A $30 million video game arena near McCormick Place is empty, and another event location attached to a college dorm isn’t paying off either.
Two esports arenas in downtown Chicago that were planned for thousands of esports fans will not exist after all. Developer Scott Greenberg has abandoned the $30 million gaming arena, reports the Chicago Sun-Times. The prospects for Urban Resolve’s planned video game center, which is adjacent to a student residence, are also quite poor.
Fast money with esports?
According to the construction company, the 108,000-square-foot esports arena near McCormick Place, approved in 2021, failed due to changing market conditions. Originally a two-story, 1,040-seat arena was planned, which has provided a new business niche in Chicago with many new workplaces and public spaces.
Greenberg and Chris Lai, co-CEOs of Chicago-based Smash Interactive, planned a large space and wall-sized LED screens for tournaments, touted as a unique experience for commercial and community events.
To top it off, the Illinois Institute of Technology had promised to impart knowledge in game design. “This is something that can change the world,” Greenberg declared in 2021. Then reality in the virtual economy struck. The arena’s top financiers — game publishers, the dominant figures in an industry with complex economies — got cold feet, according to Greenberg, who also runs ECD and SMASHotels.
Reality has intruded on plans for esports gaming centers in and near Chicago's downtown, including a $30M pitch on Wabash Avenue near McCormick Place. https://t.co/xYQ3b4TY6A
— ABC 7 Chicago (@ABC7Chicago) February 27, 2023
Is the gaming industry a tough place?
It’s difficult to commercialize an activity that you can normally do from home and for free. You won’t get rich from esports events either, as you can’t charge high prices for the tickets, and the merchandise sales are said to be disappointing.
Venture lending sponsors have also become wary of funding revenue growth without profits, and the crypto crash has dried up a major source of capital, analysts say. Greenberg has said that maybe someday there will be a market for collaborative gaming, “but probably not on the scale I’ve been talking about.”
A nonprofit partnership led by Urban Resolve had sought city incentives — including a public takeover through expropriation — to convert the ground floor of the 1.5 million square foot building into an esports hub topped by student housing.
Cboe Global Markets plans to sell the Chicago Board Options Exchange building but has not listed it yet, according to a spokeswoman. The market value is $58.6 million, but insiders believe it will sell for a lot less, perhaps to someone who would build a data center in the Central Loop.
Header: Chait Goli / Pexels
