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Israel grows in the world of esports

Eden

By Eden

April 01, 2022

Racing driver Alon Day from Israel was the Asian champion in Formula Renault competition in 2008 and winner of the NASCAR European series in 2017, 2018 and 2020.

Since January this year, Day has a new job as a virtual driver for the Israeli esports company Finest. One of his tasks is to sit in front of a computer monitor playing racing simulators while legions of fans watch his activity on YouTube, Twitch and other live streaming platforms.

For Day it is not something out of the ordinary: as a teenager, he entered the world of racing thanks to computer games and simulators and that is why he said that joining the Finest Team is a great opportunity. Finest is the first professional esports group in Israel.

Created in 2019 as “Team Finest” by Rubik Milkis – and with Yotam Nachshon joining a year later – this organization runs teams in four of the most popular multiplayer video games: Fortnite, FIFA, and two shooters: Counter Strike and Valorant. This global startup even has a professional team of women for Valorant, which is incredible because the game streaming audience is 85 percent male.

Finest competes in Israel with Nom, the only other professional esports group in the country. Esports is big business. There are 500 million fans watching their favorite players click, swipe and sometimes stab others. Current revenue exceeds $1 billion with year-over-year growth of 12 percent.

A younger generation

In esports, viewers don’t pay to watch. So where does the money come from? It is that some transmissions are shared by Finest partners. However, the majority comes from sponsorships, just like in non-virtual sports. Sponsorships pay cash prizes that, in some cases, can reach several million dollars.

Finest’s sponsors include Pizza Hut, Logitech, and Tazos, a leader in the blockchain space that helps Finest make money another way: by selling NFTs (non-fungible tokens). It is also possible to buy non-tangible pieces – such as T-shirts and hoodies – on the company’s website. For Tal Perry, chief revenue officer at Radarzero, which owns a majority stake in Finest, all brands want to be affiliated with games.

“There is the younger generation and it is difficult to reach them. They don’t listen to the radio or watch TV. If they are online, they are on streaming sites. For traditional content pages, more than a third have AdBlock installed, so they don’t even see the ads. Thus, for brands that want to reach this audience, esports is one of the best alternatives. They can sponsor tournaments or work with influencers in the games that stream content online,” he explained.

This is an example of an online influencer promoting Finest vs. Case Esports while playing Counter-Strike and streaming on Twitch. The video has already accumulated more than a million views. And it’s not uncommon for a top-tier team in Europe or Latin America to have 45,000 or more simultaneous viewers watching live, the equivalent of filling a medium-sized soccer stadium. In North America, those numbers can add up to hundreds of thousands of synchronous views. The games themselves are played on the servers of the game creators; Twitch and YouTube only allow fans to watch.

A serious workout

Just like the real thing, Finest players practice six to eight hours a day with a coach. Actual play can include three or more matches in a day with players at their computers for up to ten hours at a time. Players see videos of the teams they are to play against, as well as recaps of their own game so they can discuss strategy. Team Finest has a sports psychologist on the payroll and the most important thing is that the players earn a full-time salary.

Before the arrival of COVID-19, Finest sponsored face-to-face events. Most esports games are for PC and consoles rather than app-based ones played over the phone. “There aren’t many companies dealing with this in Israel because the investments are quite high and the time until you see revenue is longer than for an app uploaded to the app store,” Perry described. He himself met Finest when it was an amateur club that did not pay salaries or was not even organized as a legal entity. Today, the company’s teams compete throughout Europe.

“It is played in regions, so we don’t play in Asia. We would like to get there because it is estimated that 35 percent of the esports market is in China. We played a Chinese team once when they were in a training camp in Europe.”

The main problem with crossing too many time zones is latency – that’s when the servers have trouble communicating and the game hangs and stops.

The effects of the pandemic

The coronavirus turned out to be a very beneficial factor for Finest. With people locked up in their homes, esports grew exponentially. When real-world stadiums closed, even TV sports channels started broadcasting esports. But there were also downsides. “We had plans for local tournaments where at least the semi-final was going to be offline with a live audience but we had to scrap them. Sending the team to a training camp in Europe also had to be put on hold a couple of times. Even the prize money for the winners was reduced as there were fewer major events,” Perry said.

Still, he admitted that the pandemic strengthened esports with an audience and generation that weren’t there but were in front of the computer all the time anyway. Today, Finest has more than 40 people, including all the players, and builds its own performance room in Tel Aviv so that everyone, as well as those in Europe, can be together for practices and official competitions.

In contrast to fantasy sports, where players pick a team from the real world and watch them compete, esports has players dedicated to their simulated craft. Esports started in the 1970s and the oldest known video game competition took place at Stanford University in 1972 for the game Spacewar.

Game console maker Sega started sponsoring arcade tournaments in Japan in 1974. Atari jumped in in 1980 with a video game competition for the then super-popular Space Invaders. In the US, the televised esports show Starcade aired 133 episodes between 1982 and 1984.

For its part, Nintendo jumped into esports in the 1990s. PC gaming also benefited from internet connectivity during this period when games like Counter-Strike emerged. In turn, Nintendo organized the 2010 Wii Summer Games.

Even the Olympics are exploring esports options.