Why Topgolf is putting esports lounges in its entertainment venues

Topgolf has built 52 venues where more than 17 million people a year use their driving ranges and other high-end entertainment. And in December, the company announced that it will create esports lounges at six of its outposts in partnership with TV brand TCL. It’s a big bet that such venues will be the next growth opportunity in the larger esports economy.

The company launched its first lounge at CES 2019, the big tech trade show in Las Vegas earlier this month, at its Topgolf Las Vegas location. The idea is to give gamers a place to come to watch esports entertainment in a lounge with wall-to-wall monitors, comfortable seating, and chef-driven food and beverages.

At Topgolf, fans can compete against each other, on their own or in exclusive events and leagues. It’s all part of Topgolf’s expansion into new kinds of entertainment. In 2016, Topgolf acquired World Golf Tour (WGT), an online game with millions of players. YuChiang Cheng, who headed WGT, is now president of Topgolf Media.

I recently talked with Cheng about why it makes sense for a place with a driving range and putting greens to expand into esports. To date, Topgolf has entertained more than 100 million people, and it is going to tap that network and expand beyond it, reaching out for gamers from all walks of life as esports goes mainstream.

TCL will add its 4K UHD 6-Series TVs for both individual and esports group gaming so guests can play esports games and participate in special events, coaching sessions, viewing parties and meet pro gamers. The Las Vegas is a natural one, as the Strip is already home to other gaming venues like Esports Arena, which has taken a space inside the Luxor Hotel and Casino.

Cheng said that the esports destination at Topgolf will be inclusive and welcoming, and more esports lounges will open at Topgolf venues in Austin, Texas; Charlotte, North Carolina; Houston-Katy, Texas; Minneapolis, Minnesota; and Scottsdale, Arizona.

Here’s an edited transcript of our interview.

Yuchiang Cheng: I’ve been at Topgolf for three years now. It’s a special company. We’ve gotten to do some special things.

GamesBeat: Where are you based?

Cheng: In San Francisco. Topgolf acquired WGT, and we got a new office here in San Francisco. We basically retained the whole team. It’s worked out well.

GamesBeat: The new thing seemed like it was not necessarily related to golf. It’s more like an esports outreach on your part. What’s the thinking behind that?

Cheng: When Topgolf acquired WGT, they realized that they didn’t want to just be a venue, a location-based business. They realized that the secret to Topgolf is that they use games to bring people together. It just happened to be a golf game, a driving range, at the time. Erik Anderson, the chairman, approached me and said, “We believe gaming is core to us. We believe we want to be more than a venue business.” That means content, game content, is really important to Topgolf.

He and I drew up the blueprints for what is now Topgolf Media today, where we’ve really gone beyond golf now. We throw about 100 concerts a year. We have all sorts of different types of games in Topgolf now, not just golf games. We have a lot of arcade games. We’re embracing console and mobile esports, as well as PC. We’ve embraced miniature golf. If you go to our small versions of Topgolf, Swing Suites, you can actually play baseball and football and hockey and zombie dodge ball and all sorts of stuff.

The thinking is just that—our secret is that we bring people together through gaming in a physical space. We do that well through hospitality and food and excitement.

GamesBeat: Esports has become more interesting. How did the popularity of esports come into your thinking? Just down the street, the Luxor has their big sign with the esports arena.

Cheng: It’s super cool. Vegas is becoming quite the hub for esports, which I find really invigorating to have nearby. It’s a fun town. Our thinking started with an insight internally, where we surveyed our guests. Close to a third of them said that they love esports – either they watch or participate or play on their own. At Topgolf our audience is actually pretty young. It’s mostly Gen Z and younger millennials. That’s the majority of our audience. Our research told us that they love esports.

So the question became, how do we continue to service and grow that audience? How do we keep them visiting our venues and stay relevant with a younger generation? Topgolf is relatively hip and cool already, but we want to continue to reinvent ourselves to stay relevant. Our theory is that, at the upper echelon, the top one percent, you’ll have the publishers and the big leagues – which are often owned by the publishers – holding events at arenas like the Staples Center. On the more democratized end, it’s all online. It’s Twitch and participating online with the community there. There seems to be this gap in the middle where there’s not a lot of local activation, not a lot of physical gatherings of esports players.

If you talk a lot of parents and kids, they tend to play at home right now, but a lot of the time, they want to get out. They play at home because there’s nowhere else to play, not because they only want to play at home. That’s the insight we grabbed. We wanted to solve a problem that a lot of game publishers, gamers, leagues, and sponsors have, which is that there’s no middle tier – a clean, well-lit environment that sponsors can participate in, that is easy and turnkey for game publishers and teams to activate in, and that’s easy for gamers to go to. That’s what we’re building.

We’re talking all 20,000 of our employees and we’re training them and putting in physical infrastructure for our venues in a way where will be the most efficient and easy place to host esports events. That’s our goal, to bring people together to play esports. We’ll have playbooks and operating procedures and the infrastructure for a team or a publisher to come in and do a “beat the pros” session, where the public could come in and play against a pro player. Or we’ll have infrastructure for doing esports 101 lessons and coaching sessions. Or launch parties or theme nights.

