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Esports Is Filling The Programming Void

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The coronavirus has wreaked havoc with live sports programming and sports fans everywhere. Television networks are scrambling to fill the programming void without basketball, baseball, hockey, soccer and other live sports. To fill the programming void (but not the ad revenue void), ESPN, Fox Sports and other networks have been airing replays, sports-themed movies, documentaries and esports. Esports is competitive video gaming, usually played by professional gamers and watched by spectators.

 

Esports on TV | 

Although esports is primarily available for viewing online, televising live esports is not new. Over the past five years, a number of cable and broadcast networks have televised esports, including ESPN2, ESPNU, ESPN Deportes, DisneyXD. The NFL Network, TBS, CW and even CBS. In July 2017, CBS televised Candy Crush Saga in prime time and averaged four million viewers.

 

In recent weeks, more esports contests have been appearing on television. ESPN created a branded ESPN Esports Day which included 12 hours of programming on April 5. Included in the programming were televised virtual games from Madden NFL20, Formula 1 Esports Virtual Grand Prix, Rocket League (which combines soccer with rocket-powered cars) and the opening round of a 16-team NBA 2K20 tournament event. For the NBA 2K20 tournament, players included NBA stars (and video game aficionados) Kevin Durant, Donovan Mitchell (both recovering from the coronavirus), Trae Young and the tournament winner, Devin Booker. Booker won $100,000 to be donated to coronavirus relief efforts.

 

Fox Sports has also been televising esports on their networks, including a Madden 20 tournament featuring former quarterback Michael Vick and other NFL players. Derwin James, a safety on the Los Angeles Chargers, won the eight-player tournament, defeating Vick in the championship game. FS1 also televised an eNASCAR pro Invitational iRacing Series that averaged an impressive 903,000 viewers. Up next on Fox Sports is the inaugural eMLS Tournament.

 

Esports Online | 

With the coronavirus and persons quarantined, esports has been flourishing online. As reported by StreamLabs and Stream Hatchet, Twitch, YouTube and Facebook all reported significant increases with online viewing in first quarter 2020. As an example, Amazon’s Twitch reached a record high 3.1 billion hours watched, up 17% from the previous quarter. Twitch also reported a 33% growth in unique channels and record high in average concurrent viewing with 1.4 million.

 

In first quarter 2020, YouTube reported 1.1 billion hours watched, an increase of 13% when compared to fourth quarter 2019. YouTube also reported a record high 500,000 concurrent viewers during the quarter. Facebook Gaming also had a strong quarter, reaching 554 million hours. This growth in gaming was validated by Verizon, which reported that, since the quarantine, video game usage in the U.S during peak hours grew by 75%. By comparison, overall web traffic was up by 20%, video streaming usage increased by 12% and social media usage was flat. Twitter said conversations about esports grew by 71% during the second half of March (when the coronavirus pandemic impacted live TV sports), compared to the first two weeks of the month.

 

Revenue | 

Esports’ popularity has been on the upswing for years. According to NewZoo’s latest Global esports Market Report from February 2020, global revenue will reach $1.1 billion in 2020 with China the largest market ($385 million). This is an increase of 15.7% from 2019 and more than double the revenue of 2016. NewZoo projects revenue to surpass $1.5 billion in 2023. Sponsorship is the largest revenue source, contributing 58% to the total, followed by media rights at 17% and merchandise/ticket sales at 11%.

 

Audience |

Globally, the awareness of esports has also grown substantially. In 2020, 1.955 billion people were aware of esports, compare to 1.1 billion in 2016. The esports audience will reach 495 million worldwide in 2020, with 223 million defined as frequent viewers/enthusiasts and 272 million occasional viewers. This is a sizeable increase from 2016, when there were 121 million frequent viewers/enthusiasts and 160 million occasional viewers. Its projected by 2022 there will be close to 300 million frequent viewers/enthusiasts to esports.  

