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In the video-gaming business, watching is the new playing

Millenium eSport professional gamer Clement of France, nicknamed Riskin, plays on his computer inside the Millenium Gaming House in Marseille, November12, 2013.

Jean-Paul Pelissier/REUTERS

Packed stadiums, celebrity players and sponsorships – the age of competitive video-game play as a spectator sport is rising.

Enthusiasts from around the world are watching video-game competitions known as "eSports" on TV, online and in stadiums in higher numbers than ever, creating a bona fide electronic sporting community with the potential to generate major revenue.

Gamers and fans watched 2.4 billion hours of eSports video in 2013, nearly double the 1.3 billion hours that viewers tuned in to the year before, according new global research by data analytics firm IHS Technology. The report noted that viewership is already on par with some traditional athletic sports, and will soar even higher in the coming years. By 2018, hours of viewing will hit 6.6 billion hours, IHS projects.

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And there's even more money behind eSports events, which centre around games such as League of Legends, Call of Duty and StarCraft II. Last year, thousands of fans of the most popular eSports game League of Legends sold out the Staples Center in Los Angeles to watc h a world championship game. And the prize money is sizable – the big annual tournament for a game called Dota 2 has so far generated a prize pool of about $8.7-million (U.S.). For comparison, the pot for the 2014 Masters golf tournament is $9-million.

The eSport community is changing rapidly, with viewers moving increasingly online, away from television stations that used to broadcast events. The IHS research found that online viewership hours in 2013 were three times greater than TV.

Many industry experts credit the increase in viewers to video-game streaming platform Twitch, which allows gamers to tune in for free. The site boasts 45 million gamers interacting each month, and Google Inc. is on the verge of acquiring the business for $1-billion, according to reports.

When it comes to showcasing video games as competitive sport, Major League Gaming (MLG) is also a major player, aiming to be "both the NFL and the ESPN of the video game industry" by organizing and broadcasting large competitions. As the company moved from TV to Internet broadcasting, its young, predominantly male demographic increasingly moved online. Last year it launched, which shows a variety of video-game content through the Web, Xbox network and smartphone apps.

"MLG is expanding its presence on all digital fronts," said Mike Sepso, co-founder of MLG, adding that the company is increasing the size and scale of its professional eSports league.

To reach more fans, MLG is holding the first eSports competition at the Summer X Games in Austin, Tex., – an alternative sports event that awards medals for skateboarding and dirt bike riding, and now video-game play. The company just launched an office in Brazil and has begun development on the first MLG Stadium on Hengqin Island in China.

As more fans connect around the world, gaming culture has changed, says David Creamer, director and CFO at eSports Canada, a not-for-profit group focused on fostering the competitive gaming community in Canada through spectating and other events.

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"When I was a lot younger playing competitive games on the Internet, everyone was very abrasive. There was constant sexism, racism …," Mr. Creamer said. "But as it's become more professional and sponsors have gotten involved, it's been cleaned up. This has made it more mass-market friendly."

The change in culture might encourage even more sponsorship, as advertisers become comfortable with linking their brand to gamers. Last year, Coke Zero sponsored an amateur-focused component of a big League of Legends tournament.

"Fortune 500 companies are starting to take notice. And once that advertiser base comes on board things change," said Chad Larsson, founder of Toronto-based Pro Gaming League, a year-old eSports startup.

Many fans are looking for camaraderie, rather than fame or fortune. "As much as I think people outside the community think this in only an online and digital thing…at the end of the day these are still people. And people like to hang out in person," said Gavin Seal, who recently made the  documentary Good Luck Have Fun: A Canadian "eSports" story, which made its debut at Festival de Cannes this year.

The rise of the video game spectator is also influencing game design. "Our games are social. We want people to be playing our games, but if you're just in the room you're still part of the action," said Matt Ryan, spokesman for Nintendo Canada. He points to Mario Kart 8 where developers have built in hidden characters and secret routes that a player might not immediately notice, which can make the game more engaging for spectators.

On June 10, Nintendo will hold a tournament where 16 of the best Super Smash Bros. players will battle on stage for two hours at the Nokia Theatre in L.A. – only 3,000 fans will be able to get in. "It's a true spectator sport, and we'll be sharing that content through our digital channels," Mr. Ryan said.

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Still, the North American video game community is in its early stages of growth. "This isn't Korea where some of the eSport players are A-list celebrities – we're not quite there yet. You're not Sidney Crosby if you're the top player in North America."

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About the Author
Financial Services Reporter

Jacqueline Nelson is a financial services reporter at the Report on Business. Prior to that she was a staff writer at Canadian Business magazine, covering news and writing features on a wide variety of subjects. More


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