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esports finance

Esports Business Collective

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Esports Business Collective: An Exclusive Conference For The Billion Dollar Industry That Awarded $211M In Prize Money Last Year

“ Learning about esports is about to become much more simple. The EBC is educating interested executives and entrepreneurs on how to enter this growing space with a new series of special events.

Toronto, Canada (PRUnderground) February 19th, 2020

The Esports Business Conference (EBC) announces the first of four events to take place in 2020. Esports is one of the coolest and fastest-growing industries. A recent report from Goldman Sachs stated that esports are watched more than Netflix, HBO, and ESPN combined. EBC brings together key decision makers to discuss the business of esports and collaborate on industry changing deals.

EBC will take place at Canada’s leading law firm, McCarthy Tétrault, in Toronto, with a very exclusive invitation list. The first conference is scheduled for May 25th, 2020. Deal-making and networking opportunities are reserved for people who are truly capable and willing to lead the industry forward.

“Our goal is to provide a platform for key decision-makers to share ideas, connect, and collaborate on all things esports,” said Arena Mogul, co-founder at Beam.gg and co-host of the EBC. “We’ve noticed a lack of conferences that truly explore the inner workings of esports. This is why we set out to create a series of high-quality events where esports veterans facilitate discussions of core industry topics. This is a great opportunity to network and collaborate. We hope everyone with a stake in esports will join us this year.”

Top leaders are taking in the true, unique value being delivered by subject matter experts. The networking sessions are expected to include investors, seasoned entrepreneurs, C-level executives and senior management. As EBC executives like to put it, they are “on a mission to become a premium, global esports business event and network for reputable industry leaders.”

“With a market value of USD 1 billion that continues to grow, it’s hard to ignore the prominence and potential of esports,” said Sabrina Bruno, a lawyer at McCarthy Tétrault and co-host of the EBC. “Regulation is developing as quickly as possible to keep up with esports growth and expansion, which is why we wanted our first event to break down the different legalities in esports, as well as what’s to come.”

The May 25th event will dive deep into the legal aspects of esports. Future events break down other aspects of the industry. 

About Esports Business Conference (EBC)

Esports Business Conference is a series of yearly events that bring together accomplished entrepreneurs, C-level executives and decision-makers to collaborate on industry-changing deals. As the industry swells past the USD $1 billion valuations, EBC has recognized the dire need for a series of events to explore the true drivers of esports success. The first event will take place on May 25th, 2020 in Toronto, Canada.

Counter-Strike’s new esports framework

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Counter-Strike’s new esports framework allows for profit-sharing, transforms league

“ A partnership between the largest esports organization and leading Counter-Strike: Global Offensive teams aims for long-term viability for its most viable players. Dubbed the “Louvre Agreement,” 13 CS:GO teams will have a share of revenues and profits from Pro Tour competitions held by the ESL, the world’s largest esports network and the oldest still in operation. The partnership also involves Dreamhack, which produces large-scale esports events and festivals.

This agreement also makes the 13 teams majority stakeholders in the league and will have a role in how it operates. The agreement transforms the ESL Pro League into a 24-team competition (starting on its 11th season in March) with a single global division, moving away from a region-based model. The additional 11 teams must qualify on the basis of their world ranking or through the Mountain Dew League, the ESL Pro League’s gateway series.

Victor Goossens, founder, and co-CEO of Team Liquid said the teams and ESL have been working to plan for sustainable careers and futures for the esport. “The new entity will utilize our combined strengths to pave the best path forward for everyone,” Goossens said in a prepared statement. “We consider this a monumental agreement and an important step forward for all of esports.”

The signed teams for the ESL Pro League are Astralis, Complexity, Evil Geniuses, ENCE, FaZe Clan, Fnatic, G2 Esports, Mousesports, Natus Vincere, Ninjas in Pyjamas, Team Liquid, Team Vitality, and 100 Thieves. 

The agreement means those partner teams are now majority stakeholders with a long-term slot for participation and will earn a share of revenues from all competitions in the ESL Pro Tour, including IEM Katowice and the ESL One Cologne. The ESL Pro Tour has a total prize pool of $5 million across 20 tournaments and leagues.

“The other remaining 11 slots will be open to teams qualifying on the basis of their world ranking or directly through the Mountain Dew League, the ESL Pro League’s gateway competition,” said Craig Levine, ESL’s chief strategy officer. “This creates the best of both worlds by allowing for stability as well as new and up-and-coming teams to qualify.”

The news of the reconfigured ESL Pro League comes on the heels of a newly announced Counter-Strike league called Flashpoint, operated by FACEIT and funded by a consortium of other esports organizations. Flashpoint’s organizers have said they want to bring more personality and flash to esports, citing the WWE as an inspiration.

Mobile Esports Will Make Its Mark In 2020

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Mobile esports will make its mark in 2020 with substantial growth

 “ The esports industry has seen unprecedented growth over the last few years. Mobile gaming isn’t far behind the curve, and mobile esports is something to keep an eye on.

