Enterprise
eSports for the win
Behonce Beh 
Hazman (left) and chief marketing officer Chua Ken Jin aim to open another six Dojos this year
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Teenagers who spend their time playing video games are normally frowned upon and the activity is seen as another form of time wasting indoors.

However, this may no longer be the case as electronic sports (eSports) is gaining traction and fast evolving into a mainstream spectator sport. Generally, eSports take the form of organised, multiplayer video game competitions, particularly between professional players.

The most common video game genres associated with eSports are real-time strategy, fighting, first-person shooter and multiplayer online battle arena (MOBA).

The popularity of eSports means it is now seen as a valid form of sporting activity that requires just as much training and preparation like any other sports.

“eSports is essentially competitive video gaming. Years ago, a group of people would typically gather at homes or internet cafes to play video games.

“As internet speed becomes faster and technology becomes more advanced, the eSports gaming community keeps growing and more non-gamers are tuning in to watch the games at leisure,” says Kitamen Resources Sdn Bhd co-founder and CEO Hazman Hassan.

Kitamen, which was incorporated in 2016, is an eSports lifestyle brand centred on a community hub that provides a platform for all eSports titles under one roof.

In just 12 months of operation, the company managed to set up 17 licensed eSports Dojos or immersive learning spaces nationwide, attracted a community of 90,000 members; and created more than 100 job opportunities domestically.

Netherlands-based gaming and eSports market intelligence provider Newzoo notes the global eSports economy has grown by 34% year-on-year to US$660 mil (RM2.3 bil) in 2017 and will reach US$1.5 bil by 2020.

It is only expected to get bigger, and the Malaysian eSports market is no exception, adds the report.

Its chief marketing officer Chua Ken Jin says popular eSports titles are free-to-play MOBA such as first-person shooter games Dota and Call of Duty, and Need for Speed, a car racing game.

Kitamen’s revenue streams include space rental, event management, franchising, marketing, membership subscription, event consultancy, sponsorship and advertisement.

The bulk of 2017’s revenue came from their licensing programme. Hazman says plans are underway to open another six Dojos this year.

Kitamen’s Dojo differs from your run of the mill internet cafes. Aside from providing a space for gaming enthusiasts to train, it also features workspaces for eSports commentators or shoutcasters to livestream their commentary for a tournament.

“Our first few licence holders were gamers themselves who were starting their own business as opposed to being a full-time eSports athlete,” says Hazman.

Chua adds that video gaming is going to evolve into a mainstream spectator sport, just like football or basketball.

Kitamen works with global brands as a pathway to the elusive gamer community, and acts as a vehicle for brands to connect with a niche user segment. Beyond the eSports athletes, there is a whole community of commentators, fans and service providers to boost the visibility of the industry.

The market in Malaysia for eSports is huge; we are ranked number 21 in global game revenue estimates for 2017 with US$587 mil, above Netherlands and Poland. It is estimated that there are about 2.4 mil eSports enthusiasts in Malaysia.

“To further develop the market, community building is key. It is crucial that we build dedicated spaces for gamers of all levels to gather; a place where they have access to complete eSports titles and state-of-the-art gears.

“Our ultimate objective is to educate, groom and unlock the grassroots talents who are the core of the eSports industry,” Hazman explains. 

Kitamen’s Dojo is a place for gaming enthusiast to train and explore new hardware

Challenges ahead

One of the biggest hurdles for Kitamen is changing market perception.

Hazman explains the difference between casual gaming and eSports boils down to training and endurance.

“You can play games for hours but eSports requires endurance as it does take a toll on your mind. Just like any other sport, you need to not just train for the tournament but also [work on] your physical abilities to ensure that your body is able to withstand the competition,” he explains.

Its efforts in promoting eSports received a big nod from the government as it is aiming to make Malaysia a regional hub for eGames.

Earlier in March 2018, Kitamen signed two memoranda of understanding with the Malaysia Digital Economy Corporation (MDEC) in efforts to uphold the gaming industry on multiple levels with an emphasis on ‘healthy gaming’.

The MoU is a stepping stone for both parties as they are working towards the Perdana Electronic Expo (PEX) in November. PEX is touted be the nation’s largest digital lifestyle exhibition featuring new tech and media, gaming and popular faces of the digital age.

Kitamen is also working with Media Prima Bhd where it was appointed entertainment/eSports vendor for Media Prima’s GoGegaria Festival 2018.

Chua adds that another big revenue stream for eSport tournaments is sponsorship and co-branding activities.

“As the viewership and interest in eSport increases, brands now realise that they have a captive audience for their products.

“Sponsors and advertisers used to be mainly gaming-related brands such as computer and gadget brands but have now extended to lifestyle brands such as grooming products,” he explains.

Hazman adds the interest in eSports has resulted in more tournaments being held over the years and also a larger prize pool.

“These days, one weekend could have over 20 tournaments as compared to three years ago when it was much quieter,” he adds.

Moving forward, Chua foresees mobile eSports as the way forward as the cost of ownership of mobile devices and gaming titles become more affordable to the masses.

“We have to explore on ways to be relevant instead of focusing on the hardware of mobile devices. We can then choose to be an organiser or venue host for mobile leagues and tournaments

“Nothing beats the physical experience of eSports and being part of the community,” he concludes.

Crowdfunding for the future

Kitamen Resources Sdn Bhd co-founder and CEO Hazman Hassan says it is currently undergoing an equity crowdfunding (ECF) campaign on licensed ECF platform Ata Plus to raise RM2 mil for expansion purposes.

Up to 40% of the funds raised will be used to build the dedicated spaces, 20% for marketing, 20% for operations, 10% for the integrated database system and 10% for contingencies.

Meanwhile, Ata Plus co-founder and director Kyri Andreou is confident about Kitamen’s campaign due to the company’s impressive trajectory over the past year.

“The eSports ecosystem in Malaysia is about to enter into an exponential growth with solid interests from all levels of society, including the grassroots gaming community, the corporates, the government and the public.

“It is indeed an opportune time for the crowd to invest in Kitamen and be a part of the exciting growth journey of eSports,” says Andreou.

The minimum investment round for this campaign starts from RM200 and offers rewards that cater to eGamers.



This article first appeared in Focus Malaysia Issue 279.