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ESPORTS
A Site Selection Web Exclusive, September 2021
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No Translation Necessary

Game-changing esports athletes are creating a new industry sector many moves at a time.

ESPORTS
Yagorath the Devourer is a character in Paladins, a game from Atlanta-based Hi-Rez Studios.
Image courtesy of Hi-Rez Studios

by ADAM BRUNS
Renee Gittins, Executive Director, <br />International Game Developers Association
Renee Gittins, Executive Director,
International Game Developers Association

This is the first installment of a three-part esports series this fall that is part of continuing career and technical education reporting this year in Site Selection supported by the Higher Education Media Fellowship at the Institute for Citizens & Scholars. Watch for future installments on collegiate esports and esports business growth in the coming weeks. 

What if a means to an end turned out to be the destination? I set out to explore how competitive video-game play — esports — translates into professional skills in the real-world economy. Instead I learned the esports industry itself is a force to be reckoned with in terms of capital investment, job creation and career development.

First things first: Could “Counter-Strike” help companies win the battle for tech innovation? Is “Fortnite” fortifying talent pipelines? Will a winning roster of “Rocket League” and “League of Legends” players emerge from one of the many college esports stadiums popping up around the country to be victorious in the global business arena? 

“Team-based competitive esports titles themselves encourage many important soft skills, including staying calm under pressure, teamwork, and leadership,” Renee Gittins, executive director, International Game Developers Association (IGDA), tells me. “Competitive games overall require managing information flow and quick decision making, but esports also go beyond the teamwork and gameplay of the players. Esports also encourages the development of skills in areas like technology, broadcasting, management and many other disciplines to provide support to such teams and programs.”

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Sylvia Christina Amaya is founder of Latinx in Gaming, vice-chair of IGDA and head of events for Team Liquid

Sylvia Christina Amaya, founder of Latinx in Gaming, is vice-chair of IGDA and head of events for Team Liquid, a global esports organization that started in 2000 with involvement in the games Battle.net and StarCraft and has now grown a stable of 60 esports athletes across 14 games. When I asked her which esports skills translated best into what growing employers are looking for today, she likewise noted the entire ecosystem that exists outside of the players in those special chairs. 

“Overall you can truly develop any major skill in esports,” Amaya says, “but the one that I think that's most important is the ability to shift prioritization regardless of role. Things often change. For example, if Team Liquid makes it to the championship, this changes what events we do, our marketing, the players’ schedules and diet, the deliverables owed to our partners. We have to be ready for shifts at any moment, and that is valuable in any role.” 

Their insights apply primarily to the narrow sliver of gaming focused on competition and performance. But behind the bright lights is an entire universe of game creation and development, software and hardware. In many ways similar to the economic impact of the film and television production sector, the esports economy is as real as it gets. 

How real? Jodi Asbell-Clarke, a former IBM data scientist based in Halifax, Nova Scotia, who worked to support the first 25 years of NASA’s space shuttle program, is senior research scientist and director of STEM-based game research and design organization EdGE at TERC and one of the creators of the education video game Zoombinis. She recalls a conference that took place around 2009 when virtual worlds such as “Second Life” were a hot trend. Very hot. 

“A woman came on and talked about her $250,000 career in ‘Second Life’ as a virtual prostitute while being home raising her young children,” she says. 

Risqué behavior aside, Asbell-Clarke says she got her biggest lesson in video games’ potential at a Connected Learning Summit conference a few years ago, when some fellow game-based-learning educators introduced her to “Fortnite” and its ecosystem. 

“They showed me the affinity sites around it, where you go to learn how to play the game well,” she says, “the repository of statistical analysis tools people were developing and sharing. A workforce had been built to help people get good at ‘Fortnite.’ ” 

All those peripherals, she says, looked a lot like education to her. “They’re building statistical analysis tools for 12-year-olds or 17-year-olds to use. They’re as sophisticated as my social science tools, but they wouldn’t want to use my social science tools. This hook goes a lot farther than just the game or even the pot of money. What career and technical education possibilities can emerge from just the preparation alone? If you train for a marathon, I don’t know how good a CEO that makes you. But if you train for ‘Fortnite,’ I think it translates well to industry.” 

