How Theaters Are Integrating Esports

TNL Take: This week Australian theater chain Hoyts formed a partnership with Gfinity to bring dedicated esports spaces to its locations starting with Sydney's Moore Park. The league will have city-based franchises competing in 3 titles: Street Fighter V, Counter-Strike and Rocket League.

Last year The Next Level looked at the rising opportunity between theaters and esports. Since then, there have been further inroads made and let's examine the latest trends.

 

/01 BRANDS

Coke.jpg

By far the biggest brand taking advantage of esports in theaters is Coca-Cola. For the past few years they have held theater viewing parties for the League of Legends Finals and Overwatch.

Coke is not slowing down in 2018 with the Smite World Championship which took place last month. As Coke is a pouring partner within the theaters and if the ROI is there, expect more of these viewing parties going forward - and hopefully more brands. 

 

/02 DEDICATED ESPORTS FACILITIES

chinese-theatre_Amanda Edwards.jpg

Similar to Hoyts, the TCL Chinese Theatre in Hollywood is launching an esports facility within the complex.

The facility will serve a dual function: as a MX4D Motion EFX movie theatre in addition to serving as the "first immersive spectator theater hosting competitive esports tournaments".

The CEO of TCL Chinese Theatre had some interesting comments as to their future goal by stating a "global network of immersive MX4D esports theaters" which could be linked together to form a movie theater/esports platform. 

I'm still not sure if the MX4D experience is needed for esports and little expansion has been announced since the announcement.

Another announcement was made in November when Landmark Cinemas in Peoria, IL opened an eBash Video Game Center which will have numerous PC's, Xbox's and PS4's.

What's even more interesting is that Landmark Cinemas was previously showing independent movies on Blu-Ray which was costing them more than bringing in revenue.

Pricing ranges from $4/hour to $15 for the day, which is very fan friendly.

 

/03 SUBSCRIPTIONS

Last month, Cinemark unveiled a monthly subscription program named Movie Club offering 1 ticker per month at a discounted price of $8.99, 20% off concessions and the ability to roll over unused tickets every month.  For comparison, a recent outing for 2 to "The Last Jedi" cost me $50+ in Brooklyn.

The subscription model for movies could easily translate to esports. Substitute movies for esports events, offer a subscription model for esports only or offer a combined package for both movies and esports. Many ways this could work.

 

Again here's why esports in theaters works:

/01 REAL ESTATE ROI

"Historically 70-75% of a theater's business is done Friday through Sunday, so they are relatively inefficient operations Monday through Thursday," said Eric Handler, senior equity analyst for MKM Partners.

In addition, using the Coke minimum ticket model, theaters can determine what content will be most lucrative.

/02 MULTIPLE LOCATIONS

Can't make it to NYC, LA, Vegas or DC to watch your favorite eSports event, now the content is increases by an order of magnitude. It also provides a...

/03 COMMUNITY BASED EXPERIENCE

Instead of watching an eSports event by yourself at home, you can join other fans and watch together.

/04 MONETIZATION

Look at the new revenue streams now available to theaters:

  • Tournament Fees
  • Sponsorships and Advertising revenue
  • Food and Beverage

Just think of this scenario: "Enjoy your time Bobby, Mom and Dad are going to be at the bar right outside"

TNL esports Podcast 016 featuring Andy Babb from Super League Gaming, which hosts events at theaters around the country.

Movie Theaters and eSports: The Golden Opportunity

MOVIE THEATERS AND ESPORTS: THE GOLDEN OPPORTUNITY

Movie Theaters and eSports: The Golden Opportunity (Photo: ESL )

Movie Theaters and eSports: The Golden Opportunity (Photo: ESL )

TNL Take: A lot of sports Executives see the large, cheering crowds at eSports events at places like the Oracle Arena, Barclays Center and the hallowed Madison Square Garden and get excited about the future potential.

