Esports Cafés, Asian Tech: Chinatown Owner Games Out Retail's Future
It’s 2.30pm on a Thursday in May, and the SideQuest esports café in London’s Chinatown is doing a remarkably brisk trade. Outside, it is one of the first warm and sunny days of the year, but inside, gamers stare intently at screens, curse unseen opponents, or just hang out and talk strategy.
Many of the customers were still lingering after the Genshin Impact University Invitational UK Tournament earlier in the day, SideQuest Meta Marketing Manager Michael Mulholland said of the crowd, which included a diverse mix of ages, genders and ethnicities. Evenings are the busiest periods for the venue, but a tournament for a popular game pulls in the punters at almost any time of day.
It’s the kind of draw retailers and retail property owners love.
Chinatown is best known for its restaurants, but Shaftesbury, the largest property owner in the area, has been looking to diversify its experiential and retail offering, too. It has brought in Asian brands like SideQuest and gaming hardware retailer Razer to create an offering that maintains and expands the area's Asian heritage while capitalising on tech innovation coming out of China.
Opening one of its first European locations in Chinatown came naturally for Asia’s largest gaming café operator — called Wanyoo in its home territory of China and here as well until a UK rebrand as SideQuest earlier this year. It now has six UK outposts and plans more than 10 more over the next few years.
The expansion also made sense for Shaftesbury, which owns 43 shops, 97 restaurants, 163 apartments and 38 offices totalling 421K SF over a 3.2-acre area in Chinatown. The portfolio was valued at £731M in May and produces annual income of £27M.
The retail evolution is not just a "nice to have" for Shaftesbury. It is vital to selling Chinatown to a broad demographic as the area and the wider West End recover from the pandemic. Chinatown, like the West End more generally, could once rely on a potent mix of office workers, tourists and Londoners seeking a night out to keep footfall healthy. But the pandemic saw almost all of these groups wither away dramatically.
Shaftesbury’s portfolio has recovered well following the last spike in Covid-19 cases brought on by the omicron variant. Its hospitality and leisure tenants were trading 9% above pre-pandemic levels as of March this year, the company said in its half-year results, and its retail tenants were trading 4% ahead of 2019.
At the same time, it warned the inflationary pressure affecting consumers was likely to impact the discretionary spending its tenants rely on.
For that reason the company is constantly looking to innovate with tenant lineup.
“The gaming and tech industries are huge retail categories in the Far East, and both Razer and Wanyoo — that latter rebranding in the UK as SideQuest — are two of the biggest players there,” Shaftesbury Retail Director Samantha Bain-Mollison told Bisnow.
Bain-Mollison said the company tries to “respect tradition and trends in equal measure." With esports and gaming representing a huge global phenomenon and new trends coming from Asia in particular, it made sense to target brands like SideQuest and Razer to tap into demand for new products and experiences in London.
For Razer Senior Director of Global Retail Experience Christine Cherel, opening the gaming retailer's first European store in Chinatown in 2019 was less about being among other Asian brands and more about clustering near other international tech brands. Razer offers premium retail space on the ground floor and an arena where customers can play downstairs as well.
“It’s close to multiple major tourist attractions, right next to the premium shopping of Covent Garden, but also in amongst the eclectic mix of brands in Soho, and not far from the retail outlets of other premium IT companies,” she told Bisnow.
Razer's flagship London store, the brand's largest, is located a few doors down from SideQuest on Charing Cross Road — very much a deliberate strategy, Shaftesbury’s Bain-Mollison said, since Razer sells the kind of equipment that SideQuest’s gaming devotees would have at home.
For those not au fait with gaming culture, the thought that has gone into product creation serves as a guide to how seriously its aficionados take the pursuit. From mouse to keyboard, equipment is ergonomically designed for different kinds of games. Headphones are designed to not only block the world outside, but to vibrate in sync with the game being played and make the experience more immersive.
Players are willing to pay big prices for this equipment. Top-of-the-range gaming laptops go for £4,199, and even a mouse can set a devotee back £169.
The growth of esports in recent years has been just as precipitous.
Revenue from the market was estimated at $2B in 2021 and that figure is set to grow by 21% a year to $13B by 2030, a report from Grand View Research said. Wanyoo alone has 1,300 esports venues across Asia, and just one esports tournament, The International had a prize pool of $40M for players in 2021. For context, the prize pool for the U.S. Masters golf tournament in April this year was $15M.
“People of all ages love gaming, and this forms a large part of the worldwide rush towards competitive socialising,” SideQuest UK CEO Zhaorong Chen said in December last year at the announcement of a new UK site at Lendlease’s Elephant Park in south London.
SideQuest customers can take a membership or hire a single computer or private rooms that are configured in different ways for different groups — an esports squad playing in a tournament has different needs to one that is training, or a group of mates that want to play against each other. Food is available on-site.
Whatever the type of player, they need the right infrastructure, and Mulholland said venues have to be located in areas with the fastest possible broadband, in order to reduce latency for gamers — a slow-running computer might mean the difference between death or glory in the digital world.
The site must also have the right mix of tenants and customer base, Mulholland said, something the international nature of the Chinatown location clearly offers.
“What we are doing with SideQuest is a new concept in the UK, but stems from a model that is extremely strong in the Asian market," he said. "We see that in our community, that has continued to support us since opening in the UK.”