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11 October 2009
Posted in
XFX Graphics
Growing Videogame Industry Seeks Star Power
by Ellen Sheng
of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Jonathan Wendel travels the world to compete in tournaments, hawking his own line of branded products to his legions of star-struck fans.
Not bad for a 25-year-old guy who plays videogames for a living.
Wendel, also known as "Fatal1ty," is shaping himself into the Michael Jordan of the gaming world. When he isn't busy gaming, he is out promoting his gaming equipment. Next up, he hopes, are gigs for the makers of shoes, shirts and sodas. He is already pulling in six figures on deals because gaming is an easy sell to marketers desperately try to reach the gaming world's 14- to 34-year-old demographic.
To be sure, the concept of playing games for a living is still pretty new - Wendel is a pioneer among a handful of others who actually make a living at it. But their numbers are growing. In South Korea, professional gamers enjoy star status, even insuring their fingers.
The videogame industry worldwide is an estimated $29 billion business, counting hardware and software, according to DFC Intelligence, a San Diego-based interactive entertainment firm. NPD Group, a research firm based in Port Washington, N.Y., estimates U.S. sales at $11.9 billion. That is huge when you compare it to the National Football League, which reported roughly $6 billion in
annual revenue last year. That reflects the sport's international scope and year-round playing season.
"Gaming is the No. 1 recreational activity for probably 80% of youth of the world," said Sundance DiGiovanni, co-founder of Major League Gaming, a New York-based professional videogame league. Looking at youth culture and understanding the competitive nature of people, the rise of videogaming as a sport "makes a ton of sense," he said.
"What has happened is, we have a sport that has given rise to competition, and that competition in itself is creating a celebrity," said Tony Crisp of CRISP Brand Agency, a marketing firm that has been working on a Fatal1ty branded product.
Videogaming is going through a rapid revolution because of communication through chat rooms, connected player groups and email.
"What took skateboarding 20 to 30 years to finally cultivate their Tony Hawk is taking videogaming only 10 years," Crisp said.
Corporate Support
Videogaming has a leg up on other sports when it comes to sponsorships. Unlike, say surfing or skateboarding, videogames have a built-in base of corporate support. The games are created by and played on products made by Sony Corp. (SNE), Microsoft Corp. (MSFT), Electronic Arts Inc. (ERTS), Intel Corp. (INTC), Nvidia Corp. (NVDA) and Dell Inc. (DELL), to name a few.
From a corporate perspective, gaming appeals to the "ultimate consumer" - the 14 to 34 demographic with money to burn, said Mark Walden, marketing director at Auravision, which makes a Fatal1ty-branded keyboard and also serves as Fatal1ty's master licenser.
"These are all young people, male and female, who are not watching TV, not going to movie theaters...they all play videogames," he said.
For now, companies are sponsoring events and teams. But recent deals show that companies are willing to put up money in order to position themselves in the growing marketplace. Dell, the world's largest computer maker, bought Alienware, a custom PC builder targeting serious gamers, earlier this year for an undisclosed amount, estimated to be under $300 million.
Even companies in industries only tangentially related to gaming are showing interest. Boost Mobile signed a multiyear sponsorship deal with Major League Gaming under which players will use Boost phones with Boost walkie talkies to chat with teammates during events. DirecTV Group Inc. (DTV), a satellite TV provider, said it will air the Championship Gaming Invitational, which has supporters such as Microsoft, Mountain Dew, Fox Interactive Media and Best Buy Co. (BBY).
The Magic Touch
In addition, like other sports, videogaming is creating a cult of personality. Major League Gaming now represents some 150 players. Among the league's ranks is 19-year-old Tom Taylor, also known as "TSquared," who was featured in Stuff Magazine's "Successful under 30s" list this year. He currently has a contract
with Major League Gaming worth at least $250,000 over three years. That's on top of his tournament winnings.
By far, Wendel is the most successful of the group. His business relationships are already making the majority of his income. Royalties from licensing agreements were double the $231,000 he pulled in from winning tournaments last year.
The evolution from gamer to entrepreneur seemed the next logical step for Wendel. He started by selling mousepads four years ago when he was already famous in underground gaming culture.
He bought several cases of extra-large neoprene mousepads measuring more than two feet square, which he dubbed the "Fat Pad." He ended up selling all of the Fat Pads within a day or two, and he made $50,000 in five months just from sales of mousepads.
From there, "I saw an opportunity to start a lifestyle brand," he said. Wendel started contacting more companies and incorporated Fatal1ty Inc. in his home state of Missouri. He did more than lend his name, he also influenced how the products were made.
For example, Creative Labs Inc., a Singapore-based equipment maker, worked closely with him to redesign a gaming mouse. Everything from the shape of the mouse to where the buttons are placed was considered "so aspiring professional gamers could try to emulate the gaming rig of the world's biggest gamer," said
Phil O'Shaughnessy, a spokesman for Creative Labs.
Wendel now has four partnerships with computer-equipment makers and about a dozen products in the works. Wendel isn't stopping at gaming products. He has a publishing deal in the works and his licenser, Walden, envisions a clothing line. Sound far-fetched? Walden, who has decades of experience marketing the
surfing brand Body Glove, oversaw that company's expansion from wetsuits into women's fashion and even electronic gear.
"I definitely see the Fatal1ty brand becoming more mainstream," Wendel said. But he isn't giving up his day job just yet. Wendel won the Cyberathlete Professional League's World Tour Finals championship last year, bagging $150,000 in prize money.
www.fatal1ty.com
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