KJK Partner Scott Norcross discusses the latest trends and innovations in eSports facilities with BD+C’s David Barista.
KJK Partner Scott Norcross joined Thom Chuparkoff, Director, and Geoff Aiken, Division Director of Sports, Entertainment & Technology at OSPORTS, as they discuss the history, recent expansion and future of eSports facilities with David Barista of Building Design and Construction.
David Barista: Okay, welcome everyone. Today we have a trio of experts to discuss one of the hottest building typologies in the market today, and that, of course, is Esports. We’ve seen these facilities pop up in convention centers, on college campuses, and it’s a trend that our editorial team has been tracking closely. So joining us today is Thom Chuparkoff, director of OSports, a sports and entertainment facilities architecture, planning and design firm. Geoff Aiken is division director of sports, entertainment and technology, also with OSports. And we also have Scott Norcross. He’s a partner with the law firm Kohrman, Jackson and Krantz or KJK. So gentlemen, thanks for joining us today.
Geoff Aiken: Thanks for having us.
Scott Norcross: Yeah.
Thom Chuparkoff: Thanks.
David Barista: Okay. Let’s set the stage with a quick sort of state of the state of the Esports facilities market. It’s relatively new. I mean, I think we wrote our first piece on this market a couple years ago. It’s still quite niche, but we’re starting to see larger projects being developed, and more widespread development of such projects. So I’m wondering if you could kind of, again, set the stage with where we stand with Esports. What are some of the latest advancements on the real estate side of this sector?
Geoff Aiken: So, just to take a step back on where it’s really started, about in the 1950s is where this all began. Since then, it’s progressed mostly with the advent of personalized PCs in the 1970s and ’80s. Nineties, you’re starting to see a lot more tournaments, and it’s really not until 2000, with Twitch, where you see the real explosion of content and audience maturation. From there, you really start to see ties collegiate levels, NCAA is now involved with this, and also a purpose-built facility. So because of the widespread audience, you’re seeing now that investment to take it to the next level, with the Esports arenas really starting to build in the 2010’s, and accelerating rapidly today.
David Barista: Yeah, Geoff, one of the pieces we wrote covered the market for, or the demand for, these types of facilities, and who actually engages with them, who goes to these events, and also tracks them online, through Twitch and other platforms. And what they found was it’s a market that a lot of sponsors and advertisers want to reach. They are folks that make pretty good money. They are professionals, higher education, multiple degrees. So it’s a great market, and I think it’s one that will sort of sustain itself and grow, so it’s been interesting to track. I’d love to talk about sort of the business model here. And the franchises themselves, the actual games and the game developers, have a say in this, correct, Scott? You want to talk a little bit about that?
Scott Norcross: Yeah. So I think what you’re seeing trend-wise is that, from a franchise model, games are sort of driving development in a sense. So if you take Call of Duty, for example, Call of Duty, last year, came out and said we’re going to have a designated, I think it’s, ten or 15 different teams all geographically located around the country. So, for instance, Cleveland could have a team, Chicago could have a team, Minnesota has a team. And so at that point, you then see they’re going to drive 3,500 to 4,000 attendance there. So what that does is say we need a designated-use facility for Esports, that can be used for Call of Duty, League of Legends, FIFA there. And then it becomes a meeting spot, a centralized meeting spot, for that.
So that’s where the franchise model is driving it, but also drives it on a sponsorship level. Because now, within those different builds, we now are putting forth partnerships within for sponsorships, streaming and all, that we can sort of purpose build a facility for it so.
David Barista: Yeah. And as I mentioned earlier, we have seen facilities on college campuses, we’ve seen sort of pop-up-type developments, and of course there are standalone, and some adaptive reuse of convention centers, interesting projects. I’m wondering, have you guys sort of documented the types of Esports facilities that exist out there, and maybe some that we might see in the near future?
Geoff Aiken: So what we took a look at is, to what you’re saying, the catalog of what’s out there in the market right now, and really that boils down to three types of facilities. First, you have the collegiate facility, which right now is somewhat hosted on the recreational side of colleges, but moving to the athletic side. Typically around 3,000 square feet, and maybe a little bit larger, but really focused on gaming. The next level of facility is really the public-use facility, so it’s a pay to play hourly. You have now maybe 100 to 200 gaming hubs, and you’re in a warehouse-type of space that’s probably around 15,000 to 20,000 square feet. You might have a stage in there to have some live events. But it’s really not until you get to professional level where it’s events-driven design, where you have a capacity for 1,500 to 3,500 seats for viewing. You also have now food and beverage amenities. And it really transforms itself really into that professional tier environment.
And so what we took a look at is how to really adapt some of the best features of those prototypes into a prototype to move into the future. And it’s really grabbing a little bit of each, trying to get the viewing capacity up to at least a few hundred seats for tournament play. You also have a very large integration of media, studio space, spaces for casters to shape their craft as well, since the caster side is almost just as important as the competitive side of Esports. And so you start to get these different areas of energy or revenue streams that, because the player is mobile, we want them to touch as much, and be able to experience as much, in the facility. So we don’t really anticipate the viewer or the patron staying put. We anticipate them to be mobile, not only with mobile gaming, but also physically mobile within that space.