The Numbers & the Code 

No translation may be necessary. 

The Entertainment Software Association’s most recent industry report says video games employ 143,045 directly and support 428,646 jobs across the U.S. economy. Among other notable figures, says the ESA, the industry supports: 

  • Generation of total income (salaries, wages, and benefits) for U.S. workers of $35.28 billion, including $17.37 billion in direct income to video game industry workers; 

  • Contribution of $59.76 billion in value-added within the economy; 

  • $90.34 billion in total economic output; 

  • $12.6 billion in taxes generated, comprising almost $8.2 billion in taxes generated for the federal government, and an additional $4.4 billion generated for state and local taxing bodies.  

“In part because the industry supports high-paying jobs, the direct employment impact has a strong multiplier effect on additional job creation in the economy,” says the ESA. Those jobs come in a broad array of categories, from production to the real estate sector, where direct and induced impacts add up to $2.95 billion in output generated because of the presence and operations of the video game industry. 

Market research shows esports growing from a $1 billion industry in 2019 to nearly $4.3 billion by 2027. The larger global games market is expected to grow to $200 billion by 2023.

(Sources: Data Bridge Market Research, NewZoo)

In the world of business and economics statistics, you know you’ve arrived when you get your own NAICS (North American Industrial Classification System) code. Could esports be on the verge of such a watershed moment? 

This spring, John Sperry, a survey statistician in the Census Bureau’s Economic Indicators Division, published a commentary noting esports activity is beginning to show up in services data in such categories as broadcasting, internet publishing, software publishing and spectator sports. “As the esports industry develops and grows, these emerging areas may necessitate a breakout NAICS classification of their own,” he speculated. 

Getting across the finish line may be as challenging as navigating all 100 stages of Super Smash Bros. New industries must meet criteria such as having enough establishments that statistics can be published without disclosing information about individual firms’ operations. But a 2022 NAICS revision is coming soon, and a fact sheet deep in the catacombs of the Census Bureau notes, “NAICS gives special attention to developing production-oriented classifications for (a) new and emerging industries, (b) service industries in general, and (c) industries engaged in the production of advanced technologies.” The 2017 NAICS revision awarded nanotechnology R&D its own six-digit code. The 2012 revision saw the addition of five new codes covering alternative power generation categories such as solar, wind, geothermal and biomass. 

So it’s no wonder that regions from Vancouver to Atlanta to Västernorrland, Sweden, have targeted esports as a sector worth cultivating alongside more traditional economic development targets such as automotive, logistics and life sciences (all of which, it must be said, are pursuing a number of innovations in digital environments). 

Dungeons: The Original Arenas 

Video games are loaded with lingo and acronyms (see glossary), so let’s get one non-gamer term out of the way right now: MAWG, or middle-aged white guy. At 57, that's what I am, despite my furious attempts to avoid the presumptions that come with it. 

My video-game history starts with a tabletop Pong console all the kids crowded around after pre-dawn Saturday morning tennis practice in the Midwest. Later came Mattel’s hand-held electronic football game that rattled off the six-note “Charge!” song every time you scored; Asteroids and Galaga at the Malibu Grand Prix arcade; and the popular Ms. Pac-Man two-top console at college (though I spent more time at the real live snooker table that had improbably landed in the basement game room a few steps away).

esports

YouTube Theater, which will host major esports competitions as well as concerts, comedy and conferences, is part of the nearly 300-acre Hollywood Park mixed-use development in Inglewood, California, being developed by Los Angeles Rams Owner/Chairman E. Stanley Kroenke.

