How eSports are saving
the PC industry
PC gaming has been hounded by an ominous narrative for almost as long as it's existed: it's dying, soon to be replaced by smaller, more convenient, more consumer-oriented gaming devices, or even phones. Recently, this idea has completely gone out the window: $1000 video cards are flying off the shelves, exciting and demanding new technologies like 4k and VR are on the horizon, and gamers are upgrading in accordance.
One of the world's largest producers of graphics cards, nVidia was founded in 1993 and has been at the forefront of graphical processing ever since. Their primary business is PC hardware. They have also expanded into mobile processing and were responsible for the graphics card in the first Xbox. PC Gamer currently ranks nVidia's GTX 970 as the best graphics card available.
GeForce Titan is nVidia's #1 selling graphics card, despite being the most expensive ($750-$1,000). The card's customer is buying an average of 1.3 Titans per PC.
PC gaming hardware produced about $21.5 billion, or, roughly double that of the console hardware market. Quite contrary to the worn, 90s-era narrative of PC gaming’s imminent doom, ceding the gaming market to the console for all eternity, the exact opposite has been happening. And just a handful of games (among others) are driving this enormous resurgence: Defense of the Ancients 2 (1,262,612 daily players), Counter-Strike: Global Offensive (819,902 players), and of course, the massive League of Legends which boasts an astounding 27 million daily players. Most of these games are MOBA style games, which stands for Multiplayer Online Battle Arena. MOBAs are fast-paced, competitive, team-based action games that follow different (mostly free) business models and content delivery mechanisms. That free-to-play, pay for extras model keeps people hooked.
Recently, Hopes&Fears met up with James Grunke, Head of Global eSports at nVidia in the press area of ESL One 2015’s DotA 2 event. That competition packed thousands of gamers into Madison Square Garden to watch some of the best competitive players in the world. We were shocked to hear some of the numbers Grunke was throwing out, so we sat down to speak with him, as well as Bryan Del Rizzo, Senior PR Manager of GeForce and Clay Causin, Head of Global eSports, nVidia, about how eSports have revitalized the hardware industry.
Hopes & Fears: Obviously, eSports is driving the PC gaming hardware market a lot. Do you think people are buying the PCs because the competition looks fun, because they want to go pro themselves or because they just don't want to miss out on the culture?
JAMES Grunke: I think just in the past five years the community and culture around it have grown to be such a massive size that it self-promotes. I use myself as an example. As a musician, my undergrad is in classical piano. I used to drive to work on my way to the factory, wishing I could just stay home and practice music all day. Think of the kids on their way to Starbucks who want to stay home and play DotA 2 (Defense of the Ancients 2) all day.
ESL One, Madison Square Garden, NYC, October 4, 2015.
H&F: I remember you mentioning at ESL that you're an industry veteran. Do you remember when you would open "PC Gamer" and the cover article would be "PC gaming is dead?" Everywhere you looked, death would be around the corner. Is it nice to look back on all that from this moment?
JG: Like an "I told you so" feeling?
JG: We're certainly getting a lot more attention here at nVidia, which is quite often a challenge. When the companies start looking at it at a board of directors level, and you're seeing an explosion around your specific endemic segment, it's really exciting. People five years ago didn't believe that other people would sit and watch people play video games. They just didn't get it. Now the numbers, they're off the hook, and you ignore it at your own peril.
PC gaming industry and graphics card breakdown
The PC gaming industry will exceed $25 billion this year.
PC game sales are set to overtake console game sales.
PC sales are falling, high-end PC sales are exploding.
↓ A technician at work at the controls of the tricaster, ESL One, Madison Square Garden, NYC, October 4, 2015.
The rise of Steam and mobile
H&F: Do you see the PC gaming market being eclipsed by mobile or console any time soon?
JG: You're speaking about the gaming market in general or in eSports?
H&F: In both, really.
