Last year in 2019, esports proved itself once again that it is a strong, very viable and growing industry. Grossing over 1 billion US dollar(s), it shows no sign of slowing down in spite of the pandemic. In fact, the gaming scene is experiencing a boom since many people are staying home. So what does that mean for the Malaysia esports scene?

BFM, a local radio station went on air with SEAGM’s COO and co-founder, Tommy Chieng alongside Kevin Wong, CEO of Wulf Esports, to share their thoughts.

How did esports gain popularity?

If we are to talk about the growth of esports, we first must look at the evolution of gaming, according to Tommy. He shares that over the last decade gaming has evolved.

From PC games to web games and then to console and finally mobile. The gaming scene a decade ago was mostly considered a hobby since it wasn’t very accessible. Tommy reminiscent about the days where we would still go to cyber cafe to play since getting a PC at home is a luxury.

In the current climate, smart phones are extremely accessible especially in developing countries such as Malaysia and Indonesia. Gaming begun to experience a big growth since online mobile game came along. However, the competitive scene really only begun once PUBG got a mobile port.

The impact of COVID-19

When the pandemic broke out across nations, many industries and business took a big hit. There are even companies that couldn’t hold on and went under. The gaming scene experience the complete opposite of that, however.

Big stakeholders in the industry like Tencent and NetEase actually grew. Gamers are mostly staying home and because of that, are more likely to spend. In the past 4 months, SEAGM grew by 30% ~ 40%.

When asked about the impact of COVID-19 to esports players, Kevin said it didn’t really affected them that much. He adds that pro players spend a majority of their time in front of screens training. This is something that they could do remotely as long as they have good connection. Tournaments were still being held online irregardless so it didn’t affect their income as well.

Esports vs. Traditional sports

Kevin adds that esports is not a homogeneous business. It’s very diverse with various type of games to compete in. So what defines a game as esports since not all games are sports? It is when a game has a competitive scene that pit players against each other then it becomes esports.

Unlike traditional sports where basketball is governed by NBA and football by FIFA, esports has no final govern. There’s no one “Olympic” to compete in. For example, Riot Games who owns League of Legends have their own league with the highest achievable glory being Worlds. Similarly, Valve owns Dota 2 that runs The International.

Tommy added that famous games right now in the competitive scene are League of Legends and Dota 2 especially in China for the former. As for mobile games, it is dominated by PUBG M, Mobile Legends: Bang Bang and Free Fire. Malaysia in itself, is very popular with PUBG M and MLBB but still has a huge following for League of Legends and Dota 2.

Publishers as gatekeeper

The interview, Roshan, asked if that is the case, does it make Valve and Riot the gatekeeper of tournaments. Traditional esports operate via a franchise model but this varies for esports games.

Kevin says, you can’t really own the concept of sport but the publisher of a game has full rights to the game since its their own original IP. There is no wrong with publishers controlling the game and because they want to see their community grow, they generally don’t act as gatekeeper.

Tommy agrees with this sentiment by adding that the publishers has invested their time and money to create an IP hence they should own it fully.

Does the industry need a governing body?

Moving on, Roshan questioned whether the esports industry, a growing and fragmented one, needs a governing body.

Tommy thinks that the role of the government here is to help promote and boosting esports while making sure we have sufficient infrastructure. This will help Malaysia attract more big game publisher to hold their tournament in our country. Plus, this is a chance to create opportunities for local stakeholder as well to help run the event.

A governing body shouldn’t control too much of the industry since unlike traditional sports, esports are based on games. Those are IP owned privately by their own publishers. The co-founder of SEAGM went on to add that the governing body can also help with protecting the esports player, making sure tournaments are conducted fairly. For example, few years back there was an incident where prize money wasn’t given to winners of a tournament. A governing body could help prevent and resolve such incident.

The governing body needs to protect the players.

Tommy Chieng @ BFM The Breakfast Grille – HOW DO WE RAISE THE GAME FOR MALAYSIAN ESPORTS?

As for Kevin, he sees a regulatory body as a the bridge between regular people and the publisher, a middle ground. For example, it’s hard for a regular viewer or player to dispute issues regarding rules. However, a regulatory body could be an outlet where they collect opinions to connect with a publishers for possible changes.

The partnership with Dynasty Esports

When they were asked about the collaboration between ESM and Dynasty Esports, both found it curious. Dynasty was an organization that came out of nowhere and is suddenly funded by the government body in a big amount.

Tommy thinks that it’s counterproductive since they’re trying to act as gatekeeper for the local scene. This will stall any type of potential growth. DE is behaving as third party getting into the scene to make a profit. Kevin agrees with this notion.

Making a fortune with esports

Next, Kevin shared more regarding his experience of making a profit with owning teams. An esports company’s main revenue driver is a proper sponsorship deal. Other things like exclusive broadcasting and content deal still falls under sponsorship but contributes largely to the figures. The other percentage revolves around merchandising and event. Though the big bulk still mainly derives from sponsorship.

Tommy agree with this and adds that SEAGM has been actively sponsoring esports team since they’re also part of the gaming industry. The company currently contract with SEAGM.WULF and Yoodo Gank. Previously, they also sponsored AirAsia.Saiyan, an MLBB team.

He added that Malaysia is rather small and region wise (SEA), countires like Indonesia, Philipines and Thailands are still playing catch up. There’s also a problem with companies in Malaysia finding full confidence to invest in esports. He urges Malaysian companies to educate themselves. Esports is a very viable marketing channel for their brands.

In Malaysia, for example, during big events such PMPL, is a great chance for outreach. Whenever a Malaysian team plays, we have of one of the highest viewership in the region.

Malaysia’s future as an esports hub

Moving forward, to continue growing, Malaysia must become an esports hub. How do we define a country as an esports hub?

According to Tommy, you need a local successful organization and a vibrant esports community. On top of that, a capable organizer to handle such big events is also necessary. Big companies such as ESL has set up shop in Malaysia for a few years now. We hope in the future we can see Malaysia stakeholders rise up to the occasion as well.

Finally, for the community and sector to grow. We need actual stakeholders who understands esports to be the one making guidelines and being involved. Currently we have a lot of non-esports nor gaming stakeholders holding these important positions.

Kevin agrees and adds that being an esports hub means Malaysia hosting the biggest and most prestigious tournament. For example, a Southeast Asian regional tournament can be hosted in Malaysia. We’re not the biggest country but we definitely have good infrastructure that are capable of doing this. It’s the equivalent of hosting Olympic in your country if we can do it.

If you want to check out the full radio interview, go here. To read further on Tommy’s thought regarding the impact of COVID-19 on the gaming industry, go here.