My awareness grew over many years working in bookstores, as the games section expanded with such legendary CD-ROM titles as “Myst,” “Where in the World is Carmen Sandiego?” and “The 7th Guest.” But the fascination they bred was as mysterious to me as the appetite for the Dungeons & Dragons game right next to it on the shelf. The connection between the two runs deeper than my bewilderment, however. 

darvasi
Dr. Paul Darvasi

“The video game spectrum has roots in D&D,” says Paul Darvasi, a longtime high school teacher and educator, game designer and researcher based outside Montréal who lectures, writes and consults on the intersection of digital games, simulations, narrative, social justice, culture and learning. Contrary to the lazy trope of gamers slouching into Cheetos-stained couches in a state of spectatorial paralysis, he says players are far more likely to be engaged in what media scholar Henry Jenkins at the University of Southern California has called “participatory culture.” Unlike TV and even books, with video games, “you’re a producer, you’re making podcasts, putting up videos, actively liking and commenting on posts,” Darvasi says. “It’s that participatory relationship with media which characterizes Gen Z, the oldest of whom are now in their mid-20s. They don’t know a world without internet. They require participation.” 

School environments, he notes, are still largely spectatorial in nature, though video-game technology has played a major role in spawning the entire educational technology (ed-tech) business sector. Card, board and video games, however, require participation. And it’s even come full circle as gamers drive the recent trend of card and board game salons and, yes, the resurgence of D&D. 

“In the last five to eight years it’s absolutely booming,” Darvasi says. “Dungeon Masters are making a fortune working parties and groups. It offers the participatory, but also face-to-face and social elements as well. Role play. Experience points. Loot. All these things that had seeped into the DNA have now returned. There are so many influential people from the tech industry, Silicon Valley types, who ascribe their ability to tell stories, to think laterally, to D&D. It inculcates a way of thinking and being that is much more dynamic,” as opposed to sitting around watching TV. “It’s interactive storytelling and collaboration, conflict resolution, negotiation. When you’re in middle or high school, it leaves a strong impression.” 

Gaining Currency 

You knew the marriage of traditional sports and esports was complete when a medley of themes from globally popular video games serenaded the athletes as they marched into Tokyo Stadium for the opening ceremonies of the Summer Olympics. The International Olympic Committee even authorized a series of five esports events in the run-up to the Games, as esports vies to be an official Olympic event category. 

Aren’t video games what we’re trying to keep away from healthy young people? Even as it has recognized and cultivated esports as sport for decades now, the Chinese government is cracking down on game play in the name of addiction prevention and productivity among its reported 660 million gamers. Even as Chinese tech giant Tencent’s gaming revenues reportedly tripled in the last five years to reach $24.1 billion in 2020, the People’s Republic is using its Orwellian surveillance infrastructure to limit minors to only three hours of play a week — one hour per day on Fridays, Saturdays and Sundays — which some gamers would regard as just warming up. 

“They're going to get slammed,” joked screenwriter and comic Peter Grosz on a recent edition of the NPR comedy news quiz show “Wait, Wait, Don’t Tell Me. “When the Olympics is all esports, China is going to get wiped off the map.” 

“It is true,” agreed host Peter Sagal. “If the international balance of power comes down to Fortnite, we will kick their butts.” 

Some are already kicking. By now we’re all just a degree or two separated from someone making real money in esports. And for all the ersatz currency that gets traded around in games, it is real money. Look no further than the recent clan warfare that took place in the game Old School RuneScape as a result of very real Venezuelans gaming the game system in order to make real money in a currency more stable than their devalued bolivar.

Esports have transformed watching action unfold on a screen into the ultimate spectator sport where watchers will pay to watch players watch their avatars. In my neck of the woods in Atlanta, my first run-in with esports riches was noticing a lime-green Ferrari Testarossa parked askew and far away from all the other cars at a league tennis match. One of my younger opponents, it turns out, had decent groundstrokes on the court, but what really mattered was when he was holding court: He had become a millionaire because fans around the world watch him playing video games on Twitch.

