E-Sports Arena Planned for Oakland, Calif.

The new arena dedicated to e-sports will cater to one of the fastest growing sports and attract events and tournaments from around the world.

by Benny Evangelista, San Francisco Chronicle / August 12, 2016
E-sports players Flickr/ Maxime FORT

(TNS) -- Finally, someone is getting a new arena in Oakland — but it’s not the Warriors.

A 1,000-seat facility dedicated to e-sports, the fast-growing pastime of cheering on video-game players and teams, is planned for Jack London Square, most likely by the end of this year or in early 2017.

The ESports Arena: Oakland, a joint venture between an Orange County startup and a Chinese sports and entertainment company, would be the Bay Area’s first dedicated e-sports venue and one of only a handful in the world.

It’s the latest sign that demand for e-sports extends far beyond watching others play video games online. With sold-out stadiums for major gaming tournaments and millions of dollars in prizes, e-sports has become a real-life, crowd-pleasing extravaganza.

“The energy of the crowd adds to the excitement of the games,” said analyst Pieter van den Heuvel, who heads the e-sports section of the video-game industry research firm Newzoo. Events in physical venues, he said, “are at the heart of the growing e-sports industry.”

Most people still watch e-sports online, via streaming applications such as San Francisco’s Twitch, whose more than 10 million daily viewers watch tournaments and individual gamers. (Twitch was scooped up by Amazon in 2014 for $1.1 billion.) Online viewership of major professional video-game championships for games like “League of Legends,” “Dota2” and “Counter-Strike: Global Offensive” rivals TV viewership of athletic events like the World Series and NBA Finals.

But increasingly, the sport takes over physical spaces — sometimes hotels and theaters, but also larger venues such as the Staples Center or Oracle Arena for multiday events. The 16,000-square-foot Oakland arena, which will be formally announced Thursday, will be built by ESports Arena of Santa Ana and Allied eSports of China, which opened an e-sports arena last year in a Beijing nightclub district. Allied eSports is also buying an undisclosed stake in ESports Arena.

“To a lot of people, this is a part of their culture,” said Paul Ward, CEO of ESports Arena. “It’s what they love to watch and experience.” Ward’s company founded an e-sports arena in Santa Ana last year.

Attending an event in person is rather like going to a basketball game. Thousands of fans fervently yell to support their favorite teams and players. But the action at an e-sports event unfolds on giant video screens, instead of on the court.

Last year’s Intel Extreme Masters, a “League of Legends” and “Counter-Strike: GO” tournament, drew 12,000 people to San Jose’s SAP Center.

“It was a great environment to watch the games from,” said Brad Fry, who attended Intel Extreme Masters and is co-founder of the AFKgg Gamer Lounge, a downtown San Jose video-game-themed restaurant and bar.

However, he said, “They are really long and there’s not much to do. You’re sitting there eight to 12 hours watching the same video game over and over again.”

Jud Hannigan, an Allied eSports senior vice president, said the Oakland venue hopes to give video-game fans a variety of options, including game stations to play the games alone or with a group of friends. It will occupy a currently vacant retail space on the ground floor of a parking structure next to the Amtrak station at Jack London Square.

For video-game publishers and teams, the sport can be lucrative.

Mike Vorhaus, president of the consulting firm Magid Advisors, predicts that in about five to seven years, e-sports might generate more revenue globally than golf. Watching people play video games is a growing pastime, “as ridiculous as that sounds to most people who aren’t 12 to 35,” he said. “But if you’ve got a kid in this age range, it’s real.”

In a report in January, Newzoo predicted that global e-sports revenues — from merchandise, merchandise sales, tickets to events, sponsorships and other areas — would more than double, from $463 million in 2016 to $1.1 billion in 2019. The firm estimates that the total audience for e-sports will swell from 292 million worldwide this year to 427 million by 2019.

The new arenas draw revenue from ticket sales and memberships to draw in viewers. ESports Arena, for example, charges $18 for a one-month membership at its Santa Ana location, reduced to $13 a month for an ongoing subscription, or $10 for a day pass. “We realize that you have to convince the gamer to come out of his bedroom, and that’s difficult if you have high prices,” Ward said.

The Oakland arena is part of a planned network of eight more similar arenas around the world within five years, including one in Europe that will be announced next week, Hannigan said. Each venue will have its own broadcasting equipment, and the companies plan to create regional tournaments pitting players in one venue against competitors in another.

“We want to build truly global rivals,” he said. “Instead of Oakland versus San Francisco, it can be Oakland versus Beijing.”

©2016 the San Francisco Chronicle Distributed by Tribune Content Agency, LLC.

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