GGLeagues is expanding esports on college campuses by creating and managing leagues for players at all skill levels. I met with Erich Bao, CEO of GGLeagues to hear about his origins as a gamer, the genesis of his company, and what’s on the horizon.
The Esports Revolution
Esports has been growing at blistering rates over the past decade, supported by both the organic growth of the video game market and the emergence of streaming services like Twitch (acquired by Amazon in 2014) and Microsoft’s Mixer. Newzoo estimates 2019 revenues of over $1B on a global scale (up from $130M in 2012), with the largest stake of this revenue going toward sponsorships and media rights for live events.
If the increasing size of the opportunity wasn’t enough, esports fans are a high-earning and dedicated market, with nearly half reportedly spending most of their free time around esports. The fanbase has grown at an 15% CAGR since 2015, and perhaps more compelling is the steady increase in both hours and dollars spent consuming esports content by each fan: Statista reports that individual spending has increased over 40% since 2017.
While streaming services are the primary avenue for audience members to view the competitions, esports leagues themselves are responsible for coordinating the teams and organizing events. Popular games like League of Legends and Overwatch have their own leagues managed by the game’s developers, with teams that hire and exchange players much like their counterparts in more traditional sports leagues.
A growing number of universities have jumped on the esports train as well. It stands to reason that just as professional leagues for traditional sports are fed by collegiate leagues like the NCAA, esports will source talent from university teams. These schools see value in attracting top esports talent to their programs, with some even offering significant scholarships to top-level players.
But what about people that love playing the games, but don’t have professional ambitions? There has been a dearth of opportunities for those gamers to play in an organized fashion, with regular games between familiar teammates and opponents.
Erich Bao and COO Michael Cui alongside a GGLeagues Flag
GGLeagues aims to be the platform for players of all skill levels to come together in organized leagues, making a competitive experience more accessible by anchoring it in a shared geographic location. CEO and co-founder Erich Bao and his team recruit university teams and assemble them into leagues, which pay league dues on a per-player basis. These leagues range from state-wide competitions to intramural leagues. GGLeagues’ software not only creates schedules for each team, but also tracks standings and individual play statistics. Teams play through a season of matches that culminates in a live, in-person finals event. This capstone experience serves not only to showcase the league championship, but to provide an opportunity for participants to interact outside of the digital realm.
That last part is particularly significant to Erich, who when speaking of his players, sounds more like a supportive coach than a league commissioner. His tone is earnest as he explains that he really wants everyone to have fun, a stark contrast to the intimidating language more often seen in esports leagues. The name of his company reinforces this further: “GG” is shorthand for “good game”, the virtual equivalent of the post-game handshake.
Building a Community
Two teams face off in the finals of a league organized by GGLeagues
To Erich, games have always been about relationships. Growing up outside of Houston, TX, Erich spent countless hours playing Nintendo 64 with his brother and best friend. As the trio grew up and spread across the country, they played together online. While this gave them the opportunity to keep in touch, the other players in the game were an indistinguishable mass of anonymous gamers.
Erich noticed that players in his intramural basketball leagues were constantly making friends through the sport. They shared an interest in the game they were playing, they played together consistently, they got together before and after games, and they lived in the same city. All of this contributed to strong friendships that went beyond the sport and enriched the competitive experience. GGLeague began as Erich’s dream to bring the best of both worlds together. Competition would be core to the experience, but the game itself would serve only as a foundation for a platform that was ultimately about connecting people.
Erich shopped his idea around, and at one point participated in a quick pitch event sponsored by University of Chicago’s Polsky Center for Entrepreneurship and Innovation. He was approached by Michael Cui, an MD-MBA student and UChicago research fellow. Cui joined Bao as COO, and the two participated in the Polsky Accelerator, a summer incubator within the Polsky Center.
A New (Venture) Challenger Approaches
Erich and Michael’s hard work paid off, and in the second year of their MBA program they were accepted into Chicago Booth’s New Venture Challenge. They won second place in a field of 33 teams. This victory earned them the attention of angels and institutional investors who invested immediately.
GGLeagues took home second place in Chicago Booth’s New Venture Challenge
Erich put the money to work with key hires. He hired CTO Alex Muench, who brought not only much-needed technical expertise, but significant industry experience – he had founded one of the largest leagues for the game Dota 2. GGLeagues hired another developer to further streamline user’s experience, and brought on league managers to prove out their geographic roll-out model in Illinois, Iowa, and Michigan.
Finally, GGLeagues moved from the Polsky Exchange, a space shared by various UChicago startups, into a dedicated office space. While many startups are drawn to the amenities of mainstream co-working spaces, Erich deliberately selected a more simplistic offering that would encourage his full-time dedication.
Competing for the Competitors
Erich is not overly concerned about head-to-head competition.
“We were already one of the largest leagues in Illinois with over 70 teams. In a market with hundreds of millions of players, that means there’s a lot of opportunity.”
That said, there is no shortage of companies in the space. PlayVS, a Los Angeles, CA-based startup organizing esports leagues for high schools has raised nearly $100M from the likes of New Enterprise Associates. Game developers like Riot, makers of the immensely popular game League of Legends, have also created their own collegiate leagues that focus on professional talent. But to hear Erich tell it, these companies actually benefit GGLeagues by developing the esports ecosystem and creating a pipeline of gamers that are excited about esports.
Erich’s take is that even in traditional sports, an infinitesimally small portion of players compete at the professional level, leaving a gap that’s yet to be filled. One could argue that casual players can simply utilize the built-in matchmaking native to these games, but Erich believes there’s a widespread desire for community-building that online gaming can’t satisfy.
Indeed, online gaming is well-known for toxic culture wherein some players take advantage of their relative anonymity to verbally abuse opponents and teammates. Erich wants to focus his energy on growing the industry and helping to make esports more widely understood. To that end, GGLeagues is an inaugural member of the esports Trade Association of Illinois. Erich is also slated to speak to school administrators at the GSV Summit, an event focused on improving educational infrastructure and outcomes.
The Next Level
Erich and his team sporting shirts with the company’s slogan: Good Gamers, Better People
Erich’s ultimate vision for GGLeagues is to be a widely distributed, game-agnostic platform that can be adapted to accommodate gamers everywhere. The first step in achieving this is geographic expansion. GGLeagues is currently active only in the Midwest and concentrated in Chicago, and he hopes to demonstrate that his league managers can build relationships and establish leagues in new markets quickly.
As they extend their reach, the GGLeagues team has two methods to grow revenue within a geography. The first it to expand to young adult leagues that cater to recent college graduates. The second is to cover more games.
At present, GGLeagues supports only one game: Riot Games’ League of Legends.
Schools have asked if GGLeagues supports other games such as Overwatch and Rocket League, and Erich sees opportunity to earn more revenue within his existing customer base. Indeed, the team has already secured an unofficial license from Overwatch’s developer Blizzard. The road ahead is long, but it looks smoother every day as esports become more mainstream. Organizations including Wal-Mart, the YMCA, and WeWork have positioned themselves to benefit from the industry’s growth, and as they do it becomes increasingly easy for GGLeagues to find the players and infrastructure required to expand their leagues.
That’s all good news to Erich, so long as they never lose their focus on the personal relationships that have made games so important to him. “The whole idea when we started this was to give gamers a chance to meet other people and feel like they’re part of a community,” explained Erich.
Erich and his team are planning to fundraise in early 2020. They hope to secure a Seed / Series A round of $2M to fuel geographic expansion and bring their platform to more schools, and more gamers.