Tribalism has long been the backbone of sports, with fans embracing teams that represent their communities. Now, owners and investors behind teams in three nascent videogame leagues are banking on people forming similar bonds by attending matches in their home markets.

The rise of city-based esports leagues supports a growing bet that publishers such as Activision Blizzard Inc. can entice people to shell out cash to see star gamers compete locally—and more frequently than tournaments with large prize pools.

...