 

A McKinsey report said in the U.S., there are over 20 million esports fans, 83% are male and 84% are younger than 35. Among U.S. men under age 25, 38% are esports fans and on average watch nearly one hour of esports each day. Furthermore, 10% of esports fans report watching over 20 hours per week, although only 13% responded that esports is the only sport they watch. Among 18-34 viewers, the League of Legends is now the third most popular professional sports league after the NBA and NFL.

 

Video gamers between the ages of 18-25 spend 77% more time watching other players online than watching broadcast sports. A Nielsen analysis found over 60% of esports fans on Twitch do not watch linear TV on a weekly basis at all and half don’t have a paid TV subscription. The people in this age group are among the lightest viewers of television, are heavy users of streaming content, grew up playing video games and are a popular demographic to target among advertisers.

 

Advertisers | 

Since esports has a desirable viewing demographic and is growing in popularity, more “blue-chip” advertisers are sponsoring events. There are many opportunities and strategies for esports sponsorships. Nielsen reports sponsorships can range from on-air signage and branded content to digital overlays and apparel. Esports has evolved from experiential marketing for numerous advertisers. Many product categories targeting young males sponsor esports. The list includes soft drinks, quick service restaurants, consumer electronics, automotive, apparel, financial services, telecom and insurance companies. eMarketer projects ad revenue for eSports will reach $214 million in 2020, a 20% increase from $178 million in 2019.

 

Gambling | 

With live sports on hold, casinos, which would have booked hundreds of millions of dollars with live sporting events are looking at esports to recapture some of the lost revenue. In April,  Nevada Gaming Control permitted wagering on multiple esports events. This could popularize esports even more. Sports gambling has now been legalized in 17 states.

 

The coronavirus is expected to quicken trends already happening in the entertainment and sports industry. For example, consumers could subscribe to more streaming video content bolstered by several new launches. Cash-strapped consumers could accelerate cord-cutting. Studios could release movies in theaters and for at-home viewing simultaneously. Some newspapers may entirely forego printed editions and produce only online content. To this list you can also add broadcasters, who may add more esports to their programming lineups in order to reach a coveted younger audience”

 

eSports Volatility

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Are Esports Stocks Immune to the COVID-19 Crisis as They Outperform the Market?

 

“Since the novel coronavirus disease (COVID-19) first emerged in Wuhan, China, in December last year, it rapidly spread globally, with currently roughly 1.8M confirmed cases in 213 countries (as of April 14). In an effort to slow down the spread, most countries released policies restricting social contacts and urging people to stay home if possible. In the wake of public life grinding to a halt, esports and gaming experienced a rapid rise in popularity as many are looking for entertainment. The second half of March saw gaming conversation volume jump 71% in comparison to the first two weeks, according to numbers released by Twitter.

Nevertheless, the esports and gaming industry isn’t immune to the economic symptoms companies worldwide are currently experiencing. No previous infectious disease outbreak (including the Spanish Flu outbreak in 1918 and 1920) has impacted the stock markets as significantly as the current pandemic due to the policy responses by most governments. In this article, we’re going to look at those companies in the esports ecosystem that are publicly traded and compare them to the general market.

Up to now, the U.S. stock market index Dow Jones Industrial Average lost 34.85% at the provisional peak of the current economic crisis. While the index only represents 30 large stock exchange-listed companies, the ongoing situation is affecting all types of businesses directly or indirectly. In the esports ecosystem, three major trends emerged as companies are trying to adapt to the current circumstances.

 

Trend 1- Cutting Costs

Several esports companies announced that they took measurements to cut costs of operations to counteract the loss of revenues. Team Reciprocity, which is currently looking to perform a reverse takeover (RTO) to become publicly listed on the Canadian TSXV exchange, released all staff. Toronto Defiant and Mad Lions parent OverActive Media also let up to 13 employees go.