While seeing 20,000 people do the wave at MSG is pretty amazing, in 2017 there maybe 4 nights of eSports events - compared to close to 100 nights with just the New York Knicks and Rangers alone.

While it works, the current quantity of eSports events is just not there yet to continually fill stadiums.  However there maybe a real-estate opportunity that already exists that could be a perfect fit: Movie Theaters.

Here's a look back at how movie theaters and eSports became connected and what the future holds.

 

2015: SUPER LEAGUE GAMING RAISES ~$6M TO BRING ESPORTS TO THEATERS

Super League Gaming's Minecraft Event (Photo: Miriam Di Nunzio/Sun-Times)

Super League Gaming's Minecraft Event (Photo: Miriam Di Nunzio/Sun-Times)

Super League Gaming made their entrance into eSports by raising ~$6M through essentially Series A/B rounds in 2015.

Working with Canada's 3 largest movie chains - Cinemark Theaters (which invested in their Series B) Regal Entertainment Group and AMC Theaters and iPic Theaters -  SLG allows gamers to play together on the big screen.

After a 25 city test, Super League Gaming launched their Minecraft league in the Fall of 2015. Players bring their laptops, phones, iPads to the theater and play directly on their devices and then SLG's magic tech combines all the action where everyone can view it on the screen. 

I love this idea and will dig in deeper why it works so well.

 

2015: COCA-COLA HOSTS LEAGUE OF LEGENDS FINALS VIEWING PARTIES ACROSS THE US

Coca-Cola League Of Legends Theater Viewing Party (Photo: Coca-Cola)

Coca-Cola League Of Legends Theater Viewing Party (Photo: Coca-Cola)

When Coca-Cola invests in any new area, they tend to focus on what associates them with a large global Brand. Which in eSports in 2015 - and even today - is League of Legends.

In August, the League of Legends Summer Split, which has two teams battling to get an automatic slot into the the World Championship, was shown in 30 theaters across the US

The theaters ranged from Atlanta, New York, Chicago to smaller locales like Leawood, Kansas and Lancaster, Ohio.

Let's also not forget Coca-Cola sells a ton of product in theaters.
 

2015: CANADA'S CINEPLEX INVESTS $15M INTO ESPORTS

Cineplex Invests $15M Into eSports (Photo: Cineplex)

Cineplex Invests $15M Into eSports (Photo: Cineplex)

Just a month after Amazon bought Twitch for $1B, Cineplex announced they were going to buy a majority stake in WorldGaming, a gaming tournament platform, for $10 million and invest another $5M to create an eSports league across their chain of theaters.

Cineplex has 162 theaters across the country with 1,652 screens, visited by 74 million people annually, which is about half of Canada's population.

 

2015: COCA-COLA HOSTS LEAGUE OF LEGENDS FINALS VIEWING PARTIES AT 7 CINEMARK THEATERS

Coca-Cola's 2nd League of Legends Viewing Party (Photo: Coke eSports)

Coca-Cola's 2nd League of Legends Viewing Party (Photo: Coke eSports)

After their first foray into bringing eSports to the big screen, Coca-Cola will be replicating that experience across 7 Cinemark Theater locations.

Two things that Coke expanded on from their 1st program: 1) Collectible cups and branded thundersticks, which are those "baseball bat" looking things that fans use to cheer on their team. 2) Allowed fans to vote for additional cities if they weren't near locations like Salt Lake City or Los Angeles.

 

2015: BY EXPERIENCE BRING'S ESL ONE'S FINALS TO THEATERS IN 25+ COUNTRIES

BY Experience and ESL Bring eSports To Theaters In 30 Countries (Photo: BY/ESL)

BY Experience and ESL Bring eSports To Theaters In 30 Countries (Photo: BY/ESL)

ESL, BY Experience and Fathom events decided to take Coke's theater initiatives and make it even bigger by showing ESL One Counter-Strike Finals which took place in Cologne, Germany in screens in over 25 additional countries

Another interesting angle was having an eSports commentator exclusively for the cinema experience.

