Trophy life: TSM founder Andy Dinh with the 2017 League of Legends North American championship hardware. He used to give $20-an-hour gaming lessons to Steve Arhancet, now co-CEO of rival Team Liquid
Image: Ethan Pines for Forbes
Thousands of screaming fans packed the stands and floor space at Boston’s TD Garden in September 2017—to watch a video game championship. At Center Court was an elevated stage with ten computers running the competitive game League of Legends. Four massive screens were mounted above to display the action. When confetti finally rained down on the crowd, the threepeating champs jumped around between smoke machines as a familiar chant broke out—“T-S-M! T-S-M! T-S-M!”—much like Alabama fans cheer “S-E-C! S-E-C! S-E-C!” in Tuscaloosa.
TSM—short for Team SoloMid—is one of the most recognisable brands in esports, and its victory in Boston built on its success as the winningest North American team in League of Legends, competitive gaming’s top title. But its founder, CEO and owner, Andy Dinh, who emerged from the sidelines to hug his players onstage, had only one thought after the team’s sixth championship: What’s next?
“I want TSM to be a household brand; I want us to be the Dallas Cowboys and the Yankees,” says the perpetually kinetic 26-year-old, who was featured on Forbes’s 30 Under 30 list in 2017. “It’s not enough for me just to be successful in North America.”
Esport companies like TSM field competitive teams in video games that are as fun to watch—whether live in a stadium or online on a game-streaming service like Amazon’s Twitch—as they are to play. The basic premise of League of Legends has two teams of five at opposite ends of an intricate map trying to destroy each other’s bases. Throughout a match, typically 30 to 40 minutes, players kill monsters (and, of course, opposing players) to earn gold and “experience” to buy new upgrades and become stronger than their opponent.
Billionaire owners of professional sports teams such as Robert Kraft (of the New England Patriots) and Jerry Jones (Dallas Cowboys) are among the most significant new owners in esports. Because they own (or operate) venues where esports competitions can be held, these moguls have a front-row seat to the industry’s explosive growth, and they are spending millions in hopes of building franchises as big as TSM.
Worldwide, the esports industry is projected to reap nearly $1 billion in revenue this year and is building an ever-growing global viewership. That’s nothing compared with NFL football ($13.2 billion in 2016), but it is rivalling second-tier sports like Major League Soccer ($644 million in 2016). ESPN has been broadcasting esports for several years, and last year’s League of Legends World Championship final had an online viewership of 57.6 million—about half of last year’s Super Bowl TV audience. Major brands are also spending millions to get in front of this young and rabid male audience. Video gaming might even be an Olympic sport someday soon. League of Legends has already taken the first step, appearing as a demonstration event at the 2018 Asian Games.
The concept of revenue sharing, particularly of broadcast income, among teams—common in traditional sports leagues—is still in its infancy in esports, so sponsorships dominate the space. The Amsterdam-based market researcher Newzoo estimates that 40 percent of overall revenue this year will come from sponsorship deals. Some brands partner with the league and tournament organisers, while others invest on the team side. TSM features Geico and Gillette on its jersey, creates “Team Soda Mid” commercials with Dr Pepper and uses Logitech keyboards and mice during competitions.
The paucity of reliable ROI metrics have led advertisers to look at social media and streaming to help make decisions about where to spend. TSM and its players have 60 million followers across various social networks. Forbes estimates that TSM had revenue of $21 million for 2017, on the high end for an esports company.
Despite all this success, Dinh admits TSM could better take advantage of new opportunities in the rapidly evolving market. The next big opportunity may be the 2017 video game Fortnite, a billion-dollar sensation that 125 million play around the world, including celebrities such as Drake and Chance the Rapper as well as pro gamers who stream their matches online to tens of thousands of viewers every day.
Fortnite is like a mix of The Hunger Games, Minecraft and Lord of the Flies: 100 players drop down on an island and battle it out until only one player or team is left standing.
One superstar gamer, 19-year-old Ali “Myth” Kabbani, was signed by TSM early this year as the team’s Fortnite stud. The signing soon led to a $1.5 million investment by TSM: The team now leases a 4,300-square-foot house for its roster of four to live, practice and stream for hours a day. The seven-figure bet is already paying off. Kabbani has become the second-biggest star on Twitch, with 4.1 million followers, driving new fans to the TSM brand. That ever-growing audience helped bring about a new sponsorship from Chipotle, which sees TSM as a means to intersect with pop culture.
Though it’s undeniably a blockbuster game, there are still questions about Fortnite’s potential as an esport. And while the game’s creator, Epic Games, is offering $100 million for prize pools across a year of tournaments, it’s unclear how these competitions will be structured or even broadcast. But TSM and Dinh are used to leaps of faith.
From a working-class family of nine in Campbell, California, Dinh was a perennial C student in high school but found his calling after discovering the fledgling League of Legends in 2008, when he was 16. Playing under the name Reginald, he soon became the top-ranked player in the world and started his own team in 2009. He and his brother Dan decided to create community websites and author guides for the game. Long before ESPN and Amazon thought to broadcast League of Legends competitions, Dinh was hosting and streaming them.
TSM—short for Team SoloMid—is one of the most recognisable brands in esports. Its estimated revenue for 2017 stood at an impressive $21 million
Soon after, Dinh dropped out of college and borrowed $5,000 from his mother to invest in his vision. His gaming-guide site, solomid.net—named after his position in League of Legends— attracted millions of visitors, which meant Dinh was pocketing around $60,000 a month. In 2013, Dinh retired as a player at 21 to focus on his business, which still includes gaming sites.
Five years later, he remains hungry, taking aggressive new steps in the industry he helped pioneer. In July he received $37 million in series A funding from a group of investors that included the A-list venture capital firm Bessemer Ventures Partners, the Hall of Fame NFL quarterback Steve Young and the three-time NBA champion Steph Curry. “It only made sense to go with the best of the best,” says Curry, who plans to use his cachet to help TSM reach even more young men.
With the new capital, Dinh plans to double staff to 100 and use up to $15 million to build a 25,000-square-foot training facility and operational headquarters in Los Angeles next year. The new headquarters will generate revenue through sponsorships and fan events and serve as a base where players can train, influencers can create content and TSM can develop as a household name for a new generation—and much of this is well under way.
At TSM’s Fortnite game house, Myth Kabbani recalls watching TSM play when he was in middle school and realising esports was a realistic career goal. When the organisation reached out to talk about a partnership, he says, his heart started to beat out of his chest: “Joining TSM is less like joining an organisation and more like fighting crime with your favourite superhero.”
(This story appears in the 09 November, 2018 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)