 

Trend 2- Going Online

While the games played at esports competitions are natively played online, most large competitions are usually taking place at a physical location such as an arena or a studio. Due to the COVID-19 policies and to protect everyone typically involved in the production of leagues and tournaments, most of those formats have been transformed into online events.

Counter-Strike: Global Offensive developer Valve and esports organizer ESL announced an online competition called “ESL One: Road to Rio,” which will be the official qualifier for the Counter-Strike: Global Offensive Rio de Janeiro Major in November. Another Counter-Strike: Global Offensive format that was moved to an online format is the DreamHack Masters, which was scheduled to take place in Jönköping, Sweden.

Furthermore, most long-format esports leagues such as the Overwatch League, Call of Duty League, and all League of Legends regional championships such as the League of Legends European Championship (LEC), League of Legends Championship Series (LCS), League of Legends Champions Korea (LCK), and League of Legends Pro League (LPL) have adapted an online format as well. 

 

Trend 3 – Sports Joining In

Just as most esports competitions went online for the time being, they were joined by several sports organizations, which turned to gaming competitions and exhibitions to fill the void of sports events.

NBA organization Phoenix Suns decided to continue its regular season schedule by simulating the games in Take-Two Interactive’s NBA 2K game, which the team streams on Twitch. The motorsports organizer Formula 1 established a racing simulation series in place of its regular schedule in which a number of F1 and other motorsports drivers are participating. Additionally, a large number of different sim-racing competitions emerged in recent weeks seeing the participation of racing drivers, athletes, and celebrities, including a multirace exhibition by NASCAR, which is broadcasted on linear TV station FOX Sports.

In general, many entities in the esports ecosystem proved to be capable of adjusting their business operations to the new situation as several of the industry’s niches outperformed the overall market since the end of January when the first cases of COVID-19 started spreading into the western world.

The esports industry is not benefitting from the situation across the board as companies have to deal with the repercussions such as establishing remote work, lack of live-events, fewer sponsorships and media rights sales opportunities, and more. The recent weeks showed that the esports industry is one of the few that by the nature of its infrastructure and product has the possibility to adjust to the current situation, which led to a few players within the industry being able to profit from the current global situation and off certain developments in other industries, especially the sports and entertainment industry.

Nevertheless, certain categories within the esports ecosystem are facing massive struggles such as tournament organizers and esports venue operators as they performed significantly worse than the general market in recent weeks. In addition, many not publicly-traded esports companies, especially startups, are facing existential threats, including a lack of available risk capital.

 

The Outperformers – Lockdowns Boosting Gaming

Following the widespread establishment of governmental guidelines and rules enforcing social distancing, the stop of culture and sports events, the closure of restaurants, retail stores, etc., the demand for gaming as a form of entertainment vastly increased. Reportedly, people are spending 39% more on their gaming hobby currently. Additionally, game developers also profited from a significant increase in media interest in gaming since policies restricted public life.
Several game developers, such as Activision Blizzard, Electronic Arts, and Ubisoft Entertainment, announced in their annual earnings report that they are expecting increased player numbers and revenues due to the COVID-19 situation.

The stocks considered for the game developers category are Activision Blizzard (ATVI), Take-Two Interactive Software (TTWO), Electronic Arts (EA), Capcom (9697.T), Konami Holdings (9766.T), Ubisoft Entertainment (UBI.PA), and Nexon (3659.T).

Another category within the esports ecosystem that is benefitting from the effects of COVID-19 policies is live streaming. As people are trying to entertain themselves with few options available, many turned to watching live streams.

According to the quarterly live-streaming industry report from StreamLabs and Stream Hatchet, Twitch, YouTube, and Facebook all saw Q1 2020 quarter-over-quarter lifts in viewership, with Twitch surpassing 3B hours watched in a single quarter for the first time.

After factoring in the full impact of COVID-19, Chinese live streaming platform Huya expects its revenues for the first quarter of 2020 to increase by 45% to 47% year-over-year and representatives stating that the lockdowns and winter vacation in China boosted engagement rates on its platform.

