Melco Resorts Opens Macau Estadium at Studio City
Melco Resorts & Entertainment opened its first eSports venue today, Macau Estadium. The eSports stadium is located in Studio City, Melco’s latest casino-resort on the Cotai Strip in Macau.
The Macau Estadium is the first eSports venue in Macau. Lawrence Ho hoped the stadium brings in a new generation to Macau. Melco, like other top companies, seeks to diversify its customer base as the Chinese gambling industry continues to evolve.
Melco’s foray into eSports earlier this year was deemed a success, spurring CEO Lawrence Ho to build a permanent electronic sports stadium. In April, Melco teamed with Garena, a Singapor-based Internet platform, to stage the eSports 2018 League of Legends Master Series (LMS) Spring Final.
The event attracted a live audience to Studio City’s convention hall, which convinced Melco that the business model was viable. Studio City also hosted an eSports-focused fan festival in the summer of 20127.
What Is eSports?
Esports is the name for competitive video game, online game, and gaming app competitions. Professional competitors enter for prize money, much like players would enter golf tournaments or tennis tournaments.
Electronic sports are a growing phenomenon in the west and in the east. Millennials watch eSports tournaments on cable television or the Twitch platform. Broadcast events have studio shows, play-by-play announcers, and rabid fan support. YouTube channels help hype upcoming events.
Esports Prize Pools to Double in 2019
Last year, the combined prize pool for all eSports tournament circuits was $93 million. This coming year, that total should more than double. Epic Games announced it would spend $100 million over the next calendar year to bankroll a Fortnite eSports tournament circuit.
With such money involved, the eSports circuit has become big business. Professional teams have established fan bases, while corporations and private investors around the globe are bankrolling their own teams.
Esports Industry’s Vast Growth
Ben Lee, LMS eSports Manager at Garena, said that China is the biggest area for growth in eSports. Lee said that half of all eSports viewers likely are from China. Studio City’s Macau Estadium could become the go-to venue for Chinese eSports fans.
Last year, the eSports industry generated $655 million worldwide. That number is expected to grow 38% in 2018 to $906 million. By the year 2021, the eSports industry will be expected to be worth $1.65 billion.
Tencent’s eSports Investment
Melco Resorts is not the only casino operator in Macau delving into eSports. The two other major Chinese casino companies, Galaxy Entertainment Group (GEG) and SJM Holdings, also plan on either hosting or sponsoring eSports events this year.
SJM Holdings CEO Ambrose So Shu Fai said that eSports is “an emerging industry with huge growth potential and global viewership.”
Tencent Holdings Limited, the Chinese online services entertainment, artificial intelligence, and technology multinational conglomerate, has major plans for eSports growth. Over the next five years, Tencent wants to develop a domestic eSports industry worth $14.2 billion. If so, most of the growth in the electronic sports field should come in China over the next 5 years.
Melco Lures Millennial Non-Gamblers
Melco Resorts sees the investment as a way to solve two problems it faced. Melco has wanted to lure millennial customers to their resorts for years. An eSports venue is a good way to do so, because millennials do not like many of the traditional casino games.
Also, Macau officials received advice in December 2014 from President Xi Jinping to diversify its economy away from purely gambling-based revenues. Since then, local officials have pressured casino companies to diversify their attractions to lure more non-gaming customers.
Morpheus Tower Project
Earlier this year, Melco opened Morpheus Tower, a new hotel-resort designed to accommodate mass market customers — not VIP players. In Macau, VIP high rollers come via junket operators who set up the trip and conduct games in private rooms inside casino-resorts. The junket operators pay a commission to rent the private rooms.
The practice is lucrative, but ultimately leaves casino operators with a high-end customers that keeps all the player information. When Morpheus Tower opened, Lawrence Ho said that it would not cater to VIP junket operators.
Instead, Morpheus Tower was designed for mass market players, including family-friendly groups with non-gambling customers. Lawrence Ho said of the project, “Eventually it’s much better to develop your own database than rely on junkets.”