Evil Geniuses Win $6.6 Million Playing Video Games: eSports May Be Good for You

The prevailing parental narrative about video games is that they are likely to be an anti-social addictive waste of time or, at best, mind-numbing entertainment. It might be time to reconsider that narrative.

Imagine an arena with tens of thousands of fans and millions watching online cheering for their favorite team in a team-based video game competition. This was the scene at the Fifth Annual DOTA2 International Tournament where a North American team, the Evil Geniuses, won the Grand Finals to take home $6.6 million out of the $18.3 million in prize money. ESPN commentators tried to cover the event. According to serious gamers, they were out of their depth. However, this 15-minute clip from ESPN’s E:60 Throne of Games does give a flavor of what’s at play.dota-2-the-international-6-970x0

To be clear, this is NOT fantasy sports where people create a fantasy team of football players and match their team’s stats to friends in a fantasy league. eSports (maybe eventually esports) are competitions among real teams playing their sport with their hands and brains on a computer screen rather than a field. The teamwork is breathtakingly precise and intense.

eSports are here. They have many of the features of traditional sports like teams, coaches, star players, amateurs, and pros but their fields of play are virtual. There are even groups thinking about how to get broader recognition of eSports as a standard extra-curricular in schools. eSports scholarships might not be far behind.

Teague Hopkins at THG, which helps start-ups meet the strategic challenges of scaling up, has been following the rapid growth of the eSports industry. eSports was the subject recently on his podcast, StartupJab. He is spotting some interesting trends:

First, eSports is a huge global industry. The top ten competitions in 2015 awarded almost $60 million in prize money. There were about $300 million in major industry investment transactions last year. Although eSports are viewed online rather than on televisions, the 36 million who viewed the League of Legends 2015 Worlds was more than watched the NCAA March Madness basketball final. More detailed analysis is available from the eSports Marketing Blog.

Second, eSports is showing some of the same economic dynamics as the early years of traditional sports organizations. There are competing league organizations, huge payouts to lure top players to new teams, and a lagging understanding of the eSports business by mainstream journalism. Last week, for example, Activision Blizzard, a major video game developer, bought the business assets of Major League Gaming. MLG is a platform for hosting and streaming online gaming tournaments. Video game publishers want to solidify their hold on the business of running eSports leagues and events and streaming them to huge audiences.

Third, the eSports business has some unique characteristics. In eSports, unlike most traditional sports,  a company actually owns the game. Valve which developed and owns DOTA2 was the major sponsor of the DOTA2 International Tournament. Teague explains that although some of these video games are free to play online by fans, there is a sophisticated marketing funnel where the company can monetize its assets through micropayments within the game as players pay for power-ups and special advantages. Smartphone apps like Word with Friends and Candy Crush have paved the way for this model.

Teague also points out that since video game companies own the game they can tweak it and improve it as well as add new challenges to keep it fresh. The games still have to appeal to the market, but as Teague says, “it is a little like soccer being free to play, but one company owning all the soccer balls.”

But as a parent, do you really want your kids playing hours of video games to get on the fast track for video game stardom? Maybe, maybe not. Like any sport, only a few people will become top professionals. As the NCAA ad says, “most of us will go pro in something other than sports.”

However, the research on the impact of playing video games is becoming more sophisticated and there are some significant positive factors. Teague points to a TED talk by brain scientist, Daphne Bavelier. She addresses some of the common myths about the impact of video games.  Action gamers actually have better vision rather than worse; better attention rather than being easily distracted. She does not think “bingeing” on anything including video games is a good idea, but her research suggests that action video games can provide the basis for training the brain in various positive ways.

One of Teague’s passionate interests is the nexus of gaming and learning. During his MBA, he was a research fellow for the Serious Games Initiative at Babson College. How can team-based action video games help us learn all kinds of valuable skills across the spectrum – from vision to complex mental processing, but also leadership and social skills? If you are a gamer and are interested in being either an adult coach or know younger gamers who might want to join a community of other gamers to participate in an experiment to learn more from their action games, you can contact Teague here.

2 responses to “Evil Geniuses Win $6.6 Million Playing Video Games: eSports May Be Good for You”

  1. realy interesting on a topic I know little about. exciting to see how the audience and interests of Giles and Teague intersect. I want to watch the ted talk and video you mentioned.