The stocks considered for the live-streaming category are Huya (HUYA), DouYu International Holdings (DOYU), and AfreecaTV (067160).

The current changes in lifestyle caused by COVID-19 policies resulted in short-term increased demand for gaming-related products such as PC components and peripherals. Gaming hardware manufacturer Razer reported that it expects to see more opportunities and growth for its gaming ecosystem due to the “stay-at-home” situation.

The stocks considered for the manufacturers category are Logitech International (LOGI), Turtle Beach (HEAR), RAZER (1337.HK), ACER (2353.TW), ASUSTEK Computer (2357.TW), Micro-Star International (2377.TW), NVIDIA (NVDA), and Advanced Micro Devices (AMD).

Some of the most prominent players in the esports industry are broad portfolio companies such as Tencent, which is invested in several game developers, esports tournament organizers, and live streaming platforms. Those companies outperformed the general market significantly since late January. 

In March, Tencent stated that it expects revenues from its gaming business to help weather the COVID-19 situation as the millions of people in China self-isolating at home spent an increasing portion of their time on the company’s gaming, music, and online reading services.

The stocks considered for this category are Tencent Holdings (TCEHY), NetEase (NTES), and Sea (SE). 

 

The Underperformers – Imploding Revenues

While several publicly-traded esports and gaming companies outperformed the general market, publicly-traded esports organizations mostly suffer from COVID-19 policies as monetization opportunities became scarce.

Astralis, Origen, and Future FC parent Astralis Group had to reduce operational costs to secure liquidity. The company announced that its management, employees, and most players entered a voluntary agreement to reduce salaries by up to 30% based on salary size.

Unlike the other two companies considered for the teams category, Astralis’ sole business purpose is owning and managing esports teams. Enthusiast Gaming and Simplicity Esports and Gaming have several products aside from the teams they own. Consequently, Astralis experienced the worst stock performance out of the three companies.

Enthusiast Gaming CEO Adrian Montgomery said that his company ended 2019 with $9.24M in cash, which could serve as short-term liquidity in case the company experiences negative impacts from the current global health crisis.

The stocks considered for the teams category are Astralis Group (ASTGRP.CO), Simplicity Esports and Gaming (WINR), and Enthusiast Gaming Holdings (EGLX.TO).

Esports competition stocks took the most direct hit from COVID-19 policies. Allied Esports Entertainment’s HyperX Esports Arena Las Vegas was shut down for the time being and Torque Esports’ esports racing arena in Miami, which was initially scheduled to open in Spring, will likely not be opened anytime soon.

All current significant esports tournaments with live audiences have either been canceled, postponed, or moved to an online format. Therefore, organizers are missing out on ticketing, concessions, media rights, and sponsorship revenues.

ESL and DreamHack parent MTG expects its revenues in the esports vertical, which accounted for 40% of the group’s 2019 2019 revenues, to decrease by 35% to 45% in the first half of 2020 compared to the same period of 2019. The company primarily sees the cause for this decline in a variety of government policies to contain the global outbreak), which had a significant impact on its esports vertical as it is built around live events revenues from media rights, brand partnerships, ticketing, and merchandise sales.

The stocks considered for this category are Allied Esports Entertainment (AESE), Modern Times Group MTG (MTG-B.ST), Gfinity (GFIN.L), and Torque Esports (GAME.V).

 

A Brief Look at Esports ETFs

As industry-focused exchange-traded funds (ETFs) often represent the general development of an industry, we briefly looked into the two ETFs focusing on esports and gaming. Since the beginning of the effects of COVID-19 rendering themselves noticeable on the stock markets, the esports and gaming industry, as represented by the ETFs, outperformed the general market. Especially in the initial recovery phase since March 16, the industry seems to have a significant advantage over the general market.

The ETFs considered for this category are the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD) and the VanEck Vectors Video Gaming and eSports ETF (ESPO).”

