The geolocation gold rush: Does tying an esports team to a city make sense?

by Daniel Rosen Apr 18 2017

When Las Vegas investors tried to sell Rogue co-owner Frank Villareal on bringing his esports team to Sin City, they bought him liquor and steaks, then dropped $600 in his lap and told him to stick around for another night.

Villarreal and his business partner, Sean Mulryan, showed up to the Capital of Second Chances in early 2016 after several Las Vegas-based investors started asking them about getting into esports.

He'd just left his previous team, Enemy eSports, and was looking to start something new, possibly with a geolocated focus. They set up some meetings and hit the strip. One potential investor invited the pair to a steak dinner, with drinks and desserts coming all night. When the bill came, she paid for the table, then asked how long they'd be in town.

"We're only in town for three days," Villareal said.

"Only three days? Really, for your first time in Vegas, you should experience it for at least six."

That's when she dropped $600 on the table.

"Here, take this money on me, and stay for a couple more days for another meeting."

Villareal and Mulryan never left.

The Overwatch League

Ever since Blizzard announced its Overwatch League would feature city-based, geolocated teams, the concept has been gaining traction with esports orgs. The advantages are clear: a geolocated team would have a city to call home, and potentially have access to local arenas.

Just about every team in Overwatch is looking for a city to partner with, hoping that Blizzard decides to put one of their franchise spots in that city. Splyce partnered with Delaware North in Boston, NRG is sponsored by Events D.C. and more and more organizations have stated their interest in finding home cities for their teams.

The mad dash to find a city to partner with has paid off for a handful of teams, with others are holding off until they have more details on Blizzard's mysterious Overwatch League.

Some teams have secured lucrative sponsorship deals that connect them with major American cities. With the money flying around, comparisons to traditional sports get mixed in and all of a sudden we're left asking if geolocation actually changes anything, or if esports is just emulating a traditional sports model it doesn't really need.

Looking for a home

Not every esports team is on board just yet. eUnited's co-founders, Adam Stein and James Daquino say that they've received offers from cities and arenas looking to house their team, but they want to wait and see what Blizzard's model will look like before making any hard and fast commitments.

eUnited's Overwatch players are some of the strongest in Europe, but the organization plans on moving them to North America. Stein says he feels geolocation is the "natural evolution" for esports, but isn't ready to say that it's a go-to solution for every game.

"We still need to figure out whether or not this city model will resonate across all titles, and I think part of the reason is that not all titles and not all esports teams are created equal," Stein told theScore esports.

"League of Legends and Overwatch have a big advantage in a geocentric model, because there is a defined league with a schedule, teams, playoffs, championships and the need for arenas to house those matches. Whereas some of the other titles have a combination of events and tournaments, so it remains to be seen if that geocentric model could apply to those titles."

However, there's a chance that Overwatch won't be the game that potentially ushers esports into this brave new era. The game is new, but Blizzard is reportedly charging millions of dollars for even the lower priced slots in the league. Cities have to judge whether or not it's worth it to pay that much cash for an esports team they won't necessarily own, in a game that isn't guaranteed to stick around.

Events D.C. has been the most straightforward about what they get out of sponsoring an esports team: tourism. Max Brown, Events D.C.'s chairman of the board, says that an esports team could bring people to the city the same way a traditional sports team does. Brown believes that hosting esports events will bring people into town, the way a big football or basketball game does.

"We're about putting folks in hotel rooms, spending money in the city, eating in our restaurants, and ultimately, long term, all these people who come to Washington, many of them we want to actually stay here and live here," Brown told theScore esports.

"Raise a family here, send their kids to school here, for us, it's not only a short-term play on how to build up an arena that we're building and put on esports tournaments, but ultimately get people to come here, stay here and move here."

The advantages of geolocation

Playing all your games in an arena is a cool idea in theory, but one would think limiting your reach to just one market might not be the best business decision for an already global esports brand.