Last year brought unimaginable revenue to the games industry, growing 3% to $120.1 billion. For the first time in history, esports topped over $1 billion in 2019, and mobile esports has transitioned into one of the fastest-growing sectors of gaming. 

Advancements in cellular technology make production costs for mid-low-tier companies less expensive. Therefore, emerging markets, such as those in India, are experiencing immense growth. Smartphone manufacturers and app developers shift their focus towards younger markets, as revenue growth subsides in mature markets.

There is a spectrum of phone quality in developing countries. Developers are conscious of creating applications that are accessible to users on both sides of the spec scale. Their efforts resulted in the introduction of “lite apps.” These less intensive mobile apps have acted as a catalyst for growth in both mobile gaming and esports.

Mobile esports

A report by IronSource states that half of the mobile app users play games, making mobile games as popular as Apple Music and Spotify. The level of accessibility, affordability, and quality found in-game apps has impacted the market significantly. Jason Ng, vice president of strategic partnerships at digital entertainment platform Garena, told TechAsia, “It was important that game developers brought games suitable for esports to mobile, which expanded the addressable audience significantly.”

The growth of mobile esports can be seen in some of Garena’s games. According to Esports Charts, their Free Fire World Series 2019 finals in Brazil garnered a high of 2 million simultaneous viewers with a total of 130 million online views. The tournament’s viewership shattered records for mobile esports tournaments.

PUBG Mobile is one of the most popular titles for gamers and illustrates the growth of mobile esports. The PUBG Mobile Club Open final in 2019 had a total of 532 million views, 11 times more than the year before. The tournament’s prize pool totaled more than $2 million and had a peak viewership of around 600,000.

Call of Duty: Mobile only released a few months ago and is growing into one of the most sought after games on the market. Since its release, it’s been downloaded more than 170 million times. While the game’s esports scene is in its infancy, the community-hosted tournaments suggest fans are looking forward to the esport. In fact, Garena recently hosted a tournament, The Clan Invasion. Additionally, Call of Duty: Mobile Mission One held in Thailand by Garena featured a $6,600 prize pool.

On-the-go peripherals

With mobile gaming growing in popularity, developing peripherals for serious gamers is an emerging industry. Bluetooth controllers for phones are a significant trend. Companies design phone peripherals to be just as ergonomically useful as devices for PC and console. Highly acclaimed peripheral manufacturers Razer and SteelSeries raised the bar in phone gaming by releasing a line of accessories. Additionally, Apple integrated PS4 and Xbox controller capability to its devices.

As app developers continue to enhance the gaming experience, the mobile esports audience will continue to grow. Newzoo estimates growth in phone gaming will continue to surpass growth seen in both console and PC markets. In 2020, mobile gaming is supposed to comprise 57% of the global gaming market.

 

 

Youtubes Ad Rev Esports

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Is YouTube’s $15B in Ad Revenues a Map to Esports Business’ Holy Grail?

  On Monday, Google’s parent company Alphabet reported its 2019 annual financial results. As part of that report, the company disclosed the ad revenues of its subsidiary YouTube for the first time. According to the company’s SEC filing, YouTube generated $15.2B USD in ad revenues for 2019, up 36% from $11.2B the year prior. In 2017, the video-sharing platform’s ad revenues were $8.2B.

Putting the 2019 ad revenues in perspective is the fact that it is just over nine times the amount ($1.65B) that Google spent to acquire YouTube in October 2016. Although impressive, this number does not necessarily indicate that Google’s investment in YouTube is breakeven or profitable yet. In the Q4 2019 earnings call on Monday, Ruth Porat, the chief financial officer of Alphabet and Google, said, “We pay out a majority of revenues to our creators.”

YouTube is a platform catering to a broad audience, of which gaming and esports is just a minor share. A rough estimate is that about 7% of all YouTube hours watched are gaming and esports related, which is taking about 1B total hours watched daily and 50B gaming content hours watched in 2018 into account. When neglecting uneven distribution of ad revenues by video category, that would be approximately $1.1B in ad revenues generated by gaming content. For the sake of completeness, it should also be noted that YouTube has over 1B active monthly users and made $3B in non-advertising revenues, which included 20M YouTube Premium and YouTube Music paid subscribers as well as 2M YouTube TV paid subscribers.

I’ll take this occasion as an opportunity to look at the importance ad revenues might have in developing a profitable esports ecosystem. As many esports teams and leagues model their revenue streams after traditional sports teams and leagues, I will look at those for comparison. Most major sports leagues make more than 50% of their revenues from media rights, which are usually paid for by broadcasters covering them. Broadcasters, in turn, make a majority of their revenues in advertising revenues and subscription fees. Considering the overlap in business strategies, it is likely that media rights will be one of the most important revenue streams for the esports ecosystem going forward as well.

With that in mind, the advertisement revenues published by YouTube provide an indication that there is money to be made for video-sharing and streaming platforms through advertising and subscription revenues, which can be used to purchase media rights. YouTube did just that last week when it entered into a multi-year strategic relationship with Activision Blizzard, including exclusive worldwide streaming rights for the developer’s two franchised leagues, the Overwatch League and the newly established Call of Duty League.

