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Market Insight

Esports gets a boost with Vue Cinemas/Gfinity arena deal

February 26, 2015


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Vue Entertainment has teamed up with eSports pioneer Gfinity to create the UK’s first physical arena for online games enthusiasts. Vue Entertainment has agreed to convert a part of its Fulham Broadway site in London to an eSports arena (Gfinity Arena), seating 600 people over three stages. Launching in March (underlining the relative simplicity of the conversion from one purpose to another), Gfinity already has 25 events lined up before September 2015, a key element in Vue’s willingness to get involved. The deal is exclusive and will see Gfinity commit to a monthly rental fee, subject to a 100% claw back from ticketing revenues. Any additional revenues from events will be shared equally between the companies. Gfinity has committed to spend £350,000 over the period of the deal.

 Gfinity is a relatively new company, started up by gamers and a group of investors in 2013 with an aim of delivering events to games enthusiasts. The company has almost 300,000 registered users at end 2014.  Vue runs one of the UK’s leading cinema circuits, and is also present in Ireland, Germany, Denmark and Poland, Latvia, Lithuania, Italy and Taiwan, controlling 1,773 screens in 187 sites.

Our analysis

This is an important building block for the establishment of eSports in the UK as arena-based events convey the passion and competition of the sport which drives engagement and will lead to more sponsorship. Gfinity's decision to partner with Vue is a sensible move considering this remains an embryonic entertainment medium and one that has had a fair few financial failures over the years. Renting space off Vue is obviously significantly cheaper than building a venue from scratch.

However, eSports are much more strongly positioned today than they were even two or three years ago due to the success of online video platforms which stream eSports content live. Twitch, launched in mid-2011, is now a leading platform for live eSports viewing and it's the ability of these platforms to reach wide numbers of users, deliver scale and generate advertising revenue which is putting the sector on a better commercial footing moving forward. IHS expects global advertising revenue linked to streamed eSports content to reach over $140m in 2015. For its part, Twitch claims 100m unique users per month, underlining the interest in this sector.

The initiative also fits into a wider trend in the cinema sector, aiming to increase low occupancy rates from cinema space, sometimes by non-film content (alternative content or event cinema) playing in cinema screens and sometimes by changing the purpose of the space temporarily or permanently as in this case. The eSports section of the physical site is meant to have a separate entrance and concessions areas, creating effectively an entertainment destination rather than simply being part of a cinema. There is no reason why the cinema screens within that and other Vue sites cannot show the eSports events to cinema audiences as well if they prove successful. Certainly, if the whole venture is a success, it could be rolled out to other Vue sites.

 

Geography
UK
Organization
Vue Entertainment
Research by Market
Media & Advertising
Category
Cinema Games
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