David Barista: Yeah. When they’re at the event, they’re moving around, and they want to be able to track the action no matter where. And it’s just interesting to listen to you. And as we report about traditional sports facilities, many of these same sort of concepts are being adapted or considered. How do you order food from your seat, how do you track the game when you’re walking around the facility, how do you have different experiences within that facility? Not just watching the game with your own eyes, but through other interactive experiences. I’m wondering if you could talk about how you’re adapting maybe design ideas from the traditional sports facilities worlds. Are there similarities across the two building typologies? Are there major differences? It would be interesting to talk about that.
Thom Chuparkoff: I mean, there are a lot of transitional aspects of arenas and event spaces, but in events spaces we lean to the convention side of the business, even in the old big box stores. It’s just like any other sport. I mean, it’s focus driven, right? You don’t attack baseball the same way you attack football, and you certainly don’t attack football the same way as you attack soccer, right? Soccer is an example, is 90 minutes is 45 focused minutes. People aren’t mobile in that 45 minutes, right? They are watching content. And then in-between, in that 15-minute intermission, that’s when you’ve really got to capture the movement, and really plan for that global movement of the facility.
Where, so, taking tips about how you securely or effectively move people through a building, and how you get them to go to team stores and food and beverage, and those kinds of components, with Esports it’s very transitional, everyone’s moving around, right? So having the concourses, and really understanding how people flow through those things, really start to create boulevards of interaction, and boulevards of immersion, right? So for us and what we’re seeing, that really is like, again, we always talk about fan experience. And in this regard, fan experience is being inclusive, right? Fan experience is being immersed into the environment. So trying to take all the good things that happen in football arenas, mid-sized arenas especially, because it’s such a consolidated space with an 8,000-seat type of event for. It’s really easy to kind of try to think about how people really want to move.
And the food and beverage is unique too, right? Because we don’t really call them concessions anymore, although with COVID, concessions has changed dramatically in its own right. But in an Esports component, it’s more of a refueling station, it’s a grab and go. People eat a Nutri-Grain bar and a Red Bull, and then they go on to their next thing. So really understanding how different it is from a viewer and spectatorship, is really where we can take our diverse background in all kinds of sport and event, and really kind of cross-pollinate all those ideas into transitional ideas.
Geoff Aiken: And then one of the key overlays is really the technology and the communications, and the infrastructure, that brings that all together, whether it’s AR or VR. It is the capacity to game and receive and stream from the facility. And so we also take a critical look on how all of that content media plays an important role in these facilities.
Thom Chuparkoff: It’s almost a bigger role. Your speedier internet is a tremendous aspect of that, and being able to not have a generator go down or a system that goes down. So when we’re talking about adaptive reuse of other buildings, really understanding what that infrastructure support system really looks like.
David Barista: You mentioned food and beverage. I mean, merchandising, does that come into play? Are there other sort of ways of attendees, participants, spend money at those facilities? More bars and restaurants? I don’t know, is that a different sort of dynamic than you would see at a football game or a baseball game?
Thom Chuparkoff: Yeah, because it’s not the traditional retail either, right?
Scott Norcross: Mm-hmm (affirmative).
Thom Chuparkoff: It’s video cards and peripherals, and other types of electronic components that really elevate the gaming.
Scott Norcross: And I think to some extent, what you’re seeing expansion-wise now in the last two years or three years, is you’re seeing a big push from sort of non-endemic sponsors. So where you would have the peripheral joystick at one time or the chair, now you’re seeing … Yesterday I read how Burberry is sponsoring Infinity, and now they’re doing Puma and Nike. And so you’re getting those traditional sponsors that you would see in any normal sporting event are now taking place. Coca-Cola, Red Bull, all of them are sort of putting their money in, because they want to reach those age groups that are participating in this. And they’re also seeing a trend in traditional sports, that there are people aging out of traditional sports, and they’re trying to capture that all at once.
So I think that that is big, when we start talking about food and beverage and merchandise, is the look of these organizations is they’re lifestyle brands, at the end of the day. They’re just not gaming, they’re clothing, they’re cars, they’re everything. And that’s really when you see the biggest growth in organizations. You see the ones that you’re going to see in the Forbes list, that $400 million values, it’s because they don’t just have gamers, but they have a clothing line, they have everything. They’re just as big as any franchised team that you’ll find out there.
Geoff Aiken: Yeah, like Tencent, right?
Scott Norcross: Yeah, exactly.
Geoff Aiken: It’s a $30 million investment, and it’s just like let’s go.
Scott Norcross: Right.
Geoff Aiken: Let’s figure it out.
Scott Norcross: Right. Right.
David Barista: And what about the VIP experience? Is there a VIP experience? You’re talking about, obviously, the pro-level arenas. Is there something that our readers, EEC firms, could offer facilities like this? I was thinking of a concept chair that we published as part of our youth sports package a couple of years ago, where it was almost like a gaming chair on steroids, in a sense. And it’s a great way to sort of engage with the action that’s happening there in the arena. I don’t know, have you guys thought about that? Is there a unique VIP experience to an Esports arena?