“I used to teach a kid whose father was documentary filmmaker Robin Benger, whose wife is an actress,” says Darvasi. “My school was not far from Koreatown in Toronto. Koreans are among the world’s most dedicated gamers. There were many, many internet cafes in Koreatown. His oldest son was skipping school to go to the cafes to play Counter-Strike,” a multi-player first-person shooter game (FPS, not to be confused with the important video-game hardware issue of frames per second). “Robin decided to make a documentary film about this disgraceful situation, his son wasting his life going to these smoky cafes instead of going to school. 

“In the process of making this film he unwittingly documented the rise of one of the most successful 'Counter-Strike' players of all time, his son Griffin ‘shaGuar’ Benger,” Darvasi says. “The film starts as a way to condemn him, and he ends up making tournaments and making far more money than his father.” 

The younger Benger parlayed that success into further wins in the online poker world. In many ways, his career trajectory, even as his video-game mastery came well before the current wave now filling stadiums, mirrored that of an elite athlete, Darvasi says. Which means you only have to worry about transferring your skills after you’ve used them to make bank. 

johnson
Ryan Johnson, Founder, Cxmmunity

School’s In Session 

Ryan Johnson is founder and CEO of Atlanta-based Cxmunnity, whose mission is to increase the participation of minorities within the esports and video game industry. Among other activities, the organization is rolling out as many as a dozen new esports arenas on the campuses of Historically Black Colleges and Universities (HBCUs). It’s just one of several roles Johnson plays, including also being founder and CEO of the Nexus Entertainment and Sports agency and an advisor to Brickhouse Ventures Corp., which partners with and invests in early-stage sports and entertainment technology companies. He’s also an active Call of Duty and NBA2K player. 

When the State of Georgia recognized esports as a sport in 2019, Johnson noticed the buildout of the program by the state’s high school athletic association was oriented toward PC-based games, which effectively shut out a lot of inner-city students despite data showing 83% of minority teens play video games vs. 71% of European/Caucasian teens. (Only 14% of games are created by Latinx or African-American creators.) Among his main goals, he tells me, is establishing relationships with corporate brands inside and outside of the video-game realm, so that STEM-skills-based internships can be developed such as 25 new internships announced not long ago by California-based Riot Games. 

“We’re one of the first groups to go to market to vouch for HBCUs in gaming,” he says. “So far we’ve helped infuse nearly $1.7 million into the black community in one year,” much of that from a $1 million commitment from Verizon as part of the very first HBCU esports league season concluded in spring 2021. The season attracted 14 million viewers. Among the results of the program thus far has been the securing of 15 internships for students with such companies as Epic Games, Riot Games, Evil Geniuses and Version One. 

“One of my personal goals is through our programs we helped place X number of jobs into the African-American community,” Johnson says. “If we help 10 kids get jobs that pay $70,000 a year, we just put $700,000 into the black community through salaries.” 

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The first season of the HBCU Esports League garnered 14 million viewers.
Graphic courtesy of Cxmmunity

Similar economic development goals are afoot in New Jersey, where Demetrios Roubos, information security officer and computer science adjunct faculty member at Stockton University, serves as program manager for Stockton Esports. The school is partnering with the New Jersey Economic Development Authority to launch an esports innovation center in Atlantic City, a town that’s lost its share of jobs over the past couple decades. Esports could help revitalize the area, he says. And the decentralized nature of esports, with a relatively low barrier to entry (a decent computer, a mouse and a camera) means participation in games could translate into workforce participation inside and outside the gaming world. 

“I have a lot of students hungry to get into the industry,” he says. And as big-time college sports are just getting around to partial compensation of athletes thanks to the landmark “name, image, likeness” decision against the NCAA by the U.S. Supreme Court this year, esports athletes like those at Stockton can show traditional athletes the way forward. 

In a twist on the usual sanctimony about the purity of collegiate athletics, Roubos notes that the collegiate esports scene “hasn’t been polluted by the traditional restrictions of athletics. Esports athlestes can make money. It’s fantastic. Our esports program has been pretty successful. Rocket League students have won substantial amounts of money playing the game, and the schools don’t interfere with that. It’s incentivized them to get more involve with the industry,” whether it’s through Twitch-casting, YouTube or other modalities, or through developing ad sponsorships or creating other ancillary content. 

