Gino Gigante’s father, Louis, was a community organizer who built a lot of affordable housing in the Bronx. His uncle Vincent, better known as Vinny the Chin, was one of the nation’s most powerful—and dangerous—Mafia bosses.

Gino has pulled off the delicate feat of pursuing a career that would make both men proud.

His father approves because about two years ago Gino opened the Lower East Side’s Waypoint Café, which has become the hub of New York’s community of video-gamers. His uncle would recognize the café’s murder and mayhem, although it happens only on computers rented by customers for $5 per hour. Indeed, parents leave their kids to play Fortnite while they run errands, trusting Gigante to keep an eye on them.

“I won’t let anyone buy a Red Bull here until they’re 16,” said the 28-year-old Gigante, who majored in digital anthropology at the City University of New York and comes to work dressed in a black baseball cap and a PlayStation T-shirt.

His café pulls in about $50,000 in monthly revenue, and he plans to open a second one in upstate Troy, a hot spot for gaming studios such as EA and Warner Brothers. But the Waypoint is more than a spot for people to play video games. It is the city’s prime gathering place for people to watch other people play video games professionally: e-sports.

Almost every week, a group calling itself the 5 Deadly Venoms comes to see the New York Excelsior play Overwatch, a six-on-six-player game filled with blasts and booms that also features “supporters,” who defend teammates from enemy fire, and “healers,” who help them recover from injuries. It might look like chaos to the untrained eye, but there is strategy, and dramatic comebacks are possible—which makes Overwatch one of the most popular games. About 40 million people play it worldwide.

The Excelsior, or NYXL, are part of a league launched last year by Overwatch publisher Activision Blizzard. The team is owned by the Sterling.VC venture-capital fund, run by the family that owns the Mets. The idea is to transform e-sports from a traveling circus that occasionally comes to town into something resembling a major sport, with leagues and teams that have regular home games, road trips, season-ticket holders, corporate sponsors and lucrative media rights.

For now, the nine-player Excelsior squad is New York in name only. It actually plays in a Burbank, Calif., studio. But next year the plan is to play in the city, perhaps at Hammerstein Ballroom, Terminal 5 or the Theater at Madison Square Garden.

“I’m confident we’ll land at one of those,” said Ben Nichol, NYXL’s head of events and business development, who lives in an apartment above the Waypoint.

E-sports arose about a decade ago, when a promoter in Korea began offering top StarCraft players contracts and coaching. Since then the movement has been on a relentless crusade of global conquest. The Overwatch League has 20 teams spanning from Chengou, China, to London to Los Angeles. Top players earn millions of dollars. The biggest e-sports star, Tyler “Ninja” Blevins, has 18 million followers on Instagram and Twitter. That is three times more than New England Patriots quarterback Tom Brady has.

Pro gaming is a small part of the video-game business, on which U.S. consumers spent $43 billion last year, four times more than on movies. Still, the fledgling world of e-sports is expected to generate $1.1 billion in revenue this year, according to research firm Newzoo, a 27% increase over 2018. Goldman Sachs predicts revenue will nearly triple by 2022 as viewership approaches 300 million—on par with the NFL.

That has caught the attention of the owners of the Mets, the Patriots and the Los Angeles Rams, who have invested a reported $20 million each in Overwatch franchises.

“We see e-sports as a huge opportunity,” said Sterling.VC co-founder Scott Wilpon, a cousin of the Mets’ chief operating officer, Jeff Wilpon. “It’s by far the fastest- growing space in sports, and it’s on a global scale.”

Sterling.VC doubled down last month, paying an undisclosed sum to acquire a team in a newly created Call of Duty league.

For the Wilpons, e-sports represent an opportunity to win the hearts, minds and wallets of young people who are not the least bit interested in the Mets.

“I don’t like watching sports at all,” said Tiffany Chang, a foreign- currency analyst who heads the 5 Deadly Venoms and in addition to Overwatch likes playing StarCraft II, Cadence of Hyrule, Super Mario Odyssey and Smash Ultimate. “I game in a wide range.”

