- Title: Don't play video games, watch them -European telcos in search of next El dorado
- Date: 2nd June 2017
- Summary: VARIOUS OF NAVARRO PLAYING CALL OF DUTY
- Embargoed: 16th June 2017 13:04
- Keywords: Movistar Riders League of Legends Call of Duty video games Esports Movistar Telefonica telecoms
- Location: MADRID, SPAIN
- City: MADRID, SPAIN
- Country: Spain
- Topics: Arts / Culture / Entertainment,Living / Lifestyle,Society/Social Issues,Sport
- Reuters ID: LVA0086JL2NGN
- Aspect Ratio: 16:9
- Story Text: Andre Costa, 18, has landed the dream job of many young male Europeans: being paid to play video games.
The 18-year-old Portuguese League of Legends (Lol) player, better known under his internet nickname "Lastwolf", has landed a contract with Movistar Riders, owned by Spain's Telefonica, which launched in January a 24 hours channel broadcasting the best Esport competitions on its premium TV platform Movistar+.
Costa began playing computer games when he was three with his grandfather, a computer technician. He discovered League of Legends when he was off sick from school at around the age of 14 and since then he has been perfecting his skills in the multi-player online battle arena video game and trains about ten hours a day.
Esports, or video games competitions, are played in a sports arena online and watched by crowds of fans similar to traditional sport events like the NBA finals or the soccer world cup.
For Telefonica or European rivals Vodafone and Orange who are also investing in building up the nascent industry by creating teams, TV channels or leagues, Esports are a way to lure younger clients and brand themselves as digital companies rather than providers of phone services.
"We think it's a new category of entertainment mixed with sport that allows us to reach a specific audience. The target of this sector is a target we believe has great value because it is a young target which in addition we believe is the future," said Ignacio Fernandez Vega, Telefonica's director of television strategy for Movistar+.
With global revenues of $500 million in 2016, Esports remain a tiny market compared to the combined $450 billion of the film, series and sports industries in which those firms already compete for the best diffusion rights.
But its under-monetised fan base is seen growing by more than 50 percent by 2019 to reach 500 million people and revenues worth $1 billion, although industry experts see a potential for a $10-20 billion market eventually.
Spain, which has more optic fiber connections than Britain, Germany and France altogether and easy access to millions of players in America Latina, is a case in point in Europe.
"A virtuous circle has been created where every time there are more people who want to watch video game competitions," Fernando Piquer, CEO of Movistar Riders, said. "That attracts more and more players, which generates more talent and creates more professional players because, at the same time, more clubs are investing and encouraging this virtuous circle which, with the emergence of sponsors and branding, generates an industrial model that is growing."
Spain's Liga de Videojuegos Profesionales (LVP), with 60,000 daily viewers, stands as the world's third-biggest after the U.S. and South Korea. It was bought last year by Orange and Spanish sports rights firm Mediapro for an undisclosed amount.
Telefonica, Orange and Vodafone have not disclosed how much they have spent so far in Esports but Ignacio Martinez, who oversees Vodafone's Esports strategy in Spain says it is the first time since he started working in the industry 15 years ago that he sees telecoms companies rushing into a new market this way.
The return on an investment seen in the ball park of the tens millions euros is potentially huge - and quick.
According to data compiled by JP Morgan, an Esports viewer generate $3.3 in revenue compared to $44.1 on average for U.S. professional sports leagues such as NFL or NBA.
And at current growth rate, Esports could reach in just 10 years monetization levels that took 50 years to achieve in traditional sports.
Paris Saint Germain, Ajax Amsterdam, Valencia CF, Schalke 04 and AS Roma are some of the soccer clubs who now have Esports team. Next year, the U.S. basketball league NBA will also sponsor a digital league with 17 of its 30 teams.
At Movistar Riders, where squads play Call of Duty, FIFA, Overwatch and League of Legends, players receive support from fitness coaches, psychologists, physiotherapists, project managers and technical directors, like any professional soccer or basketball team.
On May 31st Movistar Riders launched a 1000 square metre high performance Esports training centre in Madrid where its seven professional teams can train for the main competitions in the sector.
Like Costa, Alejandro Navarro, who has signed for the Movistar Riders Call of Duty squad, said he is thrilled to be able to make a living playing video games.
He currently earns a minimum wage, a little over $900, and while it's a still modest salary compared to traditional sports or even the top global stars of the Esports who last year made close to $2 million, it is in line with the average wage for a Spaniard of his age.
"My plans are to remain in Movistar Riders as long as I can, to take as much advantage as possible of this opportunity and be a professional Call of Duty player throughout the rest of my life, so to speak," 19-year-old Navarro, whose game tag is "Puni," said.
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