Melbourne Could Be Next For Overwatch League

TNL Take: As the first year for Overwatch League comes to its conclusion, it's never too early for the rumor mills to start churning for year two.

Sources have told the Australian Financial Review that Blizzard is targeting Melbourne for one if its expansion slots. Activision's CEO of Esports Leagues Pete Vlasetelica previously mentioned that the league would expand from 12 to 18 with "two from the Americas, two from Asia-Pacific, and two from Europe and the Middle East".  Overwatch League currently has 9 teams in the US, 2 in Asia and 1 in the UK.

The Australian esports scene has emerged over the past few years including sports clubs from the AFL like Adelaide Crows and Essendon Bombers both investing in teams. Gfinity recently launched their Elite Series city-based league including Melbourne, Sydney, Brisbane and Perth.

Further, the Victorian state government promises to make Melbourne the home of esports after announcing the country's biggest event, Melbourne Esports Open the first weekend of September. In partnership with TEG Live and ESL, the event is expected to draw 10,000 fans each day.

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Whoever gets the one of the next 8 slots will need to pony up a pretty penny however. From the inaugural season buy in of $20M, expansion slot fees have now risen to $30-$60M sources tell ESPN

Nate Nanzer, Commissioner of Overwatch League, wouldn't confirm the rumor but added:

"We're open to having a conversation about any city.  If somebody wants to have a conversation with us about Melbourne, we would definitely have the conversation and be very interested. It's a global league, so we want big, globally recognisable cities. Our focus is really on expansion in Europe and throughout Asia Pacific, of which Australia and New Zealand is a part".

Here's The Next Level's previous 2-part series on Australia and esports.

Australia and Esports: The Challenges and Opportunity

Industry Guest Post: Dave Harris has spent over 15 years in traditional sports with his last major role being General Manager at National Rugby League.  Dave is currently the Managing Director of Guinevere Capital Esports & Entertainment with a portfolio including LG Dire Wolves, Supa-Stellar, SCG Esports High Performance Centre and The Next Gamer.


In Part 1, we looked at Australian esports focused on broadcasting partners, live events and Non-Endemic brands. In Part 2, we'll look at the challenges as well as the opportunity ahead.

 

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CHALLENGES

Infrastructure - Australia has a relatively small population (~24 million) spread across the world’s 6th largest country (5% of the world’s land area).  This combination of factors has meant the internet infrastructure has not been developed to the level one would expect for a first world country. 

Isolation - Aside from the infrastructure, the isolation of the country itself from the rest of the world means online completion against other countries (aside from the other main player in the Oceania region, New Zealand) isn’t practical.  This isn’t a technology problem but a “speed of light” problem due to the distances involved.

Developing under the microscope – There are many “developing regions” around the world but Australia is one with English as its native language, meaning that when something goes wrong - it is often pasted and debated in social media across NA, EU and beyond.  Aussie teams and players also sometimes generate international social media exposure by following the Australian tradition of not being intimidated by big name opposition (and making a point of telling them)

 

Gfinity In Australia (Photo: Joe Brady)

Gfinity In Australia (Photo: Joe Brady)

OPPORTUNITY

While its isolation and sparse population is in many ways a challenge, it means the Australian market is often used as a testing ground for western markets by global technology, sport and entertainment groups.  Twitter has run a number of esports broadcasts and collaborations with organisations such as Riot Oceania.  In traditional sport the country has also managed to “punch above its weight” over the years through innovation and the formation of programs such as the Australian Institute of Sport.  Without the same depth of talent in a small population, there is an imperative to develop and make the most of the talent which is present rather than having a “churn and burn” approach used elsewhere.

Playing Talent – Using Renegades in CS:GO as an example, Australian talent has previously felt the need to relocate overseas to be competitive.  Damien Chok is another example having won approximately $1m in 2017 playing DOTA2 - including winning The International with Chinese team Newbee.  However, with more direct access into global competition being opened up to Oceania, developing and playing domestically has become viable.  Some Australian teams are already managing to break through as top performers on the international stage such as Kanga Esports in Paladins.

Casting – One area Australia does over index in is casting where using League of Legends as an example, many of the biggest names are Australian such as Chris “PapaSmithy” Smith, Julian “Pastrytime” Carr and Max “Atlus” Anderson or cut their teeth in the region such as Indiana “Froskurinn” Black, Matthew “Fish” Stewart and many more.

Research & Education – The recently opened Esports High Performance Centre in the Sydney Cricket Ground precinct is an initiative mirroring the successful traditional sports model for developing talent.  A partnership is in place with the University of Technology Sydney sports science faculty with a number of programs being translated from their work and research from the sports world.  Similar facilities have been proposed by other Australian organisations including Legacy Esports at the Adelaide Crows base. 

