Why Norway's largest Asset Management Fund bought a Team of Professional Video Gamers

March 28th 2014

If you’re about my age (I’m 32), you might remember games such as Starcraft or Counter-Strike from high-school and college years. You might not know that already back then, in the early 2000’s, people our age and younger were starting to compete for hefty sums in international competitions sponsored by known brands. And that today competitive gaming, or esports, has become a segment commanding the attention of millions of gamers, and dollars.

Diglife invests in NiP

Fast forward about 10 years, at the speed of the Internet

League of Legends World Championship, November 2013

Now, visualize stadiums filled with people wearing colorful, branded jerseys. Picture hundreds of thousands of people in front of their computers, on mobile phones, at home, at their friends' houses, at school or at their workplace, in bars and caf├ęs, cheering for a dozen of other people competing miles away for fame, glory and cash. And it’s not Football they’re playing, it’s videogames.

McNip Ad

Not that I’d want to, but I never had the opportunity to eat a McBenfica, a McRealMadrid, or a McPSG. But apparently in Sweden I could get the McNiP at McDonald’s, a burger that is named after Ninjas in Pyjamas, NiP, the swedish world champion Counter-Strike team. And burgers seem to be a fraction of what esports, or competitive gaming, enthusiasts are out to devour.

Fan power

Gamers and fans watch and broadcast games for fun and profit on Twitch.tv, (who has recently surpassed Facebook as the world’s biggest bandwith user by the way), and buy hardware, gear and accessories branded by teams and sponsors, produce and consume news and content, book travel and accomodation to attend events and, of course, buy games. Heck, they fund the games, the events, the players and even the million dollar prize pools themselves by donating, buying pre-orders, subscriptions and virtual goods that either enhance, embelish or personalize their gaming experience.

That AK-47 is signed by professional Counter-Strike player Hiko, of american multigame pro team Complexity. I guess owning one of those virtual AK-47’s is just as fulfilling as owning a jersey or a ball signed by a player. Notice how the signature and stickers are built into the game. The weapon’s also marked with the name of its original owner.

The business of esports

The hottest esports games are products of three companies: Blizzard, the producers of the Starcraft series; Valve, the producers of Counter-Strike and Dota 2; and Riot Games, makers of League of Legends, the #1 game in tournament prize pools and viewership. According to a community tally, these games have produced over $40 million in prize money in tournaments across the globe.

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We are talking about 20-somethings, or younger, wanting to play video games for a living in a world that is ready to give them Visas for it. And of the (now) “adult”-led Organizations that are scrambling to get better prize pools at bigger tournaments, larger sponsorship deals and just more funds to get bigger by getting everyone excited about it. If you’re an online gambler, esports have been blinking on your radar for at least a couple of years now.

This is why Norway’s larget asset management investment firm recently bought NiP; but also why Hollywood studios are starting to partner with Major League Gaming and Twitch and why an esports tournament management startup raised $1.3 million in seed funding, all since 2014 hit our calendars and in the wake of the sales world record breaking GTA 5.

How big can it get?

A lot more could be said to introduce you properly to esports, but this post is meant to explain the hype. It’s common to see pro players and publications state that, in a foreseeable future, the most popular esports will be bigger, or as big, as traditional sports. Their ambition is to eventually become bigger than Football (both types!), just as the gaming industry ambitions to become the largest entertainer, ahead of music and cinema.

I’m leaving you with “Free To Play”, a feature-length documentary produced by Valve about three “Dota 2” gamers that, with their teams from different parts of the globe, fought for the World Championship title in a 1.5 million USD prize pool tournament called The International.