MGM Enters eSports Arena
Wednesday, April 26, 2017
MGM’s Luxor is building the Las Vegas Strips’ first eSports venue
by Brad Weissberg | Published: April 26, 2017 | Venues Today
Las Vegas is the latest city to announce construction of a dedicated eSports competitive gaming venue, a venue vertical growing at breakneck speed.
The new multilevel eSports arena will be in Luxor Hotel & Casino, an MGM Resorts International property, on the Las Vegas Strip, where they are ripping out their glitzy LAX nightclub to make way for the new eSports facility. Allied eSports and eSports Arenas are MGM’s partners in the project. Allied Esports portfolio includes facilities in China, Europe and North America.
The arena will feature a competition stage, LED video wall, individual gaming stations, food and beverage, merchandise and a television-quality production studio.
“We watched the growth and excitement around eSports for some time and knew we wanted to get in the game,” said Niklas Rytterstrom, GM, Luxor Hotel & Casino, Las Vegas. “We always want to keep our amenities fresh and offer new things to our guests and, as soon as we met with Allied eSports, we quickly realized they have the knowledge, expertise and a vision for their global network of eSports properties that we wanted to be a part of.”
The project has been in development for a year. Rytterstrom said the new facility is still in the design phase and expects construction to start in early June and the facility to open the first quarter of 2018. The new venue is expected to host eSports tournaments, around two to three a week, in combination with “walk-ins that just want to come play and interact with other eSports fans.”
Unlike eSports Arena’s Santa Ana, Calif., location, and the new eSports Arena that’s being built by the company in Oakland, which operate on a membership model where $10 a month gets the gamer unlimited access, Rytterstrom envisions a different model for the new Luxor eSports arena, with an as-yet undetermined admission fee.
“The community around Las Vegas is important to us, but with 40 million visitors a year in Las Vegas, I think this will be a destination for eSports fans and a must-see attraction,” he said. “We expect a large portion of our eSporting guests will be visitors and are still working on how we will monetize entrance fees.”
Rytterstrom has big food & beverage plans for the 30,000 sq.-ft. space that will hold between 1,000-1,200 people. “There will be two bars as well as a fast-casual restaurant,” he said. The facility will be open seven days a week with the exact hours still to be determined.
Situated in gambling-town Las Vegas, there are also early plans to allow wagering on the eSports events. “We’re designing the space with that in mind,” he said.
“What we’re really excited about is that this is a top-down renovation, multi-level, that will be customized and every square foot will be designed with the eSports fan in mind,” said Rytterstrom.
“This is a larger initiative for the company overall that fits nicely with the interactive gaming opportunities that we’ve introduced throughout the company like the interactive table games we’ve introduced at a few of our resorts,” said Scott Ghertner, executive director, PR, MGM Resorts International. “This an opportunity and a focus for our business development team.”
Paul Ward is the founder and CEO of eSports Arenas. The company’s flagship venue is a 15,000 sq.-ft. space in historic downtown Santa Ana, Calif. The main floor is 13,000 sq.-ft., with the rest of the space devoted to production studios, a broadcast room, a greenroom and offices. The space can hold up to 1,000 people. They average one event a week and are open to the public, Monday-Friday. The facility opened in October 2016. The Santa Ana location currently has 1,500 members.
“We adapt to whatever market we are going into,” said Ward. “Here we are in a 1920’s building so we took advantage of the industrial look and kept all the exposed brick. In Oakland, we’re in Jack London Square and we’re designing it to fit in with the rest of the buildings there. In Las Vegas, we are going for a high-end Vegas feel.”
The weekend events can be anything from a $100,000 tournament to a game-launch to a private party. Esports Arenas also provides a turnkey space that can be rented. “It’s audio-visual ready,” explained Ward. “It’s a big source of our income.”
The other big part of the eSports Arena’s revenue comes from sponsorships and partnerships. “There are a lot of brands getting into it and a lot of money that can be made in terms of distribution of the event,” said Ward. “We’re creative with our partnerships, and we find the middle ground where the economics makes sense that a normal venue would never even attempt.” Sponsors have included Nestle, Dolby, Cup Noodles and Hot Pockets.
Events are broadcast on a service called Twitch TV, which was recently purchased by Amazon for $980 million, and seen by up to two million people. “Twitch TV is the primary place for people to watch video-game content,” he said. It’s free to watch with sponsor’s embedding the logo or message into the content. “There are no commercials like a normal TV show would have.”
Ward foresees an eSports Arena in “every large city in the country” and predicts they will open 12 in the next two years. “We plan to open two new venues every quarter,” said Ward.
Ward is particularly excited about the Las Vegas arena. “This will be true to Las Vegas and be in the spirit of Vegas. It’s bigger than the other facilities will have a TV-ready production studio,” he shared. “It’s an incredible place and we’re really excited about it.”