But it is possible that an esports team can remain a global brand when it's tied to one city in particular, according to Villareal and Rogue. It's why they've been tied to Las Vegas since day one, and Villareal even thinks that the globally-oriented esports brands are limited in their own way. He says Rogue has sponsorship opportunities that global teams just don't have access to, and they're not losing out any international fans.

"Rogue has a lot of Asian fans because the Overwatch team spent over three months there," Villareal said. "In Europe we have a large fan base because both our CS:GO and Overwatch teams originally came form Europe. Limiting ourselves to a non-global partnership with anything hurts us. It means that we cannot provide what we want to for our fans. However, going global limits the sponsors we can go after, and that drives down prices."

Not only that, but Villareal points out that European esports organizations have been focused on pursuing regional markets for some time. Thanks to their all-Polish CS:GO team, has a strong presence in the Polish market, Alliance and Ninjas in Pyjamas have cornered Swedish esports, while Tricked, Heroic and Astralis have split Denmark between the three of them. And let's not forget about Na`Vi in the CIS and Millenium in France.

Europe has been pursuing regional sponsorships long before North America's sudden interest in them, and they've proven it works in the long run, at least according to Villareal and Rogue.

"Whether they were doing it on purpose or not, the focus for a lot of European organizations trended towards regional teams and building national teams, especially in CS:GO, because it was easier for them to get sponsorship money and easier for them to build a fan base based on this thing that all of their players had in common," Villareal said. "So I think that the natural evolution of esports has always been towards more regional fan bases, whether we've known it or not."

Does it help fans?

But this is all on the sponsors and the orgs. Even if emulating traditional sports makes sense for them, what does it do for esports fans? The audience is what drives views, which drives ad sales, and one could argue that they should be getting something out of geolocation as well.

Theoretically, the more cities and arenas that get on board with esports across the world, the better things get for fans. Games would be played all over the world, and be more likely to hit cities where esports events don't usually show up.

But if the Overwatch League features home games, it's unlikely that Rogue fans in Korea will attend those matches half a world away.

Given that most esports team are still based in California, NRG isn't likely to pick up and move to D.C. The fans they might gain from those outreach programs that Events D.C. is running are also not likely to follow them to L.A.

Putting everything in one place isn't the future of esports, far from it. Tournaments happen all over the world and will likely to continue to, but leagues are locked to one location. In North America, that's been L.A. for the most part, but it doesn't necessarily have to be. And if geolocation is a part of esports' future, there's a chance that locking things down to one city is as well.

Stein points to the Call of Duty model in North America, which has a league system supplemented by open tournaments all over the United States. Tournaments attract local fans, who then become viewers once the event ends. Daquino however, thinks that going the way of putting every single esports event in one city is probably not the best move.

"Why would you want to alienate the rest of the world in favor of one city? I'm not sure," he said. "I guess you could, but I don't see why you want to do it from a marketing perspective."

Geolocate or bust?

Of course, traditional sports leagues aren't locked to one city, they play home and away games all over their respective countries or continents. Esports doesn't quite have the money, infrastructure, or even demand for that yet.

Simply put, our community is smaller, and we're used to watching things online. The fans won't complain if most of a league's games are played in one city, because they're watching on Twitch and YouTube regardless.

The traditional sports model isn't being copied exactly, which begs the question: does it even makes sense to ape a part of the model, when esports can't possibly have the whole thing?

Rogue, for their part, really are diving into geolocation headfirst. They have Vegas-based sponsorships, host events in the city, and their Overwatch players have all made the trek to Sin City, though they live in separate apartments, not a team house. However, Villareal knows that geolocation isn't the only thing in esports' future. No matter what happens, he says, esports will stay global.

"I hope that we're able to keep our global charm, while becoming more regionalized as teams," Villareal said. "Part of what makes esports so special is that it is global. Being able to go to Korea and have fans come up to our players and ask for autographs is extremely important to what makes esports esports.

"Whether you like it or not, esports is going to remain global. Being able to have that global fanbase as well as your local fanbase is going to be extremely important to ensuring your organization is still around in five years."

Daniel Rosen is a news editor for theScore esports. You can follow him on Twitter.