Perspectives on Esports: How Esports is Changing the Game for a New Type of Real Estate
Esports is quickly becoming one of the buzzwords in the property sector with investors and developers both feeling that this may be the next ‘big thing.’ But what exactly is esports? What companies are behind it and what are their ambitions? And what might their property requirements be — from large scale venues to office space and a high street presence?
A panel of experts recently addressed these and other questions during a debate-style event at the HKS London office. The event was chaired by professional journalist and broadcaster Ben Bland and panellists included: David Yarnton, CEO, Edge Esports; and Piers Nickalls, Director, Savills. The article below provides some highlights from that discussion.
Whilst esports is one of the words of the moment, the reality is that it’s a term that’s rapidly falling out of use by several of the companies involved in the sector, from the content creators to the teams. One of the largest companies, Electronic Arts (EA) — the firm behind blockbusters such as FIFA and Apex Legends — now refers to “competitive gaming.” Perhaps even more instructively, EA doesn’t simply concentrate on the professional players, some of whom now train eight to 10 hours a day and earn more than $2 million per year, but focuses instead on the entire community down to the individuals at home playing against their friends.
Some believe that esports (or competitive gaming) is isolating, but this is a misconception. Gamers are comfortable competing with headsets on while talking to — and often simultaneously texting — their friends. It is the growing understanding of the social element that is making both the brands behind esports and organisations in the real estate world realise that developing a physical presence for this digital world is becoming increasingly desirable.
Several esports projects have been recently completed or are in the planning stages. Those tend to be larger-scale venues aimed at the top of the professional leagues with the ability to accommodate hundreds or thousands of spectators as well as multiple teams. These facilities are permanent and designed to host competitive esports events, including tournaments.
What is less widely discussed – but is potentially where more opportunities lie for the property sector – is the possibilities for smaller venues in town and city centres. These would provide a presence for teams and their sponsors as well as an opportunity to connect with fans and communicate with others who may not yet be part of the esports community.
Importantly, the definition of a ‘venue’ must be retooled, as the industry and growth is constantly evolving and so will the way people consume content. As teams become increasingly professionalised, new lifestyle brands will become part of the mainstream increasing demand for physical space for a range of uses including retail, food and beverage and technology, as well as for gaming, training and associated team activities.
It’s a New World
This new world, driven by digital lifestyle brands, is seeing the emergence of new entrepreneurs, developing the ecosystem of technology and revenue generation that sits around esports and gaming. This growth is fueling venture capital flows into the industry and shaping demand for new types of property. And whereas digital brands such as Google and Facebook have been focusing on workplace, these new occupiers will require this as well as retail, leisure and potentially types of space we don’t yet envisage.
Versatile, flexible space will be crucial to this growth; the requirements for FIFA and Overwatch can be as different as those for football and tennis – and the existing and potential fanbase just as varied. Traditional models of space use and design will need to change radically to accommodate varying technological requirements and the ability to rapidly transform layouts for multiple uses.
In the UK and Europe in particular, this could spell good news for urban centres. The relative youth of gamers and fans means that accessibility will be key. Locations near public transport and with other facilities and amenities in the vicinity will be popular rather than the disused warehouses that have been used or vaunted as ‘ideal’ for esports, gaming and associated activations.
And the impact of digital brands on the demand for physical space could go further. Universities around the world are starting to offer courses that include gaming and the students may well need slightly different requirements both in terms of academic space and the technology demands in accommodation. Larger-scale competition venues will need hotels and training facilities. And at the other end of the spectrum, influencers and streamers who might be commentating or observing gaming live to their followers, could want short-term small space to rent where the technology available is far superior to that they have at home, similar to how recording artists often rent studio space by the half day.
Despite all of these variables, what is clear is that the rise of esports and the brands that create, play, promote and sponsor them, has the potential to have a serious impact on the size, type and style of property that’s required over the next few years. At the same time, designers will have to change the way their services are offered and structured. This is not simply a new form of retail but requires rethinking how to bring the digital and physical worlds closer together.
‘Perspectives on Esports’ is the second in a series of events celebrating HKS’s 80th anniversary. Our first event in April, ‘Perspectives on Health’ focused on the future of financing healthcare infrastructure.
If you are interested in attending the next event, please email [email protected].