsoring vibrant tournament environments that showcase the magic of competitive gaming,” said Kim Phan, Blizzard’s senior manager of eSports.
Kingston is one of the biggest eSports sponsors and will likely have a few players or teams competing at the BlizzCon finals. The world’s largest memory products maker for computers and consumer electronics, with estimated revenue of $5.9 billion last year, sponsored its first professional squad about five years ago when the sport was barely a blip on the U.S. gaming radar, although its history dates to the late 1990s in South Korea with competitions largely devoted to Blizzard’s “StarCraft” franchise.
Kingston, which recently began branding its HyperX gaming line of products and accessories separately from its commodity storage products, now sponsors global tournaments and about 30 teams.
“We have realized over the last two or three years that we really needed to pay attention to this fantastic business opportunity and exciting market that was right under our nose,” said Mark Leathem, Kingston’s vice president of corporate communications.
New York-based SuperData forecasts the eSports market will generate more than $610 million in revenue this year, with corporate sponsorships accounting for about 18% of that, or about $111 million.
The market researcher estimates that the sport has a global audience of about 134 million and growing, thanks to the incredible popularity of YouTube’s game channel and of twitch.tv, the world’s largest live-streaming site for game content that attracts more than 62 million unique monthly visitors.
The demographic shift to online platforms pushed Kingston to launch its own HyperX YouTube channel in 2009. The channel is devoted largely to its eSports teams, game demos, tips, and computer enhancements to improve gameplay and system performance.
Bios of eSports players, highlights and Q&As are popular with viewers who want to know more about their favorite stars, similar to the traditional sports world and its fandom.
“We bring those teams and those personalities to the audience,” Leathem said. “We’re building brand awareness.”
The HyperX channel, which publishes four to eight videos per month, has more than 215,600 subscribers.
Decade in the Making
Thousands of tournaments have been devoted to Blizzard games since the company held its first major eSports event, the Blizzard Worldwide Invitational, in January 2004 at the COEX Convention Center in Seoul, South Korea. The event drew players from Asia, North America and Europe.
Phan at Blizzard said, “We see huge potential in this space.”
Blizzard will host more than 10 tournaments this year for it’s free-to-play collectable card game “Hearthstone,” which has amassed more than 30 million players since its March 2014 release.
The game, a top-viewed title on Twitch, has developed into a “premier fixture in the competitive gaming scene,” Chief Executive Michael Morhaime told analysts on a recent conference call.
That includes formal tournaments and community-driven events where “Hearthstone” fans organize online get-togethers.
More than 1,300 of the meet-ups have been held around the world this year, some providing a chance to secure a spot at the BlizzCon championship.
The company also is prepping for its 2015 Heroes of the Storm Americas Championship on Sept. 15 and 16 in Las Vegas, where teams from the Americas, Australia, New Zealand and Southeast Asia will compete for a share of the $100,000 purse.
Blizzard targeted college students with the debut of its first major competition for “Heroes of the Storm,” a free-to-play title that features characters from its Warcraft, StarCraft and Diablo franchises.
The Heroes of the Dorm finals, where the University of California-Berkeley took down Arizona State University, was broadcast live April 26 on ESPN2. The winners received free tuition for the remainder of their schooling.
The college circuit is ripe with budding prospects and emerging pro gamers, and academia has taken notice.
Robert Morris University Illinois in Chicago last year became the first college to offer an eSports program and recently introduced the first varsity eSports complex in North America.
The student athletes, who are celebrated at pep rallies and receive scholarships akin to the school’s traditional sports programs, compete in “Hearthstone,” Riot Games Inc.’s “League of Legends” battle arena game, and Valve Corp.’s “Dota 2.”
In January the University of Pikeville in Kentucky became the second school to offer an eSports program, and it plans to compete in the Collegiate Starleague, which organizes tournaments for “StarCraft II,” “Dota 2,” and “League of Legends” and has more than 450 member schools.
Collegiate Network
Blizzard has tapped into the player base by linking with and sponsoring the Austin-based Texas e-Sports Association, a collegiate gaming network with more than 90 chapters in the U.S. and Canada, including University of California-Irvine’s The Association of Gamers, one of the largest gaming clubs in the country, with about 1,800 members.
UCI’s reputation as a top destination for gamers is a big draw for prospective and current students, like third-year informatics major Jesse Wang, vice president of TAG.
“It really helped me to decide to come here,” said Wang, who organized a gaming league as a high school student in San Diego. “It was a very good place to get involved in the eSports scene. We’ve really noticed this trend of collegiate eSports getting more and more legitimate.”