One recent evening in Midtown, the Paley Center for Media was transformed into an arcade for the Overwatch League all-stars viewing party. Many of the 200 20-somethings who paid $15 to attend got into the mood by doing the e-sports version of tailgating: playing video games on the first floor. Downstairs in the auditorium, fans who’d dressed as their favorite game heroes trickled in to watch the undercard, a couple of guys playing Super Smash Bros. The loser, a fellow named Gabe, had his beard shaved onstage while his mother waved from the audience. “There she is!” announced Nichol, the master of ceremonies, channeling the spirit of wrestling impresario Vince McMahon.

Then it was time for a little trash-talking from the Overwatch all-stars, most of whom are Korean teenagers.

“I truly believe the Pacific team is far better than the Atlantic team,” one player was translated as saying, “so I didn’t prep anything.”

“You shut your mouth!” someone in the crowd shouted.

Next came the main event, on the big screen. Most sports have broadcasters describing the play-by-play; e-sports has “shoutcasters,” whose job is to call the action and rev up the crowd, which hooted and hollered with great brio.

“It was a good small event,” said Nichol, who is putting on watch parties and other events several times a month to help build a fan base for NYXL.

Many others are chasing the same audience. They include Microsoft, which promotes its Xbox game console and software by regularly holding e-sports events at its retail outlet on Fifth Avenue, where four of the seven floors are devoted to gaming. On Tuesday nights players of fight-themed games are invited. There are also Fortnite Fridays. Saturdays are for another blockbuster game: League of Legends. Lucky players and fans get access to a state-of-the-art studio filled with computers, consoles, cameras, teleprompters and even a green room.

Andres Cardona, a Microsoft gaming-community development specialist, said most top gamers play professionally for about six years before their fingers lose the requisite twitchiness. He estimated it takes 1,000 hours to get proficient at a game, though most gamers practice several times as much.

“Some games are so intense,” Cardona said, “that you play another game afterward to ease your mind.”

There’s no doubt that the audience for e-sports is big. The question is How much money can be made, given that many of its fans have little disposable income?

“The truth is, most are poor college students,” said Gigante, who likens the industry to a rubber band stretched thin by investors pouring in so much money.

Some owners reportedly have paid upward of $30 million for their e-sports franchise—in the same ballpark as the price of a top minor- league baseball team. But like the music industry, video games are a hit-driven business where popular titles disappear quickly. Nearly three years after its release, there are signs that interest in Overwatch is dimming. Last month Activision reported a drop in the game’s monthly average users due to “increased choice in the team-based category,” although officials insist the league is thriving.

“If you look at the top five e-sports now, will it be the same in five years? It’s fairly obvious it won’t be,” said Brandon Ross, a media analyst at brokerage firm BTIG. “A couple of years ago, the big thing was PUBG, then it was Fortnite, and this year it’s Apex Legends. There are no signs of real stability yet.”

Nor does the arrival of e-sports teams with deep-pocketed owners, plus sponsors such as Intel and Coca-Cola, sit well with some gaming fans.

“My fear is the community will go to the parties the e-sports teams are putting on, but they’ll find it too corporate, too paid off, and we’ll lose the grass roots,” Gigante said.

Richard Ng, who founded the 5 Deadly Venoms early last year, agrees that rooting for an e-sports team controlled by a big software company can be a challenge.

“The sport isn’t public domain—which means you have to buy it and consume it and love it in only the way the company says you can,” Ng said. “That is antithetical to human behavior.”

Still, he said, the arrival of organized e-sports brings undeniable benefits. It offers gamers a chance to rise from their lair, put on some clothes and hang out.

“Technology promises connection but makes us live separately,” he said. “I believe one of the challenges facing young people is they’re disconnected from peers and from one’s self.”

This past weekend some 5 Deadly Venoms members met in Brighton Beach, Brooklyn, to catch some sun. They also have gotten together at the movies, attended conventions and held potluck dinners.

“My friend brought 30 items from Taco Bell,” Chang said.

Last year the group found a photographer who took head shots of gamers for a $10 donation. The proceeds went to University Settlement, a nonprofit. That has Gigante thinking about how he might entice other groups to the Waypoint Café.

“Last year we focused the fundraiser on the e-sports community,” he said. “This year we might target the nerd community.”

Source: https://www.crainsnewyork.com/features/next-big-thing-why-ny-investors-are-pouring-money-e-sports