In 1972, Stanford University's Artificial Intelligence Lab in Los Altos, California, held what is widely recognised as the world's first video game tournament.

Key points: Esports is tipped to become a billion-dollar industry in 2019

Esports is tipped to become a billion-dollar industry in 2019 Millions of people tune in to watch competitions via streaming services

Millions of people tune in to watch competitions via streaming services Prize pools in some tournaments are bigger than in conventional sports

It was just one of a handful of places equipped with hardware sophisticated enough to run the sci-fi combat game Spacewar.

The lucky winner — computer scientist Bruce Baumgart — took home a yearly subscription to Rolling Stone Magazine.

Fast forward nearly 50 years, and a 19-year-old from Melbourne last month won a staggering $4.62 million at The International, the world championships for the strategy game Dota 2 — a bigger cash prize than Novak Djokovic won for taking out this year's Australian Open.

Few back in 1972 could have predicted the transformation of competitive gaming into the lucrative spectator sport that it is today.

Melbourne teenager Anathan Pham, second from the left, celebrates with OG after their win at The International. ( Reuters: Aly Song )

Now vying to be recognised alongside conventional sports, esports are quickly shaking off perceptions that video games are child's play.

Parents chiding their kids' video game ambitions might want to keep reading, because the gamer kids of today are fast becoming the multi-millionaire esports superstars of tomorrow.

'Bigger than Hollywood and the music industry combined'

Players at the Melbourne Esports Open last weekend were competing for thousands of dollars. ( Supplied: Melbourne Esports Open )

On the last weekend of August, 17,000 esports fans descended on Rod Laver Arena for the second Melbourne Esports Open (MEO).

The home of the Australian Open was instead now playing host to two major esporting competitions over two days, along with dozens of other smaller tournaments and exhibitions.

"You open the door and you get hit by a wave of sound," sports lawyer Mat Jessep told the ABC.

"There's commentators, you're seeing teams at an elite level competing against each other, lights, lasers and sometimes fireworks."

Jostling for a place amongst the crowd, one could easily be fooled into thinking they were stumbling into a boxing bout or a rock concert.

Thousands of people attend esports events — and many more stream them online. ( supplied: Melbourne Esports Open )

Wedding DJ-turned-professional esports commentator Ben Green said the spectacle of modern esports was indistinguishable from conventional sport.

"If you sit in the arena, it feels like sports, it's the same feeling inside as if you're watching the NRL, AFL, anything like that," he said.

And across the world thousands, sometimes even millions of people are tuning in to watch esports events via streaming services like Twitch — and that's attracted lucrative sponsorship money and growing prize-pools for winners.

"Even this weekend, we're talking about hundreds of thousands of dollars across all of the tournaments and that's just for Australian competitions alone," Mr Green said.

But that pales in comparison to the prize money dished out overseas. Australian-born winner Anathan Pham's victory came at the world's richest esports tournament, The International.

The contest draws more viewers than the US Super Bowl, and this year had a prize pool of $US30 million ($44 million).

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While esports is set to surpass an annual revenue of $US1 billion ($1.47 billion) for the first time this year, Mads Brown from esports company Fortress Australia said the gaming industry overall was bigger than Hollywood and the music industry.

"Gaming has a higher revenue than both of those combined for almost the last 10 years now. It's massive," she said.

Sponsorships, trainers, nutritionists and big bonuses

Overwatch players, led by Corey Nigra from the team Washington Justice, walk on stage at Rod Laver Arena. ( supplied: Melbourne Esports Open )

Blizzard Entertainment's first-person shooter Overwatch is a major competitive game, with leagues all around the world.

While the MEO was playing host to Australia's Overwatch Contenders final, the Overwatch League, with 20 teams from six countries, is the world's most elite.

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Players in that league are contracted and given salaries, sponsorships and bonuses — there's even a regular seasoned fixture.

Corey Nigra, 21, plays for the Overwatch League team Washington Justice, and was at the MEO for an exhibition match against this year's Contenders winner, ORDER.

"I wasn't really taking it too seriously in the first two seasons of Overwatch — but on my third season is when I got kind of scouted, that's where I fell in love with the game," he told the ABC.

The Overwatch League has a base salary of $US50,000 ($73,400), but players can expect to win more in bonuses and sponsorship deals.

They can also expect plenty of fame.

Overwatch League teams like Washington Justice are celebrities in the world of esports. ( Supplied: Melbourne Esports Open )

Fans lined up in droves to get Nigra's autograph at a pre-arranged signing session inside Rod Laver Arena.

"It's like a dream come true and it's something that you have to keep reminding yourself, this is real," he said.

While he's having fun now, being an elite esports player can also be gruelling, with players sticking to training regimens not unlike those in conventional sports.

"These people who are the best at what they do, train day in and day out," Ms Brown said.

"They do a lot of drills, strategy sessions with coaches, they have fitness trainers and nutritionists."

'Aiming with a keyboard' — but is it a 'real' sport?

Highly-developed fine motor skills are required in elite-level esports. ( Reuters: Jasen Vinlove )

There's an emerging debate about how exactly esports fit into the spectrum of sports more broadly.

Esports are earmarked to be included in the 2022 Asian Games, and are fast pushing to be considered alongside other sports in major competitions.

"You think about any traditional sports such as boxing or soccer, it's about big muscle groups … But you also have this other system called fine motor skills," Dr Steven Conway, a senior lecturer in gaming and interactivity at Swinburne University, told the ABC.

When watching a video game being played, it can be difficult to understand just how complex a player's movements are.

In some games, elite players are making 400 actions per minute, or 400 separate decisions or clicks.

"You're aiming with a keyboard and mouse, and you've got to click one pixel amongst millions within point-one of a second and you've got to do that hundreds of times a minute," Dr Conway said.

"That is an extraordinarily difficult feat to accomplish."

But the debate about how to define esports fades into irrelevance when you consider what the industry has achieved, even without being acknowledged as "a proper sport".

And most fans don't seem to care either way.

The spectacle of esports is quickly gaining on what conventional sports give their audiences. ( Supplied: Melbourne Esports Open )

"There's something really electrifying about seeing the best in the world battle it out in the arena, and doing something that the average person could never even dream of doing," Ms Brown said.

The sheer volume of money, the grand and global spectacle, and the professionalisation of the teams mean esports will play on with or without wider recognition.

The players are elite and the fans are devoted. Whichever way you look at it, esports are more than a game.