D&H Distributing: eSports A Slam Dunk For Partners

‘We spend a lot of time educating resellers on what it takes to create an eSports lab,” D&H Co-President Dan Schwab tells CRN. ‘It’s the full solution. It’s not just the gaming PC. We explain who the decision-makers are, walk through some of the technology opportunities.’

D&H Distributing has launched an eSports division to help solution providers find customers and build out computer gaming arenas to capitalize on the explosion in the market .

The Harrisburg, Pa.-based based distributor’s co-president, Dan Schwab, told CRN that solution providers can no longer afford to ignore the opportunity, which with events like the Overwatch World Cup and Fortnite World Cup coming this year, is only expected to get bigger.

“We spend a lot of time educating resellers on what it takes to create an eSports lab,” Schwab told CRN. “It’s the full solution. It’s not just the gaming PC. We explain who the decision-makers are, walk through some of the technology opportunities. We help them from a design standpoint, we work with architects on design, because that’s a key component. Really, from soup to nuts, we start having conversations with them about building a business practice.”

Schwab said eSports pulls together high-speed processing and video cards, video walls and large-scale signage, sophisticated gaming headsets, power solutions, networking products and even furniture to help give gamers an edge. D&H wants to connect college teams with trusted solution providers and MSPs to create facilities like the one it built for Harrisburg University.

D&H partnered with Harrisburg University to build that school’s eSports facility at the Whitaker Center in 2017. The school’s eSports team, Storm, went on to win the 2019 ESPN Collegiate eSports Overwatch Championship this spring.

“We found out they wanted to launch an eSports team so we thought we could partner with them, and they have this grandiose goal of being the ‘Fenway Park of eSports,’” Schwab said.

The school took over an IMAX arena for its gaming location, he said. D&H then leveraged its relationship with HP Inc. and Intel to build out the spot and the school gave away at least eight full scholarships for students who won a spot on the team.

“Not to build or design, but to play video games,” Schwab said. “And they have a full-time video game coach. It is a national phenomenon with a demographic that is only going to grow.”

Marc Netka, owner of STS Education, a solution provider in Westlake Village, Calif., that primarily serves the K-12 market, said eSports is a big revenue opportunity and a great way to break the ice with a potential customer.

“It gives me a great conversation starter with people who might not otherwise want to speak with me at schools,” he said. “Especially principals at high schools. I can educate them about eSports, and that obviously leads to the opportunity to sell some machines that have better margins than a lot of the low-end student devices they’re using currently.”

The faster refresh cycle on high-end gaming devices also creates annuity opportunities. He said most teams will want their graphic card replaced every 18 to 24 months, so he is bundling, eSports-as-a-Service packages that include hardware, software, even furniture as a way to drive recurring revenue and keep down costs for schools. But in the budget-stressed public school system, he said gaming alone may not be enough of a selling point.

“The likelihood is that there will be resistance to spending so much money on so few kids,” he said. “My counter to that is No. 1, let’s make this a high-performance computing lab. It doesn’t have to be just eSports. It can also be digital video editing, CAD, high-end computing. We can use it as a multipurpose computer lab—it just also happens to be a gaming arena.”

He said during the recent National Association of Collegiate eSports conference one vendor relayed an anecdote that there were 180 replies to an email sent by one school to gauge interest in an eSports program. Of them, 140 were from students who were not otherwise enrolled in any other school activity.

“It’s reaching a segment of the school population that is not currently involved in school programs,” he said. “For me, eSports is about the kids in the back of the room. The kids who are disenfranchised by school. … There are nongaming, noncompetitive reasons to have eSports at your school.”

According to Blizzard, the video game company that makes Overwatch, the Overwatch League kicked off its 2019 season in February with 13 million global viewers in its opening week, a 30 percent increase in viewership year over year.

Schwab said eSports viewership, between live television and streaming services, is rivaling the NFL in terms of numbers, which should be an motivator for solution providers to get in the game.

“So all those data points are leading to the market opportunity,” he said. “I’m not a prognosticator. It’s obvious that it is only growing and it’s one of the fastest-growing segments.”