 

 

Japan Expansion Esports Economy 2025

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Japan plans ambitious expansion of esports to boost economy through 2025

The government has an ambitious plan to expand Japan’s esports industry with the private sector to help revitalize regional economies and increase social participation by people with disabilities, with an eye to generating ¥285 billion ($2.6 billion) in economic benefits a year by 2025, sources close to the matter said.

The global esports market is estimated to be worth ¥100 billion, with the United States, China and parts of Europe seeing fast growth. In Japan, however, competitive gaming hasn’t really caught fire as a sports event, and the video game market remains dominated by single-player titles designed for smartphones and the gaming consoles of Nintendo Co. and Sony Corp.

The Ministry of Economy, Trade and Industry will work with companies and legal experts to draw up guidelines for promoting Japan’s esports industry, which lacks expertise in organizing large tournaments and dealing with intellectual property rights and other legal issues related to game developers, the sources said.

Through these efforts, the ministry expects esports to generate at least ¥285 billion in economic benefits for regional economies from ticket sales, online viewing fees and advertising revenue, as well as from tournament hosting and corporate equipment supply by 2025.

According to marketing research and news service company BCN Inc., the size of Japan’s esports market is expected to grow from ¥6.1 billion in 2019 to ¥15.3 billion in 2023, propelled by the greater use of 5G telecommunications services and the entry of more game makers into the market. Its data consist of advertising revenue, which accounts for about 75 percent of the market, plus licensing fees, media rights, ticket sales, prize money and merchandise sales.

On a local level, there also have been attempts to use esports to provide health and social benefits.

A nonprofit organization near Tokyo, the Saitama City Citizens Social Network, has established an association to organize esports events for retired people to improve their cognitive health. It claims it is the first group of its kind in the world.

In Takasaki, Gunma Prefecture, an esports event for people with disabilities was held using special controllers customized for their different, individual needs.

Will Betting On eSports

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With most sports on hiatus, will betting on eSports become popular?

The Coronavirus pandemic forced the suspension of the NBA, MLB, NHL, and professional soccer seasons, as well as the outright cancellation of the NCAA March Madness tournament. The Tokyo Olympics have been postponed until at least 2021.

So what are sports bettors betting on now? Last week, the sports on the home page of popular online sportsbook DraftKings’s website that people could bet on were professional darts, German soccer, the Kontinental Hockey League, and New Zealand cricket. If there are limited sports to bet on, sports betting will obviously suffer. To fill the vacuum, sportsbooks are getting creative.

“We remain as committed as ever to giving our fans more ways to win,” a FanDuel spokesperson told MarketWatch. “We’re currently working to develop new, entertaining games which we hope will be a fun diversion during this uncertain time.

Sports betting site FanDuel offered its first ever political bets for the most recent Democratic candidate debate. A few of the posted debate bets were which candidate, Bernie Sanders or Joe Biden, would say “coronavirus” more often, and whether or not “Iraq” would be mentioned. It is not currently legal to bet on the outcome of political elections in the United States, only prop bets such as these are allowed.

Other popular wagers according to FanDuel during this coronavirus sports stoppage were special contests for the reality TV show Survivor, and what Tom Brady’s next team will be. The former New England Patriots quarterback has now signed with the Tampa Bay Buccaneers.

Jason Ader, a well-known gambling industry expert and CEO of SpringOwl Asset Management, says this could also be an interesting period for a new form of sports betting known as virtual sports.

“The virtual sports industry is a real industry we are seeing growth in,” Ader told MarketWatch. “People are betting on virtual sports. It’s computer playing against the computer.”

Popular games to bet on are League of legends, World of Warcraft, and Fifa. “I suspect this could be a moment for Esports,” Ader continues. “If it isn’t, it will never be.”

No gaming companies contacted for this story would disclose specifics as to how much money has been wagered on Esports or virtual sports in the wake of the coronavirus outbreak, but Ader claims that Esports betting is up 19% year over year.

