Hard question, but probably no. First, I don't think a "youtube for games" will succeed, at least I wouldn't use it, but people keeps watching sports life/on TV and I find it quite boring so maybe in 5/10 years there are more pople watching the Final match of the Unreal Tournament World Series than the Superbowl.
Second, $500k seems a way too much! I believe it's better to start small but be ready to scale. And more for a risky business like that.
So, I wouldn't give him $500K, $25K to $50K yes but no more, at least until they have a public site and need the money to grow.
