Philly investors think online gaming is an opportunity ‘screaming from the roof’

Who cares about esports? You might be surprised.

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The idea of esports might conjure the stereotypical image of a lonely nerd sitting at the computer in his mother’s basement, but these days, competitive online gaming is a hot market.

An esports athlete can net $50,000 a year plus benefits — and that’s just the starting pay in the Overwatch League. The cap for a high-performing player is somewhere in the millions. The esports industry made $655 million in revenue in 2017, according to a Newzoo report. This year, it’s expected to surpass an impressive $900 million.

No surprise, then, that Philly sports, entertainment and venture capital companies are scrambling to be part of the digital gold rush.

Harris Blitzer Sports & Entertainment, which owns the Sixers, jumped into the market and made history in September 2016 when it acquired Team Dignitas, an internationally-known esports team from the United Kingdom.

“You hear these incredible stats about esports…it became a race,” said Lara Toscani Weems, communications director with Harris Blitzer, at an esports symposium at Temple at the end of April. “We wanted a team that felt like the 76ers…We’re looking for places where there’s opportunity for growth.”

Lara Toscami Weems of Sixers owner Harris Blitzer explains why the company got into esports at Temple's panel

Lara Toscami Weems of Sixers owner Harris Blitzer explains why the company got into esports at Temple's panel

Devin Marshall / for Billy Penn

Currently, Dignitas plays seven different games competitively, including first-person shooter Counter-Strike: Global Offensive. The challenge so far is marketing them without shoving it in people’s faces.

“We are mindful of the 76er audiences, we’ll find a creative way…We’re aware that the audiences are different,” she said. Asked what the next big game will be, Weems had a ready answer: “Everyone’s talking about Fortnite right now.” Recording artist Drake recently made headlines playing Fortnite with one of the game’s most popular streamers.

Meanwhile, Comcast Spectacor, owner of the Flyers, also owns the Philadelphia Fusion, an Overwatch team currently competing at the Blizzard Arena in Burbank, CA. Since they play far away, there are official viewing parties in Philly to drum up hometown support. “We need these local events, our boots on the ground,” said Joe Marsh, Fusion’s finance director.

Plans are in the works to build a home arena, possibly in University City or Northern Liberties.

“We’re mapping out where our fans are,” Marsh said. “We’ve seen our following grow because we’re from Philadelphia, they don’t want to cheer for New York.”

The Union, Philly’s pro soccer team, also participates in esports via eMLS, a competition in the FIFA Global Series. This March, the Union hosted the eSports Open Tournament and signed the winner, 17-year-old Cormac Dooley, to compete at the eMLS Cup at PAX East in Boston.

N3rd Street Gamers CEO John Fazio discusses esports on the local level at Temple

N3rd Street Gamers CEO John Fazio discusses esports on the local level at Temple

Devin Marshall / for Billy Penn

N3rd Street Gamers, based in Old City, hosts game tournaments and sponsors local esports events, like next month’s Fusion Showcase Overwatch tournament at the TooManyGames convention. The prize pot is a sweet $5,000. “I’m really excited for what’s to come,” said CEO John Fazio. “I think we forget how really underdeveloped this industry is.”

Equipment cost is one barrier for prospective gamers.

“To play football, you walk outside and throw a football,” Fazio said. “To play esports, you buy a computer, or you buy a console.” A player also needs a fast internet connection — and eventually, sponsorships. To join the Overwatch League alone, signing a team costs an alleged $20 million.

Wayne Kimmel, managing director of VC firm SeventySix Capital, invested in N3rd Street Gamers after seeing the potential for this new industry.

“We think this esports world is the next, next thing…We’re thrilled to be investors,” he said. “The opportunity is just screaming from the roof. We gotta bring people out, see [gamers] playing, yelling, hugging each other after the match.People need to see these things with their own two eyes, it’s incredible.”

Topics

Sports, Gaming

People

Wayne Kimmel

Organizations

Sixers, Flyers, Fusion