The virtual reality

Online gaming has undergone an explosion during the pandemic and gaming lounges are now a significant opportunity for high street and commercial locations.

Whilst concerts, events and cultural gatherings were cancelled worldwide, video games became a virtual stage. Fortnite hosted a Travis Scott concert and Stormzy released a new track in Watch Dogs: Legion. Industry analyst Newzoo recently revised their 2020 market size, with the games growing 19.6% to $174.9bn and growing to $217.9bn in 2023.

Though this growth has occurred primarily online, going forward we expect to seeing gaming increasingly occupy the physical stage (as has been the case prior to the pandemic) in the form of Esports. Despite events, sponsorship and marketing dominating the Esports physical environment, increasingly, we have seen the development of more permanent forms, through gaming lounges, arenas and large multi-format complexes. Esports and video gaming can help provide unique and effective leisure options for high street and commercial locations across the country.

Smaller gaming lounges or arenas have been increasingly appearing throughout the UK, with large brands such as Game now operating 25 Belong Esports locations across the UK. Venues likes these are popular among novice and experienced gamers and allow them to try their hand at the latest games and consoles within a social and fun environment.

Gaming lounges often require less space than an arena and can be easily located in tight city centre locations (including basement and first floor spaces). These locations can therefore help activate underutilised space bringing both direct sales as well as ancillary/indirect revenues (through integrated cafes or mixed format units) and they attract younger consumers. As a consequence, alongside brands such as Belong, we have seen new brands continuing to open locations e.g. Red Bull and Wanyoo (Asia’s largest Esports lounge chain).

In terms of larger venues, the concept of standalone gaming arenas is new. Gfinity Arena, for instance, represents the UK’s first and only dedicated Esports arena, which prior to the pandemic hosted numerous Esports battles and events. Though popular, the commerciality of standalone Esports arenas may come into question, especially in a climate where in-person events are infrequent or banned.

Providing additional offerings beyond purely a viewing space may therefore circumvent some of the issues of relying on individual events. As a result, we are beginning to see locations like Fortress Melbourne. The Alienware sponsored Esports complex provides a broad appeal beyond its viewing arena with specific Esports rooms for avid/advanced gamers as well as bars and an arcade for other visitors looking for a more varied leisure offer. In that regard, places like Fortress Melbourne could provide a glimpse of the future.

Whilst the Esports and gaming poses a significant opportunity for the built environment, there are key considerations that will need to be made. For example, the speed at which the pandemic ends and how willing gamers and customers are to visiting such offerings will ultimately drive the viability of these schemes in the short to medium term, at least.

Nevertheless, as the gaming industry grows, the interest in physical gaming and Esports in unlikely to wane and provides a unique and potentially lucrative leisure option for future landlords and developers.

Tejas Panchal