Know your Overwatch from your overheads? Jay Melamed, co-founder and CEO of XP League, details the rising success of eSports franchises.
Interview by Kieran McLoone, deputy editor for Global Franchise
If you’re especially nerdy like me or have very gaming-focused kids that spend as much time as possible playing with their friends over the internet, then you’ll be aware of the growing popularity of eSports.
In fact, the pandemic has only strengthened this space. More people than ever before are finding themselves with time to spare, and are using that time to watch digital athletes duke it out in virtual arenas across a plethora of games. Livestream platforms saw viewers watching 7.46 billion hours in Q3 2020, which was a 91.8 per cent increase on the previous year.
There’s an increasing amount of money involved with this emerging industry, too. Venture capitalists are investing in eSports more than ever before – with figures up to $4.5bn in 2018; a year-on-year growth rate of 837 per cent – and experts estimate that the eSports market could see revenues of $1.6bn by 2023.
As with any industry that’s going from strength to strength, there’s always a handful of franchise concepts that look to bring together its core benefits into one tidy package. XP League is one such brand, with co-founder and CEO Jay Melamed aiming to introduce the sometimes intimidating world of eSports to savvy franchisees all around the world.
But taking a slice of the eSports pie wasn’t Melamed’s only motivator when launching XP League. The main reason? His videogame-obsessed son.
“I’ve got four kids and they’re all super techy,” he explains. “Our youngest son was really interested in coding and so we started looking at coding franchises. That opened the door to youth and technology. I’ve always been really into games, but I never imagined that my career would be based around it.
“We have a big in-person event in August, and within the next three to four years, I’d like to see that tagged as the Little League World Series of eSports”
“I started looking at my youngest son, who’s eight, and he has zero interest in participating in anything athletic. I joke and say that he’s allergic to sweat. He will never, ever be on a sports team. It’s not because he’s not capable; he just has no interest – but I wanted him to have the team experience that my other kids – who played golf, flag football, and soccer – had by interacting with other kids, coaches, and mentors.”
And so the idea for XP League was born: a league-in-a-box franchise model which looks to take the popularity and financial possibilities of traditional eSports, and pair them with the convenience and accessibility of franchising. Launched in September of 2020 after a brief pilot program earlier in the year, the concept has hit the ground running with a network already consisting of 26 territories and 14 states – a figure that Melamed expects could easily hit 100 by the end of 2021.
“The reason that we’re growing this fast is that anybody can come in regardless of their background, and if they’re interested in this and excited, then we can give you the low-cost model where you have everything you need to be successful. It’s not intimidating,” he says.
Part of XP League’s intuitive feel, even for technophobic franchisees, is thanks to its weekly coach’s guide, which is given to volunteer coaches to help them understand that week’s game and specific strategies; all of which are designed around the idea of providing kids with skills like teamwork, communication, and comprehension.
“I like to use my wife as an example. She has the least experience in eSports and gaming. If she can read our coach’s guide and explain the strategy and maps and characters within a game like Overwatch, then anybody can do it.”
Enter the arena
Say that you’re a complete newcomer to the world of eSports, however. How does a brand like XP League actually operate?
“We have a location which is called an arena, and that’s essentially a row of computers. We call it a ‘pop-up arena’. Everybody plays on laptops, and we have what look like heavy-duty camera equipment boxes that contain eight machines and a network router. Our whole platform is built on making eSports less intimidating, so our model is conventional youth sports. We work the same way that kids would play little league or a weekly football team; it’s the same thing, just with video games.
“Instead of goalposts and a field, it’s computers and a network cable. This makes it digestible for parents, and also makes it easier for franchisees to see that this isn’t crazy complicated.”
Franchisees also don’t need to be hardcore gamers, but instead prominent members of their local communities who can build relationships with municipalities, school systems, or community centers. These are the kinds of places that XP League is able to run, and it removes the need for an expensive, fixed brick-and-mortar hub.
“You can come in and say that you want to do XP League as a side hustle, by putting 20 hours a week into it and running a couple of teams out of two locations. Or, you can hire four people as area coordinators, hire out 10 different locations, and run 40 teams. It’s a model that scales really well.”
The future is virtual
With the exponential rise of eSports in mainstream culture, it only makes sense that franchises like XP League could also benefit from the wide adoption of this emerging entertainment trend.
Case in point: the brand has already launched in Canada, and is aiming to open with additional Canuck entrepreneurs before the year’s end – as well as launching in the U.K. by 2022.
“What we’re doing is such a departure from what currently exists, and we have a really great head start on this,” says Melamed. “We have a big in-person event in August, and within the next three to four years, I’d like to see that tagged as the Little League World Series of eSports.”