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• On Tuesday, TSM’s parent company, Swift, announced it received $37 million in Series A funding
• Ethan Kurzweil of Bessemer Venture Partners leads a group of investors that include three-time NBA champion Stephen Curry and AME Cloud Ventures, a fund started by Yahoo cofounder and billionaire Jerry Yang

TSM’s founder and CEO, Andy DinhCredit: Jamel Toppin for Forbes

Andy Dinh, the 26-year-old founder and CEO of the esports organization TSM, has always been fiercely self-reliant. Since TSM’s founding in 2009, Dinh has worn just about every hat there is in the industry: player, coach, manager, salesman, public relations. But now he’s getting help in a big way.

On Tuesday, TSM’s parent company, Swift, announced it received $37 million in Series A funding. Ethan Kurzweil of Bessemer Venture Partners leads a group of investors that include three-time NBA champion Stephen Curry and AME Cloud Ventures, a fund started by Yahoo cofounder and billionaire Jerry Yang. The investment also covers Swift’s other business segments, including its influencer content network and its analytic web services like FortniteMaster and ProBuilds.

Dinh, who remains the majority owