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Video games meet the China Olympics
In Olympics-mad China, even video gaming - yes it's an official sport there - is being drawn into the competition. And a U.S. tech startup has won a gold.
NEW YORK (Fortune) -- Ted Owen, CEO of Santa Monica-based GGL Global Gaming (GGL), has told Fortune he has signed a deal to make video gaming an official welcome event of this summer's Beijing Olympics. A Chinese official confirms it.
Chinese organizers are allowing GGL to use a logo that includes the official Olympic rings for branding and promoting a big gaming tournament that coincides with the first four days of next summer's Olympics, to be called The Digital Games. The Games will not be in Beijing but in Shanghai, where Olympic soccer events will be held. As part of the events, GGL will employ a kind of World Cup format in the months leading up to the Olympics, with national playoffs leading to global competition in Shanghai.
GGL is a five-year-old Santa Monica-based startup that provides a variety of online services for gaming afficionados, but also organizes a growing array of live gaming events. The Digital Games will be the biggest yet.
While the Digital Games won't be a true Olympic event nor will they command anywhere near so much gravity, video gaming recently was declared an official sport by the Chinese government, alongside more physically demanding sports like soccer, pole-vaulting and water polo.
The Digital Games will be a promotion for gaming and pure entertainment, in addition to some real competition. Players will include sports and music celebrities like Snoop Dogg as well as both professional and amateur gamers competing in a variety of tournaments. Owen is even trying to recruit Olympic athletes to participate.
But for GGL, and apparently for China, video gaming is serious business. "This event will be heavily covered by the media," says Fong Hong, who is honorary general secretary of the China Internet Gaming Organizing Committee, editor of a large-circulation national technology newspaper called Netizen and an employee of the Chinese Ministry of Information Industries. If he says so, it is likely to be so.
Says a very optimistic Owen: "We believe the crowds we'll get will be far larger than for the Olympic games themselves." The venues, still to be chosen, are likely to be big soccer stadiums - not unusual for gaming competitions in China and elsewhere in Asia. Video gaming is rapidly becoming one of the world's most popular spectator sports, with audiences, especially in Asia, numbering many millions both live and on TV.
Owen says portentously that the Digital Games will be "the ultimate elevation of gaming and the culture of gaming to the world stage. We're associating ourselves with the largest mainstream brand in the world, which is the Olympics." Fong Hong doesn't disagree. "This is historic because it is the first time that video gaming becomes part of the whole Olympic celebration," he says in a telephone interview from Beijing. "In the long run, we hope that video gaming becomes a formal sport throughout the world. That is the long-term vision." Mr. Fong says that the government officially counts over 50 million serious video gamers in China alone.
This is a breakthrough for little GGL, which has about 100 employees. Though it is dwarfed by IGN, a big gaming and entertainment Web business owned by News Corp. (NWS, Fortune 500), Owen says GGL gets about 12 million unique visitors per month to its Web site. Owen says while IGN reviews games and hardware, GGL is "ESPN meets MySpace for video games." It connects players in social networks based on what games they play; it sets them up to play together; it delivers content to them in a variety of forms, supported by advertising; and it hosts live gaming events like the one in Shanghai. Members use all the major gaming consoles as well as PC.
GGL has been creative in developing online and live gaming properties. For example, it hosts the Hiphop Gaming League, with Snoop Dogg serving as "commissioner." MTV and BET have broadcast the finals the last two years. GGL has also organized a professional baseball gaming league in a joint venture with Major League Baseball. The Yankees' Johnny Damon is commissioner of that one. (Last year Dogg beat Damon in an online "battle of the commissioners".) This year GGL will host a virtual baseball season beginning in April, which will lead up to a virtual world series.
Owen helped run an investment banking firm during the dotcom bubble. GGL, which he started in 2003, is about break-even, he says. Owen hopes for an IPO by next year.
Regarding the Olympics deal, I ask him the inevitable question: Isn't video gaming rather non-athletic?
But he unreels a rapid-fire series of comebacks:
- "This involves hand/eye coordination in the extreme. The best guys train eight hours a day."
- "You burn more calories playing 20 minutes of boxing on the Wii than in a 20-minute jog."
- "Do you get more obese playing video games or watching football on TV?"
I give up. This guy is a classic entrepreneur. No arguing with him. But why bother? He's winning. 
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