More than just child's play, esports has the potential to become a lucrative in Southeast Asia. For that to happen, though, the ecosystem and business models first must be developed.
For now, the esports industry in markets such as Singapore remained in the infancy stage, said Zheng Le, CEO of Impunity Esports. Founded in 2019, the Singapore startup is an esports entertainment company that currently manages more than 100 esports players and talent. It also has presence in Cambodia, Myanmar, and Vietnam, and hires some 20 employees across the four Southeast Asian markets.
Most of Impunity's revenue are from sponsorships, advertising, and promotional activities, Zheng said in an interview with ZDNet. The company gets a cut when brands engage its talent, who encompass influencers in the games community. For instance, a Singapore-based gamer it recently signed up has more than 1 million followers from her cosplays and live streams.
The startup also gains revenue from prize money its esports athletes win from participating in tournaments and leagues, as well as from its intellectual property, when its logo is used in merchandise such as mobile phone covers. Zheng expects to clock about SG$500,000 ($372,552) in revenue this year.
Facebook is the social media platform of choice in pushing out the content it produces across the four Southeast Asian markets, but Zheng said Impunity recently began collaborating with TikTok in Singapore, working with the video platform to nurture its influencers and produce content.
Noting that esports shared common grounds with the sporting and entertainment industries, he said professionals who had done well in sports such as tennis, football, and basketball today also were seen as celebrities with high brand value. The same could be true for esports athletes, which was a goal Impunity hoped to attain for its own talent, he added.
This value, however, had some ways to go for esports talent to be on par with its offline equivalent. For one, the industry as a whole still was in its infancy, with key areas still undeveloped--spanning its talent, ecosystem, and public understanding of what it entailed.
Of topmost urgency was talent development, Zheng said, pointing to the need to establish an education system that focused on esports. Countries such as China, South Korea, and the US already had education programmes including degrees in esports, he noted, and urged for similar schemes to be rolled out in Southeast Asia so professionals in the industry could be equipped with the necessary knowledge and competence.
Curriculum could run along the same modules as sports education, he explained, where students were taught marketing and technical aspects of the industry, such as events management, coaching, and performance analysis.
Such know-how would help drive more mature business models for esports in this region, which currently did not have clear and sustainable revenue models, Zheng said.
He noted that Singapore, in particular, had key advantages over its counterparts in the region, with its robust digital infrastructures and footprint that included data centres and 5G networks. The island-city also had a good education system that it could export and help fuel other markets in the region, such as the technical aspects associated with esports.
In addition, esports companies from China and the US looking to develop their Southeast Asia presence would likely look to tap Singapore as a launchpad and headquarters, he said.
Where other tech sectors have a play
Driving growth in esports also could fuel further growth opportunities in other technology sectors, such as data analytics, artificial intelligence (AI), user engagement, and digital broadcasting, Zheng said.
For instance, AI would needed to supplement coaching techniques for esports and provide data insights to improve player performance. Data analytics also could help drive fan engagement and, in turn, generate revenue for the stakeholders.
He said Impunity was keen to explore how emerging technologies such as blockchain, cryptocurrencies, and NFTs (non-fungible tokens) could be applied to esports. NFTs, for instance, could be tapped to create digital assets and collectibles that could be traded, similar to how sports cards were collected and sold.
Asked if the Chinese government's recent moves to restrict online games consumption amongst the young, Zheng said such rules aimed to combat addiction and applied mostly to kids.
He noted that China already recognised esports as a profession, even detailing roles and salary ranges for professionals in the industry, and was unlikely to clamp down on the industry. The government's focus instead was on managing online games as a social problem, not in relation to its adoption as a professional sports.
He called on the Singapore government to provide more support for local esports companies to expand across the region. Such support was further needed to groom young talent in the country, who currently had to juggle their esports activities with school or their job.
Singapore in August 2020 set up a trade body dedicated to developing and facilitating the local games and esports sector. Called Singapore Games Association (SGGA), its efforts included supporting local games developers and championing the creation of local-made games.