Cineplex launches national video game tournament to capitalize on eSports trend

TORONTO -- Cineplex has launched its first national video game tournament in hopes of capitalizing on the growing popularity of competitive gaming to help fill seats at its countrywide chain of theatres.

The company's foray into gaming tournaments is aimed at a younger demographic being pulled away from movie theatres by mobile phones, YouTube and social media.

"Esports are quickly becoming a global phenomenon and, as a company, we've invested in it because it allows us to engage a new customer base," Cineplex spokeswoman Sarah Van Lange said Monday.

Cineplex is offering $50,000 in prizes in one-on-one matchups of "Call of Duty: Black Ops III."

The tournament will begin Saturday with qualifying rounds to be played online, followed by matches at 24 theatres next month and a final event on March 6.

The Canadian office of gaming giant Sony has signed on as the lead sponsor, and the competition will take place on that company's PlayStation 4 console.

Competitive gaming, also known as eSports, has become a huge market overseas in places such as South Korea and Japan, where matches of popular games like Starcraft can sell out stadiums.

The worldwide eSports industry was worth around US$748 million in 2015, according to an October estimate from SuperData Research, with viewership of some events, such as the "League of Legends" world championship, reaching into the tens of millions.

Yet questions remain about the revenue potential for Cineplex.

"It's an unproven model, but there certainly seems to be a lot of gamers out there," said BMO analyst Tim Casey.

Cineplex, which in September announced its purchase of eSports platform WorldGaming for US$10 million, is looking beyond movies for other ways to take advantage of its nationwide chain of theatres to balance out the boom and bust cycle of Hollywood blockbusters.

The company said it is working on further sponsorship and advertising deals for future tournaments.

According to SuperData, sponsorships and advertising accounted for more than three quarters of the revenues for eSports in 2015.

Shaun Byrne, founder of eSport Gaming Events, said his company had built a self-sustaining business by selling tickets to the three or four events it holds each month, but it's still a struggle to raise money from sponsors and advertisers.

While the Canadian eSports business is growing, he said, the number of attendees is rarely large enough to warrant attention from deep-pocketed advertisers. On the other hand, without advertisers the market doesn't have enough revenue to grow.

"There's probably a few million fans just in Ontario alone right now," Byrne added. "I have to think that, long term, these things are going to be a lot more accessible and have a larger fan base than even traditional sports."