Las Vegas, the sports betting capital of the U.S., has been devastated by the effects of the coronavirus shutdown. Nevada Governor Steve Sisolak ordered a 30-day freeze on non-essential business, including gambling, for his state. Nevada averaged $441 million total bet per month in 2019.

The governor’s directive impacts the casino resorts, sportsbooks, and convenience store slot machines. Last week, the famous Las Vegas Strip will be shut down for the first time since the JFK assassination in 1963.

 

Things You Need to Know on Esports

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Things You Need to Know Before Starting on Esports Betting

Sports betting is an age-old tradition enjoyed and loved by one and all. It has come to a long evolutionary road and has taken many new forms and explored new possibilities with the age of the internet. Today esports betting has become a popular way for the betting lovers to play sitting in the comfort of home.

The betting sites today are so fully functional that they serve the same purpose with much ease as the traditional bookmakers do. We also have so many betting options to choose from, different choices of wagers, forms of betting, etc. We can bet over almost any sport in the world, such as video gaming.

Treat this article as a full-fledged guide to esports betting. In case you are new to esports betting, this is your chance.

The inception of esports betting

The early activities of esports betting were done inside the community of video gaming. There were no other choices as the bookmakers, as well as the betting sites, were not yet influenced by competitive video gaming, so all the wagers were done privately in an informal manner. People, although, had to depend on the honesty and integrity of the people they were betting with, and they were never assured of the action they desired.

Then the attention of the betting stalwarts shifted towards esports. Pinnacle was among the initial sites to get indulged in esports. They began offering betting markets for esports in 2010, while other sites joined the fad thereafter. Through early 2017, Pinnacle declared winning of 5 million wagers for esports. Hence started the craze that is now expected to live for centuries to come.

Forms of Esports Betting

So now, after you know the brief history of esports and video gaming through the years, another important step is to know different kinds of esports betting.

Here are some:

  • Social betting
  • Challenge betting
  • Real money betting
  • Skin & item betting
  • Fantasy esports

Social betting is typically a private wagering method with people, and it’s definitely not a good idea. Betting with strangers can turn out to be a bad engagement costing you a hell of money.

Challenge betting is preferred by some extremely skilled gamers. The idea is for you to compete directly with gamers at a mutually agreed stake. These stakes are arranged informally, but they can also be managed with a challenge site like WorldGaming.

Real money esports betting is also commonly known as fixed-odds esports betting, is the easiest and most fun way to earn bucks from esports betting. It only requires a little knowledge of traditional sports for you to start with.

Fixed odds esports betting is quite similar to sports betting on fixed-odds sports betting. You just have to place wagers over the esports outcomes instead of the results of other sports.

Skin/item betting and fantasy esports are also popular, but you need first to learn how they operate. It can be so much fun, as they offer real potential for earning money. You can definitely try all of these options, but it is wise as a beginner to stick to one for the starters.

Where to bet on esports?

Fantasy sports betting is only possible online, and not many sites offer it. Amongst the major fantasy sites, DraftKings is the only one with esports. Skin, as well as item betting, is also possible only online. Sites for these games are not yet licensed or regulated properly.

There are many options for real money sports betting. In countries like the United Kingdom, there is an option to place wagers in bookmaking shops legitly. The sportsbooks in casinos across Las Vegas also accept wagers on exports. This happened since sports betting was legalized in Nevada.

Best Esports Betting Sites

If you have previously been involved with sports betting, the best way is to bet on games that you know the most about. Some sites offer real-time information on sports and esports betting, so you can go gambling geared up for winning.

It will put you in a position to win while making you real money. Here are some popular sports betting sites that we recommend:

Bet365, Betway Esports, Betfair, Unibet, GG.BET, 888sport, Pinnacle, 22Bet, Arcanebet, BUFF.bet are the sites that are preferred by people and we recommend them too.

In case you’re fairly new in sports betting, then you probably do not know much about these games. In such a case, focus on some popular games for the beginning.