At 6-foot-1 and weighing scarcely 155 pounds, George Georgallidis does not immediately strike people as an athlete. But make no mistake — the 21-year-old is the Tim Tebow of his sport. Except that Georgallidis’ sport does not require him to run, jump or throw. Instead, he uses his slender, expressive hands to play a computer game called League of Legends.
Developed by Riot Games Inc. in Santa Monica, League of Legends has become the game of choice for millions of competitive online players including Georgallidis, who last year quit his job as a store clerk in his hometown of London, Canada, to make his living as a professional League of Legends player. Georgallidis’ surprising career path is the culmination of a grand plan for Brandon Beck, 29, and Marc Merrill, 31. The co-founders of Riot hatched their idea for the company in 2005, when the two USC graduates were roommates. Four years later, they launched the game.
Today, League of Legends has 32 million registered players, 4 million of whom play daily for an average of three hours a day. Although the game is free to play, Riot has been profitable for at least two years — making money by selling virtual items and characters with special powers, called Champions. In each match, two teams of five players each select from a list of about 100 Champions and attempt to destroy the other’s base in a virtual jungle arena. The genre, called multiplayer online battle arena, is one of the most popular for competitive play.
Riot operates in the online games market for virtual goods, which research group In-Stat expects to double in size to $14 billion in 2014, from $7.3 billion in 2010. Riot is privately held and does not publicly disclose its financial data. But the company — whose only game is League of Legends — was attractive enough for Tencent Holdings, one of China’s biggest Internet companies, to plunk down $400 million in February 2011 for a majority stake.
Part of what makes Riot so valuable is its devoted fan base. So passionate are the players that thousands gather in places such as Sweden, Germany, South Korea and the United States to compete and root for their favorite athlete in the burgeoning e-sports field. A League of Legends tournament that took place three weeks ago in Hanover, Germany, filled a convention hall to capacity with 5,000 attendees while 3,000 waited in line outside. More than 2.2 million online viewers watched a live stream of the five-day tournament.
Last week, League of Legends became the top online title in South Korea, where such games are big business and are widely played in Internet cafes. In Los Angeles’ Koreatown neighborhood, players gather in similar venues, called PC bangs. But the Internet cafe culture has not hit mainstream America, where the vast majority of games are played on home computers.
Competitive gaming has been around for more than 15 years. The first generation of players competed on shooter games such as Doom and Quake, according to Dennis Fong, chief executive of Raptr, an online social network for about 12 million gamers. Fong is well known on the pro-gaming circuit as Thresh, a professional player who won a custom Ferrari 328 in a 1997 Quake tournament and who used to earn more than $100,000 a year in winnings and sponsorships.
But the sport failed to gain mass recognition in the U.S., even though matches were broadcast in 2007 and 2008 via DirecTV’s Championship Gaming Series.
League of Legends, however, represents a new wave of competitive gaming, Fong said. The first big difference between the game and its predecessors is that it costs nothing to play, immediately drawing in players. Second, Riot made the game easy for anyone to pick up and play — but devilishly difficult to master.
“Previous games in this genre had big learning curves that tended to scare people off,” Fong said. “Riot made a few key tweaks that made it a lot easier for players to give it a try.”
There is one other crucial factor in the game’s success: the ability to live-stream matches. With widespread adoption of high-speed Internet access, websites such as TwitchTV and Own3D.tv began hosting games — not just one or two high-level matches, but millions of them.
By aggregating these 30- to 45-minute contests, San Francisco-based TwitchTV, for example, amassed an audience of 16 million viewers in February who spent a combined 2.1 billion minutes watching videos on the site. TwitchTV co-founder Emmett Shear estimates that about 50,000 players broadcast their games in any given month.
TwitchTV, which makes money from selling advertising and charging pay-per-view fees of about $20 for high-level tournaments, splits ad revenue with its top 1,200 broadcasters, including Georgallidis. The amount broadcasters receive is calculated based on their viewership.
On a Friday afternoon last month, Georgallidis, who plays 10 hours a day under the name HotShotGG, attracted an online crowd of 8,071 spectators for a practice match. The browser window shows Georgallidis staring intently at his computer screen, coordinating strategy with his four teammates via a headset.
Georgallidis’ team, Counter Logic Gaming, is so dedicated that the members moved into an apartment together two weeks ago in Seoul to take part in a three-month League of Legends tournament there with a prize pool of about $180,000.
“It’s very common for these teams to live together,” said Marcus Graham, who makes a living as an e-sports commentator and hosts four weekly shows on TwitchTV dedicated to competitive computer gaming. “They usually play on five computers right next to each other. At the end of the day, they get together and use a whiteboard to talk about strategy. These guys take it very seriously.”
Georgallidis said his mother, who was initially skeptical, eventually came around. “My parents are excited that I get to do something I really love,” he said.
As with other professional sports, a small industry has been built to support e-sports. Companies such as Major League Gaming, Electronic Sports League, World Cyber Games and IGN Pro League organize tournaments — both online and as live events. Sponsors such as Intel Corp., Dr Pepper and Dell Inc. back teams and events.
Beck and Merrill, hard-core gamers themselves, believed that the best way to promote their game was to actively foster it as a sport. As a result, Riot is giving away $5 million in prize money to winners of a series of competitions throughout the year.
Beck, a former management consultant for Bain & Co., and Merrill, who worked as an analyst for U.S. Bank, believe that the money is a good investment in their game’s appeal.
“Our vision was that someday we will all feel the same way about e-sports as we do about soccer, basketball or any other conventional sport,” Beck said.
– Alex Pham
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