SBJ/January 15 - 21, 2007/SBJ In Depth

Gamers cash in on sport’s growth

NBA all-star Larry Bird might have been younger (age 4) when he received his first basketball for Christmas than Chris Smith was when he received his first video-game system, but Smith’s gift could prove similarly significant.

Chris Smith’s contract with Major League
Gaming is worth $250,000 over three years.

The Nintendo 64 console system Smith received at age 8 was the first in a chain that included Sony’s PlayStation, Sega’s Dreamcast and Microsoft’s Xbox, all of which helped Smith hone the skills necessary to enter his first professional gaming tournament in 2003.

Now 17, Smith has become one of the most financially successful gamers in the country. He has a contract with Major League Gaming that will pay him $250,000 over the next three years.

Sponsors, league executives, managers and players in professional gaming agree that the emergence of young personalities such as Smith will determine the degree of mainstream acceptance the sport receives in the United States.

“We need someone we can galvanize around with a tremendous amount of personality that can drive this thing,” said Ted Owen, chairman of Global Gaming League, which considers itself more of a media and content generation company than a league. “That’s what this country is waiting on.”

To date, one superstar has emerged in the United States. Jonathan “Fatal1ty” Wendel, who has been featured in a segment on “60 Minutes” and in articles in Business Week and Sports Illustrated, has won more tournaments and collected more prize money than any other competitor. He won more than $150,000 in 2005, alone.

Wendel, 25, turned pro in 1999 and attracted sponsorships that totaled $60,000 to $100,000 a year. In 2002, he launched his own brand, Fatal1ty Inc. What began with mousepads cut in his Kansas City, Mo., basement has evolved to include licensed motherboards, mouses, cooling fans and soundcards. He said he receives six-figure checks monthly from Fatal1ty product sales.

Jonathan Wendel is the industry’s superstar.
He launched his own brand in 2002.

To promote players other than Wendel, leagues and media companies have adopted different strategies. Some, such as DirecTV’s Championship Gaming Series, have tried to create stars and build drama around them similar to what World Wrestling Entertainment does. Others, such as Major League Gaming, have let the games provide the drama and encouraged the personalities to emerge by winning — a strategy more similar to televised poker than wrestling.

Major League Gaming has identified talented players within its ranks, signed them to long-term contracts and pushed them forward. So far, it has signed two teams of five players to three-year, $1 million contracts, and hired public relations experts to offer those individuals media training. As a result, Major League Gaming controls the players’ sponsorships and appearances.

As one of the individuals signed by Major League Gaming, Smith understands he’s come a long way since winning his first event in January 2003. The $375 check he received then was the biggest he’d ever earned.

“Now it’s kind of ridiculous how much I can make,” he said.

While financial success doesn’t guarantee his relevance, it is a start, and those invested in the space are convinced stardom will follow. As partners expand beyond gaming and computer companies to include lifestyle brands such as Pizza Hut and Boost Mobile, it should accelerate that process, they say.

“Maybe these guys aren’t known yet,” said Daryl Butler, director of sponsorship at Boost Mobile, which sponsors Major League Gaming. “As these personalities gain exposure, you can say the same thing you did about Tony Hawk or Paul Rodriguez.”

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