JG: I think mobile has it since the install base is massive and people have a lot of spare time sitting around where they have their phone right with them. Mobile has a fantastic growth opportunity. In terms of eSports, the top four titles (in popularity) are available on PC only. They're not on console, and they're not on mobile, and if you look at eSports titles, why is that? First of all, eSports players require the best performing gaming platforms available. PC is the most powerful gaming system on the planet. eSports titles have a two-foot experience. It's not 10-feet away on the couch with a controller. I think that's significant.
Then they require that their APM, or action per minute, on a keyboard, is critical. If you watch a DotA 2 player's hands or a Starcraft II player's hands, they're all over that keyboard, and they're fast. That's critical. Then eSports players prefer the mouse as a controlling navigation or aiming or firing device. Putting it all together, it's a superior platform and I don't see that being threatened at any time in the near future.
H&F: You mentioned the top-selling platforms. The majority of those apart from Counter Strike: Global Offensive are MOBAs (Multiplayer Online Battle Arena). Is there a reason that the MOBA genre, in your estimation, seems to be king? As a two-part for that question, as MOBAs have increased in popularity, the MMO (Massively Multiplayer Online Games) genre seems to have been killed. Do you think the day that MOBAs will no longer be king is coming?
JG: Everything is cyclical. I expect the leadership positions to be dynamic over time. If you look at viewership, if you go by the Twitch numbers, Counter-Strike is moving up over DotA 2. I think CS: GO has a really bright future in eSports in terms of viewership. I think it's easier for the mainstream media and the mainstream audience to understand the game. I can put CS: GO in front of my sister and she'll get what's going on, but I put her in front of DotA 2 and she glazes over.
H&F: Is there any reason why you think the PC gaming audience has really just leaped on to MOBAs?
JG: Certainly, they're sophisticated games and they're fun to watch and play. The free-to-play model gets millions and millions of players out there and they are truly excellent athletes. When you're playing at the level of an ESL or a Valve International player, it's amazing what they do.
H&F: How has Steam effected the PC game resurgence?
JG: The impact Steam has had on the PC gaming economics is massive. I think it simplifies things. Your games are in one place. You have your friends and your groups, and you have it available on any PC that you stop at, actually. There is no doubt that Steam has had a massive impact economically. Are there growth opportunities around it? I think Amazon would say yeah. I think Blizzard would say yeah. We're in for a period of vast expansion and the opportunities are ripe.
H&F: Is there a particular reason that you think the console gaming generation is having a hard time getting off the ground with eSports?
JG: We spoke earlier where I talked about the two-foot experience and the mouse and keyboard. With the console, you can put a Bluetooth keyboard on there and a mouse, but it's not the same as a PC in that the purchase cycles and the refresh cycles for the consoles, they have a nice bump when they release, but they're out there for four or five years. With the PC, three, four times a year there are new GPU products shipping... or more. Certainly, the refresh cycle on the PC is an order of magnitude faster.
World's top 5 games for eSports based on player earnings:
1. Defense of the Ancients 2 - PC only
2. League of Legends - PC only
3. Counter-Strike: Global Offensive - PC, PS3, Xbox 360
4. Smite - PC, Xbox One
5. Call of Duty: Advanced Warfare - PC, PS3, PS4, Xbox One, Xbox 360
H&F: Every year, new graphics cards come out, and new, exciting products come out for PC. Do you see a hardware limit for GPUs and microprocessors etc? If so, do you see that being reached any time soon?
JG: Not any time soon. Priorities for gamers are frame rate and low latency, and every year we come out with faster, smoother, more accurate hardware. The games will get more challenging graphically as eSports matures. Not any time soon anyway. If you look at the impact of G-Sync for example, any title benefits from G-Sync, it doesn't require any code in the software product itself. Adding to the precision and the performance of playback for that system is something pro gamers would continue to demand.
↓ Evil Geniuses' Syed Sumail "Suma1L" Hassan arranges his setup prior competitive game, ESL One, Madison Square Garden, NYC, October 4, 2015.