 

2016: COCA-COLA SHOWS OVERWATCH CONTENT IN THEATERS

Coke3.png

Coca-Cola's 3rd foray into their theater partnership was associated with the launch of Blizzard's Overwatch.

While this wasn't associated with an eSports event, fans got to see cinematics, shorts and short films around the heroes in the game.

One issue was that the content wasn't exclusive to the theater experience which I'm sure Coke learned from.

 

2016: COCA-COLA DOUBLES-DOWN ON LEAGUE OF LEGENDS VIEWING PARTIES WITH A TWIST

Coke's Twist To Theater Viewing Parties (Photo: Coke eSports)

Coke's Twist To Theater Viewing Parties (Photo: Coke eSports)

We've gone through a few of Coca-Cola's theater sponsorships but last year they added a new feature

The change in this partnership is that theaters won’t actually hold the 2016 League of Legends viewing event unless a minimum number of tickets are sold.  This allows individual theaters to essentially decide if eSports or a regular viewing would make them more revenue. 

Smart on both sides as Coke doesn't need to guarantee a minimum and the theaters can show eSports or whatever they were going to play anyways.

My estimate is that theaters needed to sell 200 tickets for it to be shown.

 

2017: SUPER LEAGUE GAMING LAUNCHES LEAGUE OF LEGENDS CITY REC

Super League Gamings City Based League (Photo: Super League Gaming)

Super League Gamings City Based League (Photo: Super League Gaming)

After initially starting with Minecraft, Super League Gaming launched a city based League of Legends league called City Rec. Essentially in the cities pictured above, local players can play in the featured match which is broadcasted on the screen.

For more insight, I spoke spoke Andy Babb, EVP of Super League Gaming.

TNL ESPORTS GUEST PODCAST 002: ANDY BABB, EVP SUPER LEAGUE GAMING

 

2017: HOLLYWOOD'S TCL THEATER GETS ESPORTS SECTION

Hollywood's TCL Theater (Photo: Amanda C Edwards/ Shutterstock)

Hollywood's TCL Theater (Photo: Amanda C Edwards/ Shutterstock)

The famous TCL Theater in Hollywood - formerly Mann's - are launching an eSports theater and experience within their complex.

The new area will be used for both MX4D Motion EFX and the "first immersive spectator theater hosting competitive eSports tournaments" - whatever that means.

 

ESL BRINGS ESPORTS TO 1,500 GLOBAL THEATERS

ESL One's 

ESL One's 

ESL is expanding their partnership with BY Experience to bring 5 live eSports events to 1,500+ theaters globally.  The "eSports in Cinema" series is scheduled to launch in July which will include action from ESL One Cologne and 4 TBD events.

In addition, ESL will debut a new eSports documentary from those that worked on The Smartest Men in the Room, Superheroes and Square Roots: The Story of SpongeBob SquarePants.

 

WHY DOES THE COMBINATION OF MOVIE THEATERS AND ESPORTS WORK SO WELL?

 

/01 REAL ESTATE ROI

"Historically 70-75% of a theater's business is done Friday through Sunday, so they are relatively inefficient operations Monday through Thursday," says Eric Handler, senior equity analyst for MKM Partners.

In addition, using the Coke minimum ticket model, theaters can determine what content will be most lucrative.

 

/02 MULTIPLE LOCATIONS

Can't make it to NYC, LA, Vegas or DC to watch your favorite eSports event, now the content is increases by an order of magnitude. It also provides...

 

/03 COMMUNITY BASED EXPERIENCE

Instead of watching an eSports event by yourself at home, you can join other fans and watch together.

Just like traditional sports, I believe this makes it even more attractive to the eSports fan.

 

/04 MONETIZATION

Look at the new revenue streams now available to theaters:

  • Tournament Fees
  • Sponsorships and Advertising revenue
  • Food and Beverage

Just think of this scenario: "Enjoy your time Bobby, Mom and Dad are going to be at the bar right outside"

 

Brilliant.