The Rise of E-Sports
DOTA 2 INTERNATIONAL 2019 MAIN EVENT
“LGD, they brought you to Shanghai. They brought you to their home turf. And now OG have to play against the roars of the LGD fans.”
FORTNITE WORLD CUP FINALS 2019
“Another elimination. Are you kidding me?”
“And he’s got near-max materials!”
LEAGUE OF LEGENDS 2019 WORLD CHAMPIONSHIP FINALS
“It’s going down! And FunPlus Phoenix are your world champions!”
The world of esports is all about breakthrough stars, whether it’s a new tentpole game that captures the imagination of players around the world, or elite gamers whose skill and style earns them an intense global following. The challenge is balancing risk and innovation so that you’re in the right position when the next breakaway game or personality finally emerges.
I think the big thing is, there’s always going to be a next something, right? So, when people say, “There’ll never be another Fortnite,” and then there’ll be another Fortnite. Just like there was never going to be another Michael Jordan, but then there was Kobe Bryant or LeBron James, so there’s always going to be the next big game.
The world is changing fast. And every day, project professionals are turning ideas into reality—delivering value to their organizations and society as a whole. On Projectified®, we’ll help you stay on top of the trends and see what’s ahead for The Project Economy—and your career.
This is Projectified®. I’m Steve Hendershot.
If you’re running a record label, movie studio or sports franchise, you’re always looking for the next big thing. Esports is no different, because even this industry in which a rapidly rising tide is lifting a lot of boats, there’s still a big premium attached to having the game, the league, the player. Esports industry revenues are rising quickly and expected to continue to surge in the coming years—they’re likely to hit 1.1 billion U.S. dollars this year, up 16 percent from 2019, according to industry research firm Newzoo. And as big brands and corporations enter the space, they’re often looking to make a splash right away. Check out some of these blockbuster deals: Chinese streaming platform Bilibili paid 800 million yuan for exclusive Chinese broadcast rights to the League of Legends World Championship. British investment firm Hiro Capital raised a 100 million euro fund to build an esports portfolio, and esports arenas are rising in Melbourne, Mexico City, Philadelphia and Berlin.
The venue in Philadelphia, Pennsylvania, USA, the 50 million U.S. dollar Fusion Arena that broke ground last fall, is owned by esports team the Philadelphia Fusion and parent company Comcast Spectacor. The photo op from the groundbreaking, where all the executives smiled and held shovels, marked a transition point for Joe Marsh, one of the gaming division execs. Just a couple weeks later, he left for a new venture: Comcast Spectacor and SK Telecom in South Korea are partnering to build a new global esports business, headlined by a dominant League of Legends team and a superstar player who goes by the name Faker.
Faker is a co-owner of the venture, called T1 Entertainment & Sports, and Joe Marsh is the CEO, overseeing operations in Philadelphia, Los Angeles and also Seoul, where one of T1’s first orders of business is to build a headquarters/esports shrine. We spoke to Joe about his two construction projects—the arena in Philadelphia and the HQ in Seoul—as well as the broader opportunity in esports.
Let’s start with the project in Seoul. What are you trying to achieve with this building that aims to be both a functional headquarters and training center, and also a destination for fans?
So right now, the org is really spread out, and none of our teams are in the same building. Our office is tiny, and it’s not conducive to a three-time world champion.
One of the things we wanted to do when we took over was to build a facility worthy of that pedigree, but also give our fans finally a place to gather to support the team. Up until we arrived, there wasn’t much merchandise sales; there wasn’t much focus on that side of it. It was just more of: We were really good at games, and we were competing, but our fan base is very feverish. And we wanted to build a building that would be a showpiece for, not only for us and our players and it’ll help us with recruiting, but be somewhere where our fans can be really proud of. So, the goal for myself and my team was to find the biggest building we can get and make it special. And trying to find real estate in Seoul, everything goes up, and we lucked out. We found a brand new construction in Gangnam that’s right on the main road with easy access to the subway transportation, the public transportation there.
So, that was really huge for us, and with that, this will be the first time we had all of our teams under one roof, and our corporate staff. Then with the Nike partnership, Nike is the sponsor of our gym and our facility in the basement there, so we have a Nike gym, we have a locker room with all the training tools that you need to kind of recover. We have a sauna in each, the male and female locker rooms. We have a massage table to get the kinks out of your back and shoulders and hands. And then we have the actual workout equipment.
