There is a lot of money in Formula One.
Its budget is around £2 billion per year.
The highest paid driver, Sebastian Vettel, gets a $60m salary. And that’s before his product endorsements and other sponsorships are taken into account.
Given that there is so much money on the line, you can be certain that every F1 driver has gone through decades of training.
They have had to work their way up through the lower ranks, winning at go-karting as kids and progressing from there.
It is almost impossible to get into F1 without a huge amount of money, a huge amount of talent and more than a little luck.
Those that make it are arguably the best drivers on the planet.
Which is why what Italian-born Enzo Bonito did last month is so shocking.
The 23-year old beat former F1 driver Lucas di Grassi at the annual Race of Champions (ROC).
Di Grassi may not be in F1 any more, but he’s no slouch. He won the Formula E championship in 2016/17 and is still an active racer.
Then the next day, Bonito beat three-time Indy 500 winner Ryan Hunter-Reay.
Those wins may not sound all that historic until you learn that Bonito was never trained as a professional racer. He got his skills playing computer games.
“Within a decade we will see an F1 champion who came from esports and not go-karting”
Unlike most esports, racing games translate to real-life racing aptitude. The games are programed to simulate real-life racing exactly. And most serious players use a steering wheel and pedals to play.
Racing teams are taking notice of these esports stars and investing real money to get them into real races.
From The Guardian:
McLaren are investing a lot of time, effort and money in esports. Bonito is part of their team, along with Rudy van Buren, who won three races at last year’s RoC, in Riyadh. Van Buren was working as a kitchen salesman when he won McLaren’s World’s Fastest Gamer competition, which earned him a year-long job as their simulator driver. Later this year, Payne [director of esports at McLaren] says Van Buren will probably make the switch from being a virtual racing driver to a real racing driver.
“If you or I are amazing at Fifa, that doesn’t mean we’re going to grace the FA Cup final any time soon and the same is true for most esports,” Payne says. “Just because you’re good at NBA2K doesn’t mean you’re going to get to play for the Boston Celtics. But sim racing is different. The skills are all so transferable. These guys know the tracks and they know the cars, they know the braking points, the gear changes, the apex points. They’ve spent as much time training how to race these cars in the virtual world as anybody else has in the real world. And that’s why they are taking names at RoC.”
McLaren chose its drivers from an online competition that drew over 500,000 entries.
The seven finalists of this esports competition were then taken to Top Gear’s test track in Dunsfold to compete for real.
One of the seven had never even driven a real sports car before, and doesn’t even follow real-life racing.
But based on the racing data from that day, McLaren’s analysts calculated the esports stars were racing at a similar level to F3 drivers.
The main difference between the simulation and the real racing is the danger element.
“When we put these guys in the cars they aren’t showing any fear because they know what they are doing. They’ve done thousands of laps on these tracks. I think they should be scared, we all think they should be scared, but they have such confidence in their ability,” says Payne.
And it’s not just McLaren’s esports director that is excited about the crossovers from sim racers to actual racers.
McLaren CEO Zak Brown believes that within the next decade we will see an F1 champion who came from esports and not go-karting.
Real racers are competing in esports tournaments in front of millions of viewers
But it’s not just esports starts going into real racing. Real racers are competing in esports tournaments, too.
As Motorsport.com says:
iRacing, the sequel to NASCAR 2003, created a competitive infrastructure which has a strong base of drivers. They have just announced a $100k prize pool for 2019. rFactor 2 with its dynamic platform, perfect for endurance racing also was used for the $1million Visa Vegas eRace by Formula E – the largest prize pool in sim racing history. Importantly, the Visa Vegas eRace put the pro drivers from the series in the race as well – the money was not to be sniffed at, even if you are an established racing driver, for instance Mahindra’s Indycar-bound Felix Rosenquist took home $100k and looked quite happy about it!
Given that these esports racing finals regularly have a viewership in the millions, it’s easy to see why real racing teams want in on the action.
More from Motorsport.com:
Nearly every automotive and motor racing series is looking at esports. Porsche want to help develop the eco-system, McLaren are developing their Shadow project, ACO have started their Le Mans Esport series in conjunction with the Motorsport Network, WRC have a world champion, NASCAR are creating a series called eNASCAR Heat Pro League with 704Games, and Blancpain have their own title with Assetto Corsa Competizione.
This is just a snapshot of what’s upcoming with plenty more series involved, creating huge diversity coupled with a huge opportunity.
If we are to believe McLaren’s CEO, it is a matter of when, not if an F1 champion will come from esports.
Why should you care about this as an investor?
Well, when that happens. Or when an esports player becomes a champion in any racing discipline – from rally to touring to NASCAR – we can expect the popularity of racing simulator games to explode.
Game makers, console makers, and in-particular the companies that make the steering wheel and pedal controllers could see a massive influx of money.
If you want to find out the best way to invest in these areas, you need to read my colleague Eoin Treacy’s Frontier Tech Investor service. He has a number of very smart plays to take advantage of esport’s growing popularity. You can get a trial to Frontier Tech Investor here.
Imagine growing up as a talented kid, knowing you’ll never have the money to get into racing the traditional route. But also knowing you have more than enough talent to make it, if you did have the money.
It would be crushing, and there must be thousands out there in that situation.
All it takes is for one of those kids to make it on the main stage and it will change the world of racing forever.
Until next time,
Editor, Exponential Investor