Pakistan has a nascent esports in dustry that can grow much bigger

The increase in number of esports tournaments with pool prizes worth up to Rs 20 million indicates growing potential in the industry

By Zunairah Qureshi

Sohail Tanveer and other cricketers drafted into Pakistan Super League’s (PSL) silver category of players were paid close to Rs 5 million.

What if we told you that is the same amount a few youngsters made by winning an esports tournament in January 2022?

Earlier this year, Pakistan’s esports industry hit a new record with its largest ever tournament, organized by the middle-eastern esports organiser, Galaxy Racers. The tournament’s pool prize valued at Rs 20 million and the highest payout went to a team of five youngsters who won Rs 5 million for conquering the PUBG championship.

And this is only one tournament, there are dozens that happen in Pakistan across the year, which are in addition to international tournaments that offer even higher in prize money, where local players represent Pakistan. The head of Galaxy Racers Pakistan division, Fakhr Alam has announced that he is aiming for a higher and higher cash pools in the coming years going from ‘Rs 20 million to 50 million and from there to 100 million.’

Tournaments and winning cash prizes are not the only way esports enthusiasts make money. There are other professions that stem off from the platform and this is only the start for Pakistan as the industry is steadily growing.

Of course, comparing tournament winnings to a PSL salary is not exactly a tit for tat comparison. However, it goes to show the promise there is in an untapped industry that could become something major for a youthful Pakistan.

The growth of the industry is consistent but it does have its challenges, especially considering that the country is still building its technological knowledge and infrastructure. It requires the right kind of environment for which there is much to be understood about the nature of an esports industry.

In any case, one thing is for sure, esports has been picking up in Pakistan and it is bound to flourish further in the coming years.

The industry’s scope in Pakistan

Esports started to surface in Pakistan around 2003 when it was based on gaming zone’s tournaments and what Mamoon “TeaTime” Sabri, Pakistan’s leading esports strategy consultant and international broadcast talent, termed as ‘grassroots level’ activities. He went on to explain that, ‘Then, around 2005 to 2007 we had Pakistani teams going into world cyber games. We’ve had a very long history of esports in Pakistan - it generally came in waves. So, from time to time a lot of money was invested into the local industry but it didn’t really pick up until 2015,

2016 onwards.’

Sources have confirmed that the industry is relatively still quite small with Mamoon Sabri speculating that, ‘I’d be surprised to see if it’s making more than $ 1.3 million annually.’ However, there are positive sentiments around the industry’s fast growth as more and more international as well as local companies pour in.

Most recently, Galaxy Racers, an Emirati-owned esports organiser held the biggest tournament in Pakistan’s history with a cash pool prize worth Rs 20 million. It was a large-scale two-day event, held in Islamabad in January of this year with some of Pakistan’s leading influencers such as Mooro and Junaid Akram present to promote the event.

The event was televised live on Ten Sports, which was its official media partner alongside their cash prize sponsor, Mountain Dew. The tournament was also viewed through YouTube live streams.

The tournament was held as part of a collaboration between Galaxy Racer’s with the government’s Special Technology Zones Authority (STZA), an initiative that encourages foreign investment in the local tech industry.

In addition to other government officials like national security advisor to the PM, the event was also virtually joined by the President, Dr. Arif Alvi who commenced the ceremony by highlighting the importance of investment in esports for Pakistan’s large youth population.

Apart from the tournament, TenSports and Group M, a leading media company, announced that Galaxy Racer will be launching Pakistan’s first esports league and in addition, also hosting nationwide inter-school and collegiate championships.

Other notable events include Garena, a Singapore-based game developing and esports organising company’s biannual national tournament of their battle royale game, Free Fire. Each of these tournaments has a cash prize worth Rs 10 million, with the top prize-winning team bagging Rs 3.5 million. Garena hosts multiple tournaments and events around the year including city-wide and inter-university competitions.

A number of companies and initiatives have been launched in Pakistan in the past five to six years including Riot Games local division and Telenor’s Gamebird esports platform. Other foreign companies which have shown interest in the industry include Next-Gen Games and the Hong-Kong based NODWIN Gaming.

Esports Pakistan is a local group that helps organize esports events and has acquired dedicated gaming arenas with computers and gaming consoles for the purpose of hosting tournaments.