Signs of the Future 

Conversations with experts, institutional leaders and players across North America reveal an emerging family of esports professions and activity that produce income, sales and jobs — three things on which most businesses and communities are happily hooked. 

“My role was created in 2020 as we grew in the deliverables we promised our fans and partners,” says Sylvia Christina Amaya of her events role at Team Liquid. “I now have a team of eight.” 

At the same time that a larger menu of career and technical education programs is appearing in high schools and higher education institutions, so are esports teams (a phenomenon to be explored in part two of this three-part series). Meanwhile, the elite pro teams are being sponsored by major organizations from Daimler to the U.S. Army. “When you’re playing ‘Call of Duty’ and you end up against a team composed of a bunch of Army guys, you’re about to get killed,” says my Site Selection colleague Richard Nenoff, a lead designer and dedicated gamer who says he takes a lot of inspiration stylistically from video games in his day-to-day graphic design work. A fellow bookstore veteran who remembers his “Myst” and “Riven” roots, Nenoff says, “The appeal is the same as books, an alternate world where I’m in a setting where I’d never be in reality. Improving graphics have made it so you can have that experience in a more visceral way.”

Top States in Employment Impacts of In-State Video Game Industry ($000s)

State A. Direct Impact B. Indirect Impact C. Induced Impact D. Total Impact
U.S. 143,045.0 64,001.2 64,001.2 328,795.4
California 57,434.0 33,844.2 70,331.1 161,609.2
Washington 15,030.0 7,188.1 14,725.1 36,943.2
Texas 9,806.0 3,577.5 6,312.1 19,695.6
Florida 6,314.0 2,527.7 3,990.6 12,832.3
New York 4,985.0 1,482.8 2,487.0 8,954.8
Nevada 4,211.0 1,689.7 2,375.7 8,276.4
Illinois 3,491.0 1,078.0 1,933.8 6,502.8
North Carolina 3,078.0 1,086.7 1,801.3 5,966.0
Idaho 1,629.0 1,651.0 2,024.0 5,303.9
Minnesota 1,747.0 1,346.1 1,854.0 4,947.1

source: "Video Games in the 21st Century," Entertainment Software Association, TEConomy Partners 

Success in the industry can be as visceral — and accessible — as the game play. According to Video Games in the 21st Century: The 2020 Economic Impact Report” prepared for the Entertainment Software Association by TEConomy Partners, while giants like Electronic Arts get headlines, the industry is notable for its accessibility by new ventures and entrepreneurs, and a distinct lack of typical barriers to entry found in other sectors, including location. 

A Beginner’s Esports Glossary

AFK: away from keyboard (unavailable)

Aimbot: “A cheat that cheaters use to have the computer aim for them, the cheats,” says PC Gamer magazine.

AR/VR/MR/XR: Augmented/virtual/mixed/extended reality

Buff: To make a weapon or tool more powerful

Camp: to sit on an advantageous location in the game to milk it for points or kills

Cheat code: special codes or methods which allow gamers access to advantages such as extra lives, more power, extra equipment and higher levels; initially referring to codes used in game development and testing (and often hidden as “Easter eggs” for a player to find), cheat codes can also be developed by hackers to exploit bugs in a game and gain an unfair advantage; “The usage of cheat codes has lost favor mainly due to the rising popularity of online multiplayer games where fairness is expected and valued for a complete gaming experience,” says Techopedia.

Cheese: a strategy that enables victory in a way not foreseen by the game developer

Easter egg: a hidden message, found in the form of a video, game feature or image (see cheat code)

FPS: First person shooter game

Gank: the act of multiple players teaming up and taking on one or more players to eliminate them.