Geoff Aiken: Yeah. So I think we view live events, like a lot of traditional live events, as there are tiers to the experience. We are seeing a drive towards be the experience, but the main trick is to really make that nimble and flexible enough so it can be used on a day-to-day basis. So you’re able to, and this is probably more to the ROI, make that investment where not just for your live-event days, which may be, call it, four to five times a month, we want to see that up to maybe four to five times a week for those spaces so.
Thom Chuparkoff: It’s the reason why Esports facilities are going to malls. It’s the reason why Esports facilities are going to adaptive reuse projects, instead of projects like Fusion, where it’s still designed for that particular unit, right?
Scott Norcross: Mm-hmm (affirmative).
Thom Chuparkoff: I mean, this is a very immersive social aspect. So the VIP experiences, the VIP is the way that they want to embrace the game or the event their own particular way, right?
Scott Norcross: Mm-hmm (affirmative).
Thom Chuparkoff: And incorporating the programs of team training rooms into little VIP Loges. And those kinds of things, where you take the traditional, little VIP Loge box area, and then turn that into a team prep area beforehand or afterhand, or a meet-and-greet spot, right?
Scott Norcross: Mm-hmm (affirmative).
Thom Chuparkoff: I mean, to your point about the casters being as big as the event people, I mean, people really want to see the people that are YouTubers, and having those events spaces where they could watch an event with that person is a big draw.
Scott Norcross: To that end, when you’re looking at daily use of sort of either of these adaptive reuse projects, or larger projects, I think that also you’re looking at the build out of the lounge spaces and the daily use spaces. Where you’re also going to, at that point, from a business side, look at subscription models and reward models, and really kind of grow your base that ties into also your live-event models. So if you’re doing 30 to 35 live events a year, but on a daily basis you’re also driving an average use out of your members, you’re driving those members to your live events on the weekends. And also to be, look, you’re really trying to drive them to be ultimately participants, so-
Thom Chuparkoff: Yeah-
Scott Norcross: In that. So it’s sort of the farm teams, or let’s say the future pros of Esports.
Thom Chuparkoff: Yeah.
David Barista: Fascinating. And then, are there any other opportunities in the future for this particular building type that you want to talk about?
Thom Chuparkoff: Well, I mean, I think the opportunities are just, as architects and engineers and attorneys, is looking out for the actual need of the project, right? Looking at buildings holistically, and being mindful that it’s not necessarily a new build, right? There’s plenty of spaces that people are trying to, and many, many mid-size to large arenas. There’s always dormant space that maybe could be revitalized or re-looked at, or reprogrammed within the space. So I think it’s obviously a, in Singapore, it’s a $1 billion business coming up, and, I mean, I think we all know how lucrative it is. But I think that even event spaces, we’ve all learned in the last nine months that you have to reinvent yourself, right?
So the new opportunities, to me, are working with our existing clients and your future clients, and really kind of reevaluating and doing an assessment, to see how maybe they could be a part. Because, as you mentioned, soccer teams, football teams, baseball teams, I mean, it’s becoming the same as minor league baseball is to major league baseball, with a FIFA team tied to a brand, right? So how can you tie those together within your current establishment, I think, is the opportunity.
Scott Norcross: And to your point, I think, with what we’ve seen in the last nine months with COVID, is, I mean, you’ve seen a person that had no knowledge of Esports suddenly sort of tap into it for the first time. And if that is through the F1 racing or NASCAR, or something like that, that really grew during this period of time, I think that is one reason that we’re seeing such a growth.
As far as next steps, I think that looking at our clients, and saying what purpose can we offer to you or your existing structure, or a new structure to do, I think that is all also what we can offer from a well-balanced idea sense. Because I think that, in this, what we all would sort of say, is we’re constantly evolving too, because I think in Esports I think there’s going to be a move towards more VR, more immersion. And so I think you’re seeing these new facilities kind of blend both, and really be able to use sort of all facets of innovation, when it comes to electronics and Esports and gaming, that I think we’re looking at as well.
Thom Chuparkoff: And it’s got to be flexible.
Scott Norcross: Right.
Thom Chuparkoff: 100%.
David Barista: Well, Tom, Jeff and Scott, I want to thank you for your time. This was a fascinating discussion on a fascinating building type. So thanks, gentlemen, I appreciate it.
Thom Chuparkoff: Thank you, David.
Scott Norcross: Thank you, David.
Geoff Aiken: Thanks for making time.
KJK publications are intended for general information purposes only and should not be construed as legal advice on any specific facts or circumstances. All articles published by KJK state the personal views of the authors. This publication may not be quoted or referred without our prior written consent. To request reprint permission for any of our publications, please use the “Contact Us” form located on this website. The mailing of our publications is not intended to create, and receipt of them does not constitute, an attorney-client relationship. The views set forth therein are the personal views of the author and do not necessarily reflect those of KJK.