Esports is not simply about the revenue generated

The thing about the esports industry is that it isn’t just valued by how much it makes. This is because it also offers opportunities for the youth to express their diverse talent and skills, while making an earning off of it. Zafeer Khan, Community and Esports Manager, Free Fire Pakistan shared that, ‘The direction we are headed in is to support the youth in developing esports related career paths. Even in terms of gaming streams, we are still small-scale but we are getting there. The culture is definitely there.’ Free Fire Pakistan and other organisations also support local teams in making their way to international tournaments where they represent Pakistan. The winning team of the national tournament this year is all set to participate in the Free Fire World Series to be held later this year in Singapore with a chance to take home sums from the pool prize worth $ 2 million. According to some sources, Pakistani players made around $ 2 million in winnings last year. Based on data from esportsearnings. com Pakistan ranks 31st globally in earnings valuing at a total of $ 4,866,000 made by 293 players. Esports and gaming have also contributed to other niches like the content creation and game streaming markets. Although very difficult to succeed in, according to Mamoon Sabri, esports strategy consultant, anyone with 200,000 above subscribers could easily make around $14,000 through a single sponsorship. There are also unofficial tournaments held by local groups who organise esports competitions on their own capacity through online forums and Facebook groups. They charge registration fees which according to one professional PUBG streamer and esports competition organiser, does not make a profit for them since it’s taken up by organising costs and cash prizes. However, according to Mamoon Sabri, even these unofficial tournaments benefit the game companies as engagement with their games increases. Viewership and broadcasting are prominent parts of the esports experience. In fact, Sabri went on to say that, ‘Number of players is not what an esports company is looking at as a crucial metric. Players don’t generate revenue for a company. It generates money from other people who are watching the tournament, recognizing and being more involved with the game, because there are more points of focus.’ He elaborated by comparing esports to any other televised sport like football or cricket where the wider public has stakes and interest. Their support for the teams and attention are what generate revenues.

Zafeer Khan from Free Fire was hopeful that, ‘I think very soon you can expect to see live broadcasts of esports by our major sports channels. Because the government is interested. The population is interested. Corporates are interested in partnering up with us. The direction for this industry is just towards growth.’

Understanding the growth of esports

The industry has been growing at a steady pace with the number of players increasing, more investment coming in and the number as well as the scale of tournaments expanding each year. The Free Fire team told us that they started off in 2018 with smaller competitions and what initially used to be a prize pool for the national tournament worth Rs 2.5 million grew to Rs 10 million this year. In terms of human resource capacity, a few companies have established their offices in Pakistan like Tencent Games and Free Fire, the latter with around 25 full-time employees and further 200 contractual workers through agencies. Mamoon Sabri told Profit, ‘Most of the companies’ employment and work is done through agencies but right now there aren’t many of these that specifically cater to the skills required for the esports industry. More and more esports companies and agencies are coming in and I think the industry can create 3000 jobs in the next seven or so. If everything goes right, it will probably manage to do so in five years.’ However, the same cannot be said about esports players. Sabri explained that like any other professional sport, professional esports players and successful ones at that, are difficult to come by. ‘At present there are very few professional players, maybe under 10 or so. Semi-professional players have grown a lot in the past few years though.’ While esports companies are more optimistic citing Pakistan’s ‘70% internet penetration among its 70% youth population’ for increase in esports gaming, Sabri did not believe it’s that simple. While professional players can make a full-time income, semi-professional players get by with around Rs 17,500 which is minimum wage. When talking about professional players though, of course, there’s a lot of investment that goes in. For instance, using the newest released phone that not everyone can afford. Same goes for gaming content creation or streaming, which requires expensive equipment, and particular skills. It also requires one to compete on a global platform with many

others and undoubtedly, the opportunity cost of choosing to make it as a professional esports player or streamer is just very high. For these reasons, Mamoon Sabri said that, ‘I wouldn’t say this is a viable career path. It’s not actually as accessible as it is mistaken to be.’

When asked if the number of professional players making a living out of esports could possibly grow to four-digit figures, he gave a resounding ‘no’ in response and said that, ‘What sport has 500 athletes playing for a living? Maybe five years down the line we can have 500 people playing for a living but four-digit is very difficult.’