Borderless Esports – Australia is a logical base to launch from into other underdeveloped market such as India and South Africa (through strong existing sporting links) or regional neighbours such as Malaysia and Philippines (with considerable internet penetration, English fluency and population).  The pyramid is upside down in esports compared to traditional sports, with amateur play financing professional leagues rather than vice versa.  The Australian population is not going to provide the same player base and opportunities that can be used to develop the scale that can be achieved elsewhere.

Governance – A global challenge of the industry is the perceived fragmentation and lack of governance, particularly when it comes to sponsors and governmental support.  The Esports Games Association Australia launched in late 2017 as a member based body aiming to unify the local industry using best practice principals from traditional sports governance.  Being at an earlier stage of the cycle, the opportunity is available to implement a self-governance system for key stakeholders in Australia.

 

CONCLUSION

While Australia has only just started its esports journey into the mainstream, there is a lot of optimism that the gap with other regions can be closed avoiding the pitfalls that have been experienced elsewhere.  Huge opportunities still remain in the region while people may feel they have missed the boat in other places.  2018 is going to be an exciting year down under and worth keeping an eye on!

Australia and Esports: Years Behind But The Potential To Innovate - Part 1

Industry Guest Post: Dave Harris has spent over 15 years in traditional sports with his last major role being General Manager at National Rugby League.  Dave is currently the Managing Director of Guinevere Capital Esports & Entertainment with a portfolio including LG Dire Wolves, Supa-Stellar, SCG Esports High Performance Centre and The Next Gamer.


Australia is known globally for its strong (sometimes obsessive) sporting culture but far less so when it comes to esports.  However, the same triggers that have propelled esports into the mainstream in regions such as North America started to occur in Australia in 2017.

 

TRADITIONAL SPORTS

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A major driver for legitimising esports is endorsement and investment from traditional sports.  Following Guinevere Capital investing in LG Dire Wolves in September 2016, 7 of the 8 League of Legends, Oceanic Pro League teams have now been bought out by groups with traditional sport and entertainment experience.

Australian Football League (AFL) – In early May 2017, the AFL (Australia’s largest professional sport) announced its interest in involvement in esports.  In mid-May, AFL team the Adelaide Crows became the first traditional sports team (after over 6 months researching the space) to acquire an esports team, buying Legacy Esports.  In December 2017, Essendon Bombers followed suit buying into Abyss Predator who had already been bought out by sports investment group ESE.

A-League (Soccer) – In August, Melbourne City (part of the City Football Group, along with New York City and Manchester City) announced the signing on their first FIFA esports player.  A full competition with 2 representatives from each A-League club has since been announced in December 2017.

Many more traditional sports teams are investigating ways to enter the esports space but it must be noted that Australia has one of the most congested traditional sports landscapes in the world and teams generally don’t have significant free cashflows or billionaire owners standing behind them.  The propositions to local sports teams inviting them to start their own esports franchises (as opposed to buying/partnering with existing esports organisations), do not appear to have yet hit the mark.

 

LIVE EVENTS

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Intel Extreme Masters Sydney – IEM Sydney in May 2017 was a game changer for Australian esports with 14,000 attendees at Qudos Bank Arena across the weekend and 8 million viewers online.  Attending a live event is often the turning point for non-endemic sponsors and other stakeholders to realise esports is a “real thing”.  The rowdy crowd mimicking (and potentially surpassing) a traditional sporting event achieved notoriety along with the iconic “shoey”.

Gfinity – Backed by Australian Stock Exchange listed company HT&E, the Gfinity Elite Series (based upon the Gfinity UK model) has been announced for 2018 with Alienware as presenting partner and a soon to be announced live venue in Sydney. 

 

TRADITIONAL BROADCASTERS

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SBS – Were the first Australian Free-To-Air channel to broadcast esports in 2016 with the IESF Word Championships Qualifiers

Ch 7 – Entered esports with their multi-channel platform screenPLAY in 2017 and it will be interesting to see how they refine their initial strategy in 2018

 

NON-ENDEMIC BRANDS

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St George Bank Have been at the forefront of major non-endemic brands entering the Australian Esports market.  Initially through association with the CS:GO Zen League, they have since partnered with Channel 7 and their gaming/esports property screenPlay.

McDonald’s – The first Quick Service Restaurant to come into the esports space through the StarCraft 2 World Championship Series and the Throwdown Rocket League OCE Championship 

Hungry Jacks – Just announced as the Presenting Partner of the League of Legends, Oceanic Pro League this is one of if not the biggest deals in Australian esports and will be integrated across the competition and platforms which is aiming to have  lighter, fun theme this year.  For those unaware, Hungry Jack’s is the Australian version of Burger King. 

 

Part 2 will focus on both the challenges and opportunity that Australia has in esports.