Can Online Gaming Be The Next Pro Sport? Believe it or not, game geeks have adoring fans.
By Ed Brown

(FORTUNE Magazine) – Two kids are sitting on a stage at the 1998 Electronic Entertainment Expo (E3) in Atlanta, playing the enormously popular online videogame Quake II. Roughly 150 spectators--slack-jawed, bug-eyed, heads swiveled heavenward--are watching the action on four large monitors mounted above. Suddenly Daniel "Rosco" Alires corners his opponent Boniface "Kuin" Danan and demolishes him with a rocket, upping the score to two-zip. The crowd roars in appreciation. "Oooh!" cries the announcer, who's sporting a ring through his pierced eyebrow. "That one hurt."

If you choose to view this as nothing more than two kids playing a videogame in cyberspace, the scene might seem a bit absurd. But the crowd gathered here knows this is serious business, that Kuin and Rosco are highly polished, semi-professional athletes--hey, these kids are sweating as they fire their rail guns with the taptaptaptaptap of their mice--duking it out for a $7,500 winner's check, an AMD K-6-2 computer, a Thriller 3D graphics card from Hercules (Rendition V2200-based), 128 megabytes of synchronous memory from MGV Memory, a U.S. Robotics 56K modem, a Logitech mouse, an Advent Powered Partners AV390PL sound system, and the right to be called the best Quake II player in the whole world. This is no pickup game. This is the final match of the Advent Championships of the AMD Professional Gamers' League (PGL), the online gaming industry's answer to the NBA.

The PGL was launched last November by the Total Entertainment Network (TEN), a San Francisco online gaming service. To get here, Rosco and Kuin fought through a qualifying field of 1,500 Quake II fanatics. A fully automated ranking system tracked the approximately 30,000 matches that this group played against one another on the Internet over the course of a month, winnowing the field to 128. Only the eight players who then survived four rounds of single-elimination competition were invited to the finals at E3.

When this three-month season ends, another will begin almost immediately, offering PGL players--who pay a $9.95 entry fee if they're not TEN members--intense year-round competition and the remote prospect of actually making a living by playing videogames. Thanks in part to an endorsement deal with Microsoft, in the past year Dennis "Thresh" Fong, 21, the league's Michael Jordan, has made almost $100,000 and won a Ferrari. (In Atlanta he participated in the team competition. His agent, Peter Kim, explains that Thresh decided to take a break from the rigors of one-on-one play this season.) Soon the PGL plans to have a dozen players like him competing in matches televised on a cable TV channel like ESPN2.

An ambitious plan, to be sure, but one some analysts believe feasible. According to Forrester Research in Cambridge, Mass., the $170-million-a-year online gaming business will mushroom to $2 billion within five years. Why? While online games aren't going to put Nintendo out of business anytime soon, they have a couple of big advantages over traditional videogames, a $4 billion market. First, there's the thrill of live competition. After all, with a Sony PlayStation or an arcade game, you're usually matching wits with a computer chip. Online, you "face off" against a human.

Then there are the dozens of online gaming services run by companies from small outfits like TEN to Microsoft. These online communities offer their members virtual competitions--most more laid-back than the PGL. But perhaps the most important part of these sites are the chat rooms, where a player can connect with others who speak his--it's almost never her--language. Imagine what it would be like to run next door and shout to your neighbor, "YO, DUDE! I JUST SCORED A MAAAJOR FRAG," after you've killed a Quake II opponent, and you get an idea how important this is.

Right now, there's little consensus about who should be paying for these sites--the gamers or the advertisers. Microsoft's 1.2-million-member Internet Gaming Zone is one of several advertising-based sites that lure visitors with free games. Others, like TEN--which charges $19.95 a month--rely heavily on subscriptions, boasting that their exclusive games and high-speed connections are worth paying for. Still other sites offer a potpourri of pay-for-play options. "Revenue models are the industry's big issue right now," says Forrester analyst Seema Williams.

Despite this conundrum, when you see Rosco's fans mob him after he takes the PGL championship, it's hard to disagree with Williams and the other analysts who see a bright future for the online game biz. It's even harder once you speak to Rosco. In a post-game interview, he tells FORTUNE that to prepare himself for the finals, he played Quake II for up to seven hours a day during his just-completed freshman year at Butte College in California. "I practice every day," he says. "You miss a day, and you're toast."

A little unhealthy, perhaps. But since when has an unhealthy customer addiction been bad for business?