Six Lessons Learned After Hosting 25 Esport Tournaments in Six Months

When Paradigm opened in August of 2018, our goal was to host an esport  tournament every weekend of every month. Too ambitious? That’s what we wondered at the time. Six months later, we have not only held an esport tournament every weekend, but we’ve squeezed in a few sporadic tournaments as well. Looking back on our first six months, here’s what we have learned to date:

One: Fortnite is King..For Now

We knew Fortnite was popular, but we initially believed that we would get greater participation from League of Legends and Overwatch teams in the arena-style format. Nope. Middle school and high school students were excited to enter a Fortnite tournament and their parents were on board as well. We had 34 2-person teams for our first tournament and the place was packed. This brought in the entry fee as well as sales on merchandise and cafe sales. Big winner. Having said that, all games have a shelf-life and it’s hard to say what it will be for Fortnite, but in the short run, we have learned that holding one Fortnite tournament each month is a sure winner.

Two: Building Community Is Important, but it Takes a Lot of Work

They say Facebook is not for the under-30 crowd, but ‘they’ would be wrong. Sure, Instagram and Snap are bigger, but for organizing and advertising events, Facebook remains the better platform. Gamers will engage with Facebook to stay in touch with the events at their favorite gaming facility; however, for pure gamer engagement, Discord is the place where this community resides. We encourage our gaming community to engage with this platform to find tournament partners and communicate with Paradigm on tournament details. Sometimes there’s some reluctance, but getting everyone to reside on this gamer platform has paid community-building dividends. We have grown our community to 500+ people by engaging conversation through our interns and community leaders.

Three: The Future of Gaming is in Small Tournaments

Most of what we read about in the gaming world relates to massive tournaments that have more viewership than the Super Bowl. Tournaments that sell out in minutes rather than days make headlines. The reality is that most esport tournaments will not be massive in size, but rather smaller venues holding 50 to 200 people. Just like most basketball games are not the NBA Finals with the Warriors and Cavaliers, but instead held in high school gyms across the country, esports tournaments will follow a similar pattern. This is the Paradigm model: create a venue that is affordable and accessible for high school, college and recreation teams and there will be constant competitive activity. Cultures are started by individuals feeling they need to be a part of something “more”. By giving gamers a local atmosphere to fine tune their skills and compete in, the attention of public eye is drawn.

Four: Monetizing Esports Requires Multiple Revenue Channels and Some Creativity

Will esports be huge? Yes.

Will big revenue be attached to it. Yes.

Will it happen immediately, No.

There are big expectations for esports with big numbers attached. But the reality is this is still a nascent and growing sector of gaming and entertainment. While viewership of events on Twitch and other platforms may exceed the largest sporting events in the world, the revenue in gaming is still down at the Wimbledon level. It’s the same with local esport venues. Revenue is growing every month at Paradigm and the path to profitability is clear, but it will take time and careful nurturing. In the early days, the path toward profitability is a combination of entry fees, merchandise, food and beer sales, some streaming revenue and sponsorships. For our facility, we need 1,500 people to walk through our doors per month at an average revenue drop of $20 per person. This requires events on weekdays and on weekends. Our saving grace is the virtual reality gaming stalls in our facility. If you come in to play esports and buy a $25 all-access pass, then we are far ahead of where we would be otherwise.

Five: Virtual Reality Esports Are Coming, But They’re Not Here Yet

Fortnite is cool, but it’s played on a 2D screen. Imagine strapping on a VR headset, immersing yourself in the Fortnite world, jumping out of the bus and parachuting into battle. This is the future of esports. It’s real, it’s immersive and the intensity is much greater. However, due to cost, access to VR facilities and VR esport games, this vision for the future of esports is still a ways off.

Nevertheless, we held our first VR esport tournament in December and it was decent. With the release of the movie Creed, a VR boxing game was released along with it. We invited attendees to participate. We put untethered HPZ backpacks on the combatants and turned them loose in our free roam arena. The boxing matches were broadcast in our seated arena for people to watch and enjoy the fights...complete with a play by play broadcaster. It was cool. We could see the future but the participation was limited. As a business model where we want hundreds of people coming and going through the facility, our Creed VR boxing tournament didn’t quite get the job done. We learned a lot and we will do it again, but the next one might be on a Friday night instead.

Six: There Is Never Enough Preparation, but Valuable Skills are Through Execution

By comparing professional esports to the professional sports industry, it’s easy to see there are many gears turning the machine: crews for production, casting, refereeing, graphic design, social media, and organization. All these areas and the individual tasks required for them to function cannot be done by one person alone. After hosting the first tournament, we knew we would need to put together a team to ensure success.

The Paradigm Esports Internship was created to teach aspiring esports professionals the logistics of tournament management. Before each tournament, at a minimum, the staff must prepare by testing each set-up, configuring the stream, doing a sound check, uploading to social accounts, updating computers, checking the registration process, and finally ensure all the individual pieces of technology (mice, keyboards, hdmi cables, ethernet chords, etc) work effectively. Then the real fun begins while the tournament is occurring. Four years of business school will not solve, “Hey my mic isn’t working”; but technical experience and deductive problem solving does. Instructing people to post to their social media is easy, but once you have the weight of a company behind your name it raises the bar for a professional cast.

Paradigm is a grand experiment in the future of esports and virtual reality. The facility will be used for more than just gaming, but it’s initial foundation is the world of location-based entertainment. Each week, we learn a little more and grow our participation. We know that this space is just about to take off, but facilities are needed to make this happen. With a little perseverance and generous investors, we will see the maturation of not only esports, but the business model that sports it.

Steve Grubbs is the founder and CEO of Paradigm, a virtual reality and esport training and gaming center. Paradigm is located in Davenport, Iowa with plans for more across the United States.