Aside from the $15.2B landmark from YouTube, there are several more numbers that we can look at for orientation. The Information states that Amazon-owned Twitch brought in about $230M in ad revenues in 2018, and as of the middle of 2019, Twitch was on track to deliver about $300M in ad revenues for the full year 2019.

Three Chinese Tencent-backed live-streaming platforms add further context to the potential of ad revenues in gaming and esports. All three companies are in the early stages of monetizing their platforms. Huya reported advertising and other revenues increased by 91.4% to ¥221M RMB ($32.1M) for the fiscal year 2018. DouYu reported advertising and other revenues increased by 68.5% to ¥196M ($27.5M) in the third quarter of 2019. Bilibili reported advertising revenues of ¥247M ($34.6M) for Q3 2019, representing an increase of 80% from the same period of 2018.

Other platforms are still in the very beginnings of utilizing ad revenues; Microsoft-owned Twitch competitor Mixer started adding ads to its streams in September 2019. Just like linear TV stations, the main income sources of all of those platforms are ad revenues and subscription fees. The executive summary of streaming platforms’ business plans is the constant acquisition of new viewers and paying subscribers as well as the retention of existing customers. One of the key resources being the content on a platform, it is in their interest to buy exclusive media rights to popular esports formats as they help drive fans to their sites. Looking at sports once more, one 2016 estimate had Disney’s ESPN paying out $7.3B annually for sports rights. 

A massive advantage that online video and streaming platforms have over linear TV is their superior ability to custom tailor ads to viewers’ personal interest profiles, which allows them to create better value and return on ad spend for advertisers making it more attractive than TV advertisement deals. According to an Ipsos Connect research paper, a 62% majority of all YouTube mobile advertising receives viewers’ attention compared to only 45% of TV advertising. Furthermore, paid YouTube mobile advertising is 84% more likely to receive attention than TV advertising is.

Notwithstanding the fact that this is neither an exhaustive nor a complete consideration of all the aspects of media rights in esports, YouTube’s latest ad revenues number can help businesses understand that a solid content distribution infrastructure and value chain is already in place that has the potential to generate sufficient cash flow to build a sustainable esports ecosystem. Moreover, the numbers looked at in this article are a hint to the probability of esports stripping away brand value communication channels from traditional sports within the current decade.

 

Envy Gaming Hops Onboard Greyhound

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Nation’s largest bus service will partner with Dallas Fuel and Dallas Empire in 2020 season

 “ DALLASFeb. 6, 2020 /PRNewswire/ — Envy Gaming, Inc., the Texas-based esports organization that owns the Dallas Fuel team in the Overwatch League and the Dallas Empire team in the Call of Duty League, announced a season long partnership with Greyhound, the largest provider of intercity bus transportation in North America. The partnership is the first foray into esports for the iconic transportation operator, which carries more than 16 million passengers to 2,400 destinations across North America each year.

Greyhound will provide exclusive intercity bus transportation onboard its modern fleet to Envy’s professional esports teams during the Overwatch League and Call of Duty League matches played in North Texas in 2020 and plans to launch the partnership with a gaming-themed fan lounge on a Greyhound bus at the Dallas Fuel Opening Weekend, February 8-9.

“When looking at the esports industry, we realized that our brands align in many ways: modernizing entertainment, utilizing new technologies, and delivering a product that’s accessible and convenient to the greatest number of people,” said Lourdes Brown, Director of Marketing at Greyhound. “We’re proud to be partnering with Envy Gaming and excited to provide fans across North America a better, more affordable travel option to see their favorite teams this season.”

Greyhound’s buses have free WiFi and onboard entertainment allowing passengers to stream movies and television shows or play games from their own devices. Passengers can travel in comfort with extra legroom, leather seats and convenient power outlets to stay connected.

“Partnering with Greyhound gives us a chance to work with not only a fellow category leader based in Dallas, but one of the most iconic and well-known brands in travel in all of the world,” said Geoff Moore, President and COO of Envy Gaming. “Greyhound gets it–delivering modern amenities to enhance the customer experience is parallel in so many ways to the esports events we are producing in North Texas that blend the best of sports and entertainment.”

Custom-wrapped Greyhound buses featuring team branding are expected to appear at North Texas arenas hosting esports events, and players for the Dallas Fuel, the Dallas Empire and Team Envy will appear in social media and video campaigns with Greyhound. Engine Shop consulted on terms of the partnership.

About Envy Gaming

Envy Gaming, Inc. is the owner and operator of popular esports franchise Team Envy, the Dallas Fuel team in the Overwatch League, and the Dallas Empire in the Call of Duty League. Founded as a professional Call of Duty team in 2007, owner Mike Rufail has grown the Dallas-based organization into one of the largest and most-winning esports groups in the world. Today, Envy Gaming competes, streams and produces content across multiple titles including Overwatch, Call of Duty, Apex Legends, CS:GO, Fortnite, and Super Smash Bros. Envy was named the 2016 Esports Team of the Year. For more information, visit Envy.gg.