Next Gen and VR
H&F: You've got 4K, you've got a lot of exciting stuff on the horizon coming towards PC gaming.
Bryan Del Rizzo: Yeah, outside the eSports arena, with what we do, you've got gamers running three displays. It's what we call a surround configuration. At a recent game show, they had three 4K monitors running Project Cars. Obviously, that’s a hugely financed system, but gamers, they want all this stuff. They want to experience the holy grail of gaming consoles.
With next-gen stuff like VR, PC is the ultimate platform for higher refresh and higher frame rates. You need to sustain that refresh or frame rate for VR, any slower than that harms the experience.
H&F: Consoles just can't keep up with that.
BR: Right. Already we're seeing this huge influx of graphics horsepower required for VR. Especially on Oculus's side, minimum specs for a good VR experience with them, it has to be a GTX 970 or higher. Think about how many megabits you have to power.
H&F: Both screens, obviously.
BR: Then there are all sorts of different rendering techniques we have to do. You're rendering through a headset on a computer display or a TV. You have to flip the image because the image is warped for VR through the lens. A lot of times it is stuff that we're doing on our end to make sure that the VR experience is really good.
eSports vs. sports
players of multiplayer online games in the world (compared to 500 million fans that tune in for Formula 1 racing)
of secondary market activity in the multiplayer world (buying and selling of accounts and in-game services)
internet viewers of the League of Legends 2012
NBC viewers of 2013 NHL Stanley Cup per game after four games
H&F: VR is a technology that really needs people to change their habits and their way of playing that they've grown accustomed to all these years. Do you guys think that it'll ever be mainstream?
BR: I think the jury's out just because we don't have any consumer mass market data. There's obviously a lot of hype and a lot of expectation for Oculus Rift and others like that. The kicker's going to be what is the price of the hardware that comes out, how attainable is it for most consumers, and the key thing is the content.
H&F: A killer app.
BR: I think the content is going to be key, I think the platform is going to be key. I think it's 450 megabits per second at least.
H&F: That's where the GPU increases come into play.
BR: Exactly. That's for today's headsets, that's for today's lenses. You figure lenses are going to get better and better because the evolution of lenses are going to increase at the same rate that we're seeing monitors increase. The refresh is going to go up, the content is going to be more demanding, the GPU will have to be more powerful because it's got to keep up with that demand.
Now, your original question was ‘Are people going to change their gaming habits?’; yeah, I think they are. I think we've seen that today. We had a VR experience center filled, and people walk away from them going, "Holy crap. This is an awesome experience."
We're still in a holding pattern because the hardware isn't there yet.
JG: From an eSports perspective, I expect some ingenious developer will create a spectator mode that is the be all, end all of spectator modes. Once that mass market is in place and the consumer hardware is out there, it is going to be a fantastic spectating opportunity. At first it's got its challenges because they're going to also have to provide a 2D spectator mode for people that don't have the hardware, and then it's going to take some time for a mass market to build up around it.
eSports vs. television
hours per week
played by an average gamer
hours per week
television watched by the average American
hours per week
television watched by an average gamer
BR: Did you see the thing with the [Presidential] debate, where you could put on a headset, and then you could pick any point in the stands and look at any candidate when a question's being answered? It was a couple weeks ago. Think about that from an eSports perspective. Being at home sitting in the stands, watching the whole thing unfold. You could walk around the event and look at different gamers and stuff like that. I think the possibility is really huge there.
↓ Austin "The Capitalist" Walsh & William "Blitz" Lee watch the action at ESL One backstage from the commentator's booth, Madison Square Garden, October 4, 2015.
The future of the eSports business
H&F: Where do you see the future of eSports going? Do you think eSports will have the capacity to make it mainstream, or are the games too complicated? Even CS: GO might be too complicated for my grandma.
