Gaming enthusiast and founder of Power League Gaming, John Lacey, was one of the first to bring the eSports phenomenon to the Middle East. Having signed a deal with Majid Al Futtaim, the regional player is now hitting the big time on the big screen.
Early August saw video-game players, enthusiasts and bystanders gathered at City Centre Mirdif, Dubai, to watch two finalists publicly slog it out in a EA Sports FIFA 17 live contest. They fought through lengthy battles to get there—the live tournaments leading up to this final clash ran from 15 July to 5 August.
In that time, throughout the Dubai Summer Surprises season, around 512 players per day rushed to Majid Al Futtaim’s malls to fight for a place in the qualifiers and a chance to take home the winning pot: a cash prize of $13,600 for the victor, and $4,000 for second place in the one-on-one games.
This is not a new phenomenon, studies show that video gaming is now worth billions globally and in the Middle East. SuperData reports that the global gaming industry reeled in revenues of $91 billion in 2016 alone. And Newzoo estimates that the global market could reach $128.5 billion by 2020, with China forecasted to generate one-quarter of all revenues in 2017.
In the Middle East, a joint study by Strategy& and Abu Dhabi free zone twofour54 reports that the gaming sector in MENA is growing at a rate that exceeds the global average. From $1.6 billion in 2014, the Middle East is on course to outpace the likes of market leaders China and South Korea and triple in size to $4.4 billion by 2020.
Competitive gaming—or eSports—is turning a hobby into a profitable profession. Facilitated by entertainment consoles such as PlayStation or Xbox, individuals or teams compete against one another with prize money up for grabs. Using a multiplayer component, individuals can compete as opposed to challenging artificial intelligence.
This concept has gathered traction in recent years and respected industry giants such as NVIDIA, Intel and Activision have helped fund and organize competitions for professional gamers, who can earn both income and prize money when facing each other in respective game titles.
Regional gaming association, Power League Gaming (PLG), has been using the latest technology and partnerships with the industry’s biggest names to give players in MENA a platform to compete since 2011, and today the company is reeling in millions. From 2014 to 2016, PLG brought in $25 million in revenue.
The team are presently reinvesting any profit directly into the business and veers away from taking dividends or profit shares from that period. “We intend to invest another $2.7 million into new ventures for the next three years for live, broadcast and digital platforms ourselves, setting a target of more than $13.6 million in revenue,” divulges PLG founder, John Lacey.
Arriving in the Middle East in 2004 seeking a change of scene and a little adventure, Lacey started his career in the region in marketing. Working at Fortune PromoSeven and Momentum WorldWide, he regularly shook hands with Microsoft Xbox and Sony PlayStation.
With a deep understanding of the gaming industry, Lacey devised marketing communication strategies to launch franchises Call of duty, FIFA and Mortal Kombat in the region.
An avid gamer outside the office, Lacey was also more than well-acquainted with video game publishers in the region, and having witnessed with interest the growth of competitive gaming in Asia, North America and Europe, he saw an opportunity.
He set up Power League Gaming (PLG) in 2011, and after two years quit the day job to commit to it fully, pitching a three-year strategy to publishers and brands.
“We spent two years developing projects with publishers and brands such as activations and community activities,” he recalls. “The challenge wasn’t to jump ahead of the regional industry; you have to be mindful of the current trends.”
In 2014, he personally invested 350,000 dirhams for recruitment. “There was no specific investment into PLG to get it started; no VC or lump sum” Lacey remembers. “It was a number of people giving up their respective careers and working extremely hard to make this happen, many sacrifices were made to get the company to where it is today—many mistakes and many things tried.”
Key players in the Middle East are now onboard. In April 2017, Majid Al Futtaim Cinemas signed a deal with PLG that will see gaming aficionados flock to multiple VOX Cinemas theaters across MENA to witness the region’s best eSports teams and players perform.
“It’s a long-term plan to solidify our relationship with VOX, who want to ensure their brand is synonymous with broader forms of entertainment. They already show other sorts of events like La Liga and WWE,” says Lacey. “VOX are more than just films and we’ll help broaden their scope”.
With the necessary documents signed, PLG have completed three trial runs ahead of their budding alliance. Through a live feed to their audience, the company broadcasts their tournaments as spectators across the region simultaneously tune in, as they would for televised soccer fixtures.
Lacey cherry-picked titles capable of pulling a significant turnout and brands willing to enter partnerships. He credits PLG’s success to its focus on a single game title. In April 2014, the company held the first-ever live eSports PLG Arena with the World Champions of DotA 2 (a popular free-to-play online game) in Dubai.
A few days later, during the same weekend, they reached an agreement with Coca-Cola, announcing the Fanta Masters. As FIFA’s official partner, the Coca-Cola agreement helped PLG kick-start their eSports venture in the region. “The FIFA franchise is massive in this region, unlike anywhere else.
It’s an enigma,” he explains. “We were fortunate for the Electronic Art’s recognition. It’s helped the region entirely and now we have wild cards offering Arab players spots in global championships once they play through our Fanta Masters”.
Success has seen the company extend their reach throughout the region, expanding from four countries to 16. “Much of our focus was on FIFA’s competitive scene in the Middle East.
What helped solidified our reputation was our relationship with gamers, viewers, brands, publishers and platforms. Now we offer about 12 titles to accelerate the gaming scene here,” he confirms. “Because of our reputation, publishers seeking to enter the region are looking to support us.”
An integral part of eSports’ popularity is down to online video and media streaming platforms where gamers can watch likeminded individuals through their internet browser. Introduced in 2011, Twitch TV leads. SuperData predicts gaming video content platforms like Twitch and YouTube, where content is often broadcasted, will reach a worldwide audience of 665 million in 2017, more than double the population of the U.S.
Through advertising and direct spending, gaming video content is on track to generate $4.6 billion in revenue this year, outpacing top soccer leagues in Spain and Germany, $3.2 billion and $3.5 billion respectively.
“We take cues from the best practices from around the world and have introduced broadcasting, which we are still learning and have being doing for a year,” Lacey explains. “We are getting millions of views already but we’re trying to refine our broadcast model and get the formula right for the time being.”
Despite positive signs of growth, the path to success is arduous. While the barriers of entry are minimal, developing businesses from the ground up can be a daunting proposition.
“The Middle East is relatively expensive to do business, especially bringing resources onboard for small to mid-sized companies,” Lacey relates. “Hiring people with the right level of expertise is tough. That’s why bigger groups like Meraas and Al Futtaim tend to dominate; they deploy resources at a faster pace.”
It’s been a year since Meraas inaugurated their gamer-dedicated space Hub Zero. Despite attracting audiences, gamers and hosting over 20 calendar events, the entertainment center is aware strength comes in numbers.
“It’s all about working together. Sometimes it’s difficult to approach smaller gaming hubs because these places see a big company like Meraas and become conservative—it’s not easy to gain trust”, maintains Jean-Marc Bled, General Manager of Leisure and Entertainment at City Walk.
Although beneficial, companies or investors looking to penetrate the gaming or eSports market needn’t be well-versed in gaming. “They have to know to work very well commercial with many entities,” Bled clarifies.
“This applies locally and internationally, big and small—it’s vital to cater to all mentalities and attitudes, from corporate and small businesses to global publishers, pro gamers, media owners and venues”.
As PLG lays on back-to-back tournaments, it’s clear that video-gaming is no longer a part-time pastime for the region, it’s a booming industry. And as MENA enthusiasts flock to take part, investors too are reaping the benefits.