And then when you go one floor above, our first floor is our public space. So, you know, there will be a live studio, but there’ll also be a retail experience where fans can buy T1 Nike gear and Secretlab chairs, and then also a nice piece of our history is there. All of our trophies will be there on the first floor, so fans can come in for the first time ever and take pictures with the Summoner’s Cup and our MSI trophies and our LCK championships. So, it’s really a celebration of the team, the org and our fans as well.
And then in terms of what you’re trying to accomplish with the building itself, obviously esports, the central domain is virtual, so why is it so important to have this physical space, both from the perspective of getting the players together and then also creating the physical congregation spot for fans?
I think from the fan perspective, it’s just giving them somewhere to celebrate their fandom, with us and with T1. Other than going to LoL Park, which is where our League of Legends team plays, there’s not many opportunities to be around all things T1, so this will give them a centralized hub where people that are passionate about T1 can go and gather and experience our history and even see us, you know, in action, tune in some content with our live studio and maybe watching us film a podcast. It’s just more an opportunity for the fans to be part of the machine.
For the gamer perspective, really, it comes down to it’s a place that we can be very proud of, that we can shoot our content in, but also our guys can train to the best of their ability to win world championships. T1 is historically been a team that’s done a great job winning titles, and that’s been great with League of Legends, but we want to do that across all of our games.
So we want to build an atmosphere and a family-like environment where the staff to the players to the coaches, everyone, can be proud of being in that facility, having all the tools that they would need to succeed and hang their hat on and be proud of the legacy that they’re all going to build upon.
And then let’s cross the ocean to the Fusion Arena.
I’m interested to hear too because Comcast Spectacor also owns Wells Fargo Center, so obviously not only do you have all the esports experience of the, you know, sort of conference center version of doing that on a physical event basis, but then also you’ve got arena experience in pro basketball and hockey, so when you set out to create a space, a dedicated arena for esports, what were the goals, what were the learnings to, yeah, “Yes, we want to pull this element from this other sort of arena,” or, you know, “This is something new that we want to change?”
Yeah, so, the Fusion Arena is an interesting one, because we always thought we wanted to put the arena in University City or Northern Liberties where a lot of younger fans live, but we experimented with the different watch parties during the first year, and, ironically enough, the best attendance we kept having at the watch parties was down at the sports complex at Xfinity Live.
And I think a lot of it had to with everyone kind of knows where the sports complex is, easy access to public transportation, easy access to the highway, so, once we had the opportunity and Dave Scott, the CEO of Comcast Spectacor, offered up that plot of land to us, we jumped at the opportunity.
And for us, the biggest thing was building from the ground up and being the first team or company to really build a ground-up facility, purpose-built for esports in the Western Hemisphere. I think China beat us to it, they had one first, but in the Western Hemisphere, it’s us. The big thing was, we wanted to make the technology and the game-day experience be about the screen, the technology and the fan experience, and we were able to customize that experience because we were building from scratch and not having to retrofit a facility.
You know, a lot of esports venues are retrofit from conference center space or, you know, there’s a empty spot they had in the building, and they threw up some screens. But for us, we were able to work out every single detail of that venue to maximize our space, maximize our footprint, but more importantly, you know, maximize the fan experience. So, I think the biggest thing in the venue where we put a lot of our focus was the inner bowl experience with that 85-foot LED wall. That’s a showstopper in and of itself, but we’re competing with the in-home experience. Obviously these sports are digital; you can watch us on Twitch and YouTube and Mixer, so how do you get the fan to come congregate with the fellow Fusion fans, or fellow gaming fans in general, because the arena can hold more than just Overwatch. How do you get them out of the house and into the arena?
And we’re hoping that the technology, the custom food experience that we’re building, and just the general game-day atmosphere that we’re going to create, using the learnings that we have from the Philadelphia Flyers, managing the Wells Fargo Center, and bringing that into our venue, which will be 3,500 seats, it’s the perfect size for an esports event. The configuration lends itself to great acoustics. And we think our fans are going to really enjoy it.
The coronavirus crisis hits esports in a very interesting way, because the core of your industry, online gaming, is able to proceed unaffected, while another big facet of it, gathering huge crowds together to watch the action, is hugely affected. Already this has caused a construction delay on your esports arena in Philadelphia. What does it mean in terms of T1’s team and league seasons?