GG: “Good game” congratulations at the end of a game

Gold farming: Hoarding and then selling video-game currency to other players for real money

Lag: the time between the action of a player and the action of the in-game character on screen

Metaverse: the idea of interconnected virtual or simulated worlds that offer social interaction, role-playing, identities and creative experiences whose collective opportunities could outshine those of the real world.

MMORPG: Massively Multiplayer Online Role-Playing Game

Nerf: a move by a game developer to make a particular weapon or move less powerful

Rage quit: Leaving a game abruptly out of unhappiness with the result

Shoutcaster: broadcaster of a live esports event

Skins: In-game costumes, hats or other accoutrement a player can purchase with real money

Smurf: Known in many sports leagues (and other endeavors) as “slumming” or “sandbagging,” the practice of bringing a high skill set to a competition with players of lower skill via use of a “smurf account”

Spawn: The spontaneous manifestation of a player, weapo, or item on the playfield of a game.

Sources: DOT Esports; Unity; PC Gamer; Fossbytes; LegitGamblingSites.com, Roundhill Investments

“Driven at its core by intellectual talent and digital environments, the industry is not limited by traditional infrastructure and supply chain needs to specific locations,” the report notes. “There are major geographic clusters of video game companies (notable concentrations are present in California, Washington, Texas, Florida and New York, for example), but the industry has a footprint of businesses in every U.S. state and provides economic development opportunities for urban, suburban, small town and rural communities alike. Today, the video game industry stands among the nation’s premier technology sectors and continues to enjoy success and ongoing growth prospects,” riding 14.4% industry growth from 2014 to 2019. 

The spinoff impacts are strong: Darvasi says for a number of musicians he knows, the biggest moneymaking opportunity is scoring video games. The same goes for a wide array of programmers, storytellers and artists … even anthropologists. “ ‘Assassin’s Creed’ has a whole stable of historians,” Darvasi says. “It becomes an industry in and of itself.” 

All of which is a long way from the stereotype of solitary gamers decaying in their parents’ basements, he says. 

“Now it’s the exact opposite. During the pandemic, video games helped save kids. They’re actually hyper-social, hyper-interactive media. I would never say they are a replacement for face-to-face interaction, but they’re an important part of connection in a modern world. When you look at the possibilities that video games, simulation and gaming culture offer, it’s an incredibly powerful social media. 

“Games are emblematic of the moment we are living,” Darvasi says, as the industrial age continues to give way to (and in some ways, merge with) the information age. “They are not trivial … The same way a film or printed book are expressions of a factory culture, games are the most direct expression of a computer culture,” he says, and as numeric, rules-based entities they could even hold the key to how corporations manage their own strategies and transitions. Having a huge and diverse cohort of young people who have grown up playing them means having an entire population at your fingertips that is well versed in constant communication, remote collaboration and filling roles. 

Darvasi recalls an oft-repeated quote from 2013 from researcher John Seely Brown, who said, “I would rather hire a high-level World of Warcraft player than an MBA from Harvard.” As a hybrid working world emerges, esports culture is being mainlined into the new ethos. It might even be its beating heart. 

“It’s more indicative of the way things are going than necessarily transferable,” he says of my original quest to identify transferable skills. “It’s not necessarily that your esports player is going to be a great team player in a corporate environment. But certainly they are an emblematic indication of the kind of group coordination we see as necessary to solve a very complex world we’re moving into. It requires a team effort, and no one individual is usually sufficient to undertake it. A lot of the collaboration that takes place in these game spaces is the way we are solving problems in the modern world.” 

This story was produced as part of the Higher Education Media Fellowship at the Institute for Citizens & Scholars. The fellowship supports new reporting on issues related to post-secondary career and technical education. 

Hi-Rez Expo 2019, a weekend-long event that featured esports world championships for Hi-Rez Studios games SMITE and Paladins, took place in the company’s hometown of Atlanta in November 2019.
Photo courtesy of Hi-Rez

Adam Bruns
Managing Editor of Site Selection magazine

Adam Bruns

Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.

   



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