GamesBeat: In some ways this is an expansion to a new audience for you. It doesn’t sound like you care if it’s not really a golf audience, right?

Cheng: No, not at all.

GamesBeat: It’s just that if you like esports and you’re an existing customer, you’re welcome to get into this, but also, if you just like esports, this is a good place for you to go.

Cheng: That’s right. That’s what’s interesting about Topgolf. Less than 50 percent of the people who go to Topgolf today actually play golf. The majority of them have never hit a golf ball on green grass. We heavily overindex for social millennials. We heavily overindex for women compared to golf in general. We already have some esports audience, and now we want to expand that audience. We want to make it easy for publishers, teams, and sponsors to come and use our space.

We have scale. We’re doing six venues that are being decorated and branded with TCL, but we have another roughly 58 venues that will be ready to host events. You can take that to a game publisher that’s used to doing one-offs with venues, where they have to reinvent the wheel every time they host an esports event. With us, they can set the playbook once and then roll out to all 60-plus venues.

GamesBeat: Do you have a description of something that would likely be one of these experiences?

Cheng: Our sweet spot is somewhere between events that are 10 to 250 people. Our first one will be at CES with TCL in Las Vegas.

GamesBeat: You must be happy if Las Vegas does become this center for esports.

Cheng: Yeah, yeah. There’s plenty of space. It’s going to be a big industry. Vegas is an easy place for everyone to fly to. It makes sense.

GamesBeat: If people come to town for one event, they might veer off and go do this as well.

Cheng: For sure. They’re a very different space. The arena at Luxor is very competitive. It’s more male-oriented, I’d say. It looks like what you’d expect, a Matrix/Tron type of thing, and that’s super cool. But for us, we’re designing spaces that are more inclusive. You could take your daughter or wife and they’d feel like it’s fun. It’s comfortable.

We’re really embracing the more inclusive games that women like to play, and other minorities in the gaming audience. If you look at Fortnite and Rocket League and Clash, all of those overindex for women compared to more traditional esports. Those are the titles that we’ll gravitate toward. We believe that will broaden the whole industry, if we support a more inclusive approach.

GamesBeat: How do you try to overcome any confusion around the idea that everyone’s going there for golf?

Cheng: That’s been our challenge for a long time. It’s really through our actions. Our actions will speak to what audience we have permission to be working with. At first no one thought of us with any music association. They thought it was purely about golf. But now, after hosting hundreds of concerts and having a hit show, Who Will Rock You, that has more than 16 million views, people understand that Topgolf is more than just golf. It’s also music. Soon they’ll understand that we’re esports as well, that we’re committed to it and we’re going to do this for the long time. We’re going to earn people’s confidence that we’re in this for our good.

GamesBeat: Do you feel like you want to develop your own esports games, or is that not something you’d try?

Cheng: We kind of already do that with WGT. WGT is up to 16 million players. In the last virtual U.S. Open, which we’re going to start renaming—that was one of the original esports, right? We ran the WGT virtual U.S. Open tournament over eight years. Now we need to rebrand it and make it look and feel more like modern esports. But last year we had 350,000 participants in that tournament. We gave out a trip to the real U.S. Open and all sorts of other prizes. We’ll continue to invest in WGT as a professional golf platform.

GamesBeat: Do you have any kind of culture clash there with golf becoming an esport?

Cheng: I feel like esports is broadening. It used to be League of Legends and Counter-Strike. Now it’s broadening out. I think history will meet us in the middle. Sports like golf will become more acceptable as esports, and then esports itself will also broaden its own definitions. It’s just a matter of time. The macro trends are in our favor.

GamesBeat: Do you think some kind of advertising or marketing even signage might help you? Like I say, that big thing on top of the Luxor pyramid is hard to miss. Is there something along those lines you want to do to let people know that esports is happening there?

Cheng: We’re definitely doing more marketing activations for TCL and ourselves. Also, it’s been helpful to have MGM as a really big partner for ours. The Topgolf sign is all over the MGM Grand. We’ll definitely take advantage of that, use some of that signage to promote our esports offerings, especially the events and special things we’re going to do there.

GamesBeat: How many people are working at Topgolf altogether, the whole chain?

Cheng: We’re just about 20,000 people now, across—I think we’re at 62 locations right now. I’d have to check the exact number. We open one up about once a month, but I’m not quite sure if we opened one this month yet.

GamesBeat: How many of these esports installations will you be rolling out?

Cheng: Six of them will be branded with TCL. But all of the venues will have the infrastructure to host esports events.

GamesBeat: If you’re filling up a calendar, do you have some big events planned already, or things that are theoretically likely to fill that out?

Cheng: For sure. I’d like to tell you, but I can’t yet. [laughs] We have a bunch of partners and we’re about to do some announcements. The beauty of what we have compared to a lot of other companies trying to do this is we already get a lot of traffic into our venues. Not only will it be easy to host an esports event at our venue, because the staff knows how to run it, but we basically guarantee that people will show up. We’ll have close to 18 million visitors at Topgolf next year. To have some of those drop in—because they’re already in the venue, attracting them to an esports event is relatively easy for us.

I’m really big on bringing gamers together. It was important in my life. That’s how I met a lot of my friends. I’d love to work more on what we can do for the next generation.