You know, it’s not ideal, like the in-person experience is really what we hang our hats on at new game team ownership, but we’re a sport that’s able to play online, so the Overwatch League will be playing online, League of Legends will be playing online, so we’re able to make do where other pro leagues like baseball or hockey, football, all those leagues, they’d be shut down right now, and most of them are. We’ll continue to be respectful of the travel bans in the different regions, because we do operate globally, and while things are heating up here in America, things are starting to slowdown in China and Korea.
I think gaming is up 70 percent, because everyone’s at home. Even with casual gamers, so we have a captive audience, so hopefully they’ll start watching some League of Legends games when we come back and keep playing some of the new titles that are coming out. Obviously VALORANT’s coming out hopefully soon, from Riot, which is their first-person shooter, and then Warzone from Call of Duty just came out, which is their battle royale game.
So, a lot of things to play and do while we’re waiting this out at home, but gaming is the ultimate equalizer, right? You’re seeing a lot of pro athletes in basketball and baseball jumping to gaming while they’re on this break, so hopefully we can do some fun stuff with those guys on streams.
Joe’s had his hands in a lot of different aspects of the esports industry—the teams, the broadcast networks, the arenas. But think what that doesn’t cover—the games themselves, the leagues that facilitate all of this high-level global competition, not to mention the online gameplay for the non-elite folks who pay the bills both by playing the games themselves and by the devotion and attention they give to the superstar players.
Projectified®’s Hannah Schmidt spoke to a project leader at one of the companies at the center of esports, Activision Blizzard, creator of the games Overwatch and Call of Duty. TL Frasqueri-Molina, who is based in Pasadena, California, USA, is both PMO lead and lead project manager for the broadcast technology group in esports at Activision Blizzard, which means she’s tasked with ensuring the success of esports initiatives. Before we go to the interview, and just in case we have any listeners who are hoping we divulge critical Overwatch or Call of Duty secrets: TL is here speaking on her own behalf, and not representing Activision Blizzard.
Let’s start by talking about the esports industry. How would you characterize the growth over the past few years?
I think a lot of people would love to say, use a lot of buzzwords, that esports has this amazing, like, hockey-stick growth and it’s just this fantastic startup space. But actually, I think the growth in esports has been, like, really predictable, oddly enough. We knew it was going to get bigger as I think it went from just a space where gamers were able to compete with each other, but larger companies started to realize that they could capitalize on what esports brings to the table as another vertical. When those big players start coming, I think you start to get a lot of maturity in place. And in order for those companies to come, you kind of have to know what you’re doing.
And also I wanted to ask about so the growth of, like, not only the players that are going to be involved, but also the audience as well. Because it seems like I’ve read a lot of data that that’s also growing. Do you think that’s because of the maturity?
I think so. I think also the reach. For instance, when you’re on ESPN as esports, it’s ESPN. And it’s just such a large, wide audience. Definitely always kudos to the audience that has been with esports since day one, right? Those are your early adopters, if you will, people who really saw the community value and some people who really saw the financial value in what esports could bring. And I think a lot of those folks are still there.
I think they’re growing and maturing and evolving to figure out what esports is going to be, right, when it becomes this cool thing just for us cool gamer kids and then grows into a thing that ESPN is talking about. It’s like, you have to make some changes to how you’ll continue to be successful in the esports space now that these bigger players are coming in.
Let’s talk about launching esports leagues. What’s that process like?
It definitely takes a village, right? We are all in this together. There’s definitely two big spaces, right? There’s that live space, in-person, being in a stadium or being in an arena. And then there’s getting your content out to different platforms for audiences around the world that aren’t joining you live in stadium or in an arena. And then there’s a creative part, and then there’s a tech part, and I think esports marries those two aspects really well.
You’re still a show when you are broadcasting esports. You still want to have talking heads like they have on an ESPN sports show. You still want to have these great big moments that people are yelling about in your live experience. You have the players and the teams that are bonkers in their skill level in playing these games, like amazing and, you know, what they bring to the table and then their team managers.
But then you also have sponsors and advertisers who might want to be a part of this. So you’ve got your creative side, you have your dollar side, and then you have your tech side. How do we get what we’re watching in person around the world to 40 million people? How does that work, and where are they watching from, and what’s their quality of service looking like? So it takes a village in all these different spaces, and I think managing leagues as sort of part like TV show, programmatic seasons and episodes, but also part like a program, like just a straight-up project management program. Here is my overall goal, and then here are all of these different verticals that we’ve got to make sure all of these requirements and deliverables come through successfully for, right?