JG: Turner Broadcasting announced that they're going to come out with a CS: GO program. I think once you go mainstream media you bring in mainstream, non-endemic sponsors, and it becomes interesting... at a Wall Street level. That's when the business will truly mature into a multi-billion dollar business, and I fully expect it will do that.
There's a movement at ESPN around bringing in editors for that. I think you're going to find that the TV networks are not going to want to give up the cord cutters so easily.
BR: In Brazil this weekend at a game show, I met with a reporter from ESPN eSports, which is a new division they've set up down there. They've recognized early on that there's a huge audience for this stuff, so they're setting up a separate channel altogether with separate coverage.
JG: Do you remember the "Heroes of the Dorm" TV presentation on ESPN? The reactions of the mainstream sports fans and some of the ESPN personalities were rebelling against it. There's always that risk when something new comes in front of people, but I think that the studio head sees a business opportunity and there's just no denying it.
H&F: To that question, obviously the industry is growing, but a lot of people see the industry as very homogeneous, especially in eSports.
I know a lot of women who, if they do play League of Legends, they won't use a mic. I don't know all the eSports teams that there are, but I'm pretty sure there aren't any that are all-female. A lot of my female friends have a hard time getting engaged and getting involved just because the community can be toxic. Do you think that, as the games grow, it's just going to solve itself? Do you think that game companies, ESL, things like that, can do more to promote diversity or just address the problem?
JG: Yeah. There're a few things that add up to causing that phenomenon. First of all, you're talking about a main demographic over the past 35 years in video games that is predominately male, and male teenagers to early 20s; consider the source of those trolling statements, first of all.
I think that the other problem you're dealing with is the anonymity of the internet, where kids can log on and their real name isn't there and they'll say anything to anyone. I think not only does that not make women happy, but it also makes non-endemic sponsors unhappy. Once you start seeing Doritos and big name brands coming in, they're not going to want people mistreated, whether by gender or race, religion, whatever.
There are women pro players and they do have their leagues, and there are women players that are at a level with any male player. We're just looking forward to the day when they don't have to have gender-specific tournaments.
H&F: You would definitely call yourself an old school PC gamer, right?
JG: Me? Yeah. I first played video games on Christmas Eve in 1972. It was Pong. I was a coin-op Defender hero. Back then, 8-bit PC games weren't as exciting as coin-op, but look what's happened there.
H&F: Don't tell me you met your wife in an arcade or anything like that.
JG: I met her working at Atari.
H&F: I could smell it out. You're in a huge position of responsibility. I would say that you've definitely grown eSports. In part, you're responsible for what it's become today. Do you see yourself as having a responsibility to continue guiding it in a good direction?
JG: My key objective is to embrace, celebrate, and grow the eSports community. Of course, we build great technology. I'm not an engineer, so that's at a different pay grade than me, but I'm the public face to the community and it's extremely important.
We're not selling flavored water in a can, with a huge profit margin. Hardware margin structure is a totally different business. We're not going to have the dollars to compete against non-endemic sponsors, but I think as their entrance into the tech net grows, we'll get lifted with it.
H&F: Do you think that anything is missing in the eSports environment? Something that you'd like to see more of, especially with your vantage point through the years of PC gaming and how it's changed?
JG: That's a great question. I'm not sure. Hang on one second, let me ask Clay. Hey Clay, what's missing in eSports and what would you like to see?
Clay Causin: Right now, I'd say the only thing I see missing would be more professional league organizers.
JG: I agree with him there. A trade association that standardizes behaviors, both for the operators and players, would help the industry immensely. In my background, I spent 10 years as the exec board chairman for the MIDI Manufacturers Association. We organized several hundred companies, competing companies, like Roland and Yamaha and Microsoft and Apple, to agree on a technology standard that has grown into a multi-billion dollar industry, and I think that eSports would benefit from a similar trade association.
of all gamers
Cover: A member of Russia's Virtus.pro helps his teammate ready for the upcoming DotA match, ESL One, Madison Square Garden, NYC, October 4, 2015.