But of course, there are challenges

While the esports industry has undoubtedly grown, there have been hurdles along the way that impeded it and even now a lack of understanding among investors and other relevant organisations slow the process down.

According to one source in the industry, ‘We were a booming industry and even became a location for the Counter Strike World Cup but because of mismanagement and corruption we were sidelined until recently when all these giants jumped in.’

Sabri told Profit that, ‘Earlier on, foreign companies would hold tournaments in Pakistan but then someone would run away with the money and this cycle kept repeating for some time.’

Then, there is also the challenge that existing tech companies and investors or even the government for all its interest in esports does not fully understand how to spearhead the growth of esports, which like any industry, requires its own specialised mechanisms and facilities. Presently, existing companies have been trying to develop an esports ecosystem through what they call as ‘work at the grassroots level’. This refers to their attempts at engaging university students, offering training, scholarships, and providing the platform.

Tencent Games, which is the largest Chinese video game publisher and runs PUBG mobile in Pakistan is the esports company that is currently operating on the largest scale locally. With an estimated 15 million players and partnerships with the government and brands like PSL’s Lahore Qalandar team, PUBG has become quite popular in Pakistan.

‘PUBG has done a great job at marketing. They put out like, you know, songs with big artists. The cultural elements that they strive to maintain is very good,’ commented Sabri. ‘However, while they have done some great things, they have also been very damaging for the industry.’

He explained that this is a simple business tactic that is only expected of a ‘behemoth’ company like Tencent Games. ‘Tencent is like FIFA for PUBG. The way FIFA is for football, where they operate the global circuit in every single way. So Tencent will never want their global championship to not be the biggest championship.’ It is because of its size that the company has managed to gain control over the international circuit and exclusively owns whatever esports infrastructure there is in the country since there isn’t already an existing one like in Europe or other regions.

This makes it harder for other companies and especially newbies to enter the industry. Another way Tencent maintains its dominance is by ‘selling exclusive sponsorships for major sponsor categories. They can have an easier time monetizing when they have a monopoly over things. And even in Pakistan, we have seen this happen, which is that in the past years, Tencent has partnered up with certain smartphone providers as PUBG’s exclusive sponsors.’

Mamoon Sabri further explained that, ‘What that means is that if I want to run a tournament, I can’t get a sponsor from anyone that isn’t that smartphone provider. Revenue through sponsorship, even internationally, accounts for 79% of revenue across esports. We don’t have direct monetization for third party operators, especially. So then if I want to operate a tournament, I don’t have any choice.’

Tencent as a company is working towards its own gain, as Sabri put it, ‘They are doing a great job for themselves. It just isn’t doing a great job for the Pakistani industry but it isn’t beholden to do so. That’s Pakistan’s issue.’

It’s true that no company has a responsibility towards nourishing Pakistan’s industry but PUBG Pakistan has on occasion peddled the marketing narrative that it works to promote the Pakistani industry and has also collaborated with the government on certain programmes.

Profit tried to reach out to Tencent Games local office multiple times for their take on the story but received no response.

It’s clear that Pakistan’s esports industry is growing and brimming with potential. What it needs is a proper structured system that can help it take off. Gaming and other technological sectors are often recognised among the country’s most promising areas for its developing economy owing to Pakistan’s youth bulge phenomena. But it all comes down to how seriously the relevant bodies and people can take creative professions like gaming. n

Can malls ever be replaced?

By Ariba Shahid

What do you do for recreation in Pakistan? Most people will respond by saying they eat out, go to the mall, sometimes a park or club, or play a sport. The number of recreational spots for Pakistanis is limited and therefore families often find themselves at a mall or an eatery. This trend itself is enough to show you that malls are here to stay.

A shopping mall is a large enclosed shopping center that houses a number of retail outlets, department stores, food outlets, kiosks, and activity areas. The term “mall” originally meant a pedestrian promenade with shops along it. However, following the 1960s, the term mall started being used for large enclosed shopping centers that had grown popular at the time. Over the years, malls have evolved from just a collection of shops into a recreational destination where families come and spend time together. For most people shopping is a visceral experience where individuals like to make use of their senses of smell and touch as well while making a purchase. For instance, buying a bottle of perfume online may be fun, however, going to the mall and actually smelling it, feeling the bottle, etc makes the experience enjoyable, especially for a first time purchase.