I’m on the technology side of things, the broadcast tech, specifically. So I’ve got to trust that what is happening on the creative side and what is happening on the players and the team managers’ side of our commissioners, that those are happening and that we come and connect our dots together at some point.
I think, especially working for a company that is a veteran in this, you know, producing esport space, they’ve been able to figure out a way to make this repeatable and sustainable, right, which is what you’re always trying to do in project management land. “How can I do this again? How can I keep doing it over and over, and how can I keep delivering value in a way that is, you know, we can expect the value to be delivered in this repeatable and sustainable way?”
And so there’s obviously a lot of collaboration, a lot of stakeholders involved. What sort of challenges can you face in trying to get all of this up and going?
Right now, time zones. Esports and esports leagues are all over the world, so when you’re collaborating to deliver something, you are working with people in Asia Pacific time zones. You’re working with people in European time zones. You’re working with people in our time zone here in the USA. And really just making sure that communication is seamless and actually up to date, right? So that whatever has happened in our Asia Pacific time zones gets to us, or whatever’s happening to us in our USA time zones is getting to our European partners.
I would say that’s just one thing that is challenging but sort of one of, I think, the biggest things to point to what’s the success of being able to collaborate like this is. You know, we know that we’re all literally all around the world delivering these either in-person events or these broadcasts to other people who are all around the world. So being able to understand what that means, and I think that also it’s actually really important to understand what that means for like the psychological safety and well-being of your people. If we’re talking to people at 2 and 3 and 4 o’clock in the morning, are we still talking with them 24 hours a day? Like, we have to be really mindful that there are humans that are here, trying to make this work all around the world, and that it’s important that we all stay sort of safe and sane as we’re working in all these different time zones.
But that communication, what that documentation is like, language interpretation. I don’t read Mandarin, right? We’ve got to make sure that all of that information that we’re sharing is in a way that’s very understandable for everyone. And that we’re interpreting what those translations mean accurately. The world of project management, we have to be very, very clear and very, very concise and unambiguous, as unambiguous as possible in our requirements. And if there’s something that can be interpreted a different way, we kind of then go back and make sure those requirements are the same, right? By the time you have your live event or by the time you get to you now are streaming to the masses, that’s not when you want to go, “Oh, I think our requirement was ambiguous, and we’re not quite sure what this means.”
With the coronavirus affecting esports leagues and games, how do you prioritize which challenge to address first?
I think one of the things that I’m working hard with my team in doing and now because I’m a lead and I have access to leadership is, I’m very risk adverse, even though I work in some startup spaces and some very fast-moving tech spaces. I’m very risk averse. So I go, “This is all very exciting, but, and it’s like a buffet full of your favorite desserts and foods, but I don’t want us to get carried away. What can we do that is going to meet expectations successfully or at the very least meet our table stake successfully that is this big?” Because if we are trying to tackle the entirety of the buffet all at once, I feel, and this is just me, and I’ve always felt this way, when you try to do something so big so fast and you want to boil the ocean, I think you end up with an extreme amount of unnecessary risk, or an unnecessary amount of extreme risk, is the better way to say it.
And not that there’s no risk, but I always caution that if there is a way that we can do this iteratively where we can deliver on this much of it and still be awesome and then deliver this next much and still be awesome, can we do that? Then after that, I have staked my case, it really is up to the executives to say what they want to say, right? But it definitely is how can we do more of what Activision Blizzard, Call of Duty esports, WoW esports, Hearthstone esports, StarCraft esports, how can we do more of that, larger?
Esports sits at such a unique crossroads of modern life: digital and analog, cooperative and competitive, solitary bedroom players and big stadiums full of screaming fans. It’s growing so fast, money is pouring in, and the stakes are rising quickly. The success of the projects underway right now—from new physical spaces that aim to bring esports to life, to the games and leagues that make it all possible—these will go a long way toward determining not only the scale and viability of this still-young industry, but also its personality and culture. It’s always a delicate moment when a youth-driven subculture gets that injection of grownup attention and capital, and tries to mature while retaining all the qualities that have made its product and community so special. It’s up to project leaders to bottle that magic and to help esports level up.
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