Similarly, while buying clothes, it makes sense to see and feel the fabric in person. You’re not able to look at the design and how it would look on you over the internet the way you can in a physical store.

Keeping that in mind, people are likely to continue with in person shopping at physical stores.

How are malls different?

However, malls are different from just stores.

“You have to be more than a collection of shops,” says Faisal Nadeem Riaz, a director at Dolmen Group while addressing an audience at the Future for Retail Summit 2022 organized by Terabizz and Chainstore Association of Pakistan.

“Retail is not just about the product any more, it’s about the experience,” Riaz adds.

Malls have turned into socialization hubs. Shopping had always been a social experience that people liked doing with friends and family. However, with the existence of malls, it grew as there would be something for everyone in a group to look at. Online shopping, however, is better suited to those that don’t think of shopping as a socialization activity and prefer to do it on their own. Such people are more likely to shop alone online in the comfort of their homes.

Moreover, for individuals that place immense stress on instant gratification, malls or in person shopping. Deliveries often take time when you order online, however, when you buy at a store not only do you get instant gratification, but also get to experience the prodiuct through your various senses of touch, smell, etc. You also don’t have to worry about calculating shipping costs, entering your address, worrying about who is going to be home when you get the product.

More importantly, you don’t have to worry about the hassle of getting the wrong product, size, etc and getting it exchanged through courier services.

All this, however, has been push factors for physical store shopping, and not entirely malls. Malls are more than just a shopping experience.

Riaz explains, “Instagramable content is important for the success of a mall.” What this means is people go to malls and like to tell people that they are at a mall, or like the experience of one. It makes shopping, an activity where you’re parting with money, a happy one.

Think of it this way. Almost every time you go to a mall you’ll notice mall activations or BTL activities. Sometimes they’re sponsored by brands, sometimes by the mall management itself. Why? So you are lured into the mall and then spend more time there. Malls are theoretically designed to make you spend more money. The layouts are confusing so you get lost and walk through more of the mall than you had intended to, especially because the more stores you visit, the more you’re likely to spend. This is also why the food courts are on the top floor so you stop by stores as you make your way up.

Malls rarely have general seating areas. If you want to sit, you’ll either have to sit in a store or the food court. This again drives you to spend more. Clustering similar shopping categories also helps push sales as while you may resist one store, do you have the strength to resist more?

To mess with you more, you’ll also find that malls do not really have clocks so that you lose a sense of time. Basically, the longer they keep you around, the more likely you are to spend.

Lastly, have you ever wondered why malls have activations, BTL activities, concerts, book signings, and events? The purpose is to lure you into the mall. Once you’re there, you’re likely to stick around and potentially shop. This is shoppertainment.

Essentially all this is done to prop up footfall which is used as a metric to gauge purchasing opportunities that present themselves. Not everyone that enters the mall ends up buying something, however, the more people that enter, and the higher probability of making a sale.

Shoppertainment isn’t a new concept. The term popped up in the early 1990s, however, the concept has existed for decades. It is the provision of entertainment or leisure facilities within a store or mall as a marketing strategy. This is done to attract customers. However, with the world going digital through the use of ecommerce, one wonders how ecommerce sites can lure in customers through entertainment.

Will ecommerce take over mall customers?

Shamoon Sultan, Chairman Khaadi explains that the shopping experience is essential for retaining customers.

“There are three types of customers, ones that go to the mall, standalone retail shops, and those that shop online. The ones that go to standalone shops are more likely to move to ecommerce than the ones that go to malls,” explains Sultan. What this means, is that people that go to stand alone stores know what they want and go and pick it up. They want a no nonsense shopping trip that is far from the BTL activities, tantalizing smells of the food court, and the sales at other retail outlets. All they want is to go into a particular store without walking through a maze and get their product. Such individuals are likely to pick up on online shopping and use it. However, individuals that like the whole shopping experience and see it as more than just buying a product will continue going to the mall. Shamoon explains that this makes it essential for businesses to improve their ecommerce channels and also work on their retail store front. Sultan however feels, “While businesses have to build ecommerce channels, they will not be on the frontline.” He also adds that Malls now need to set up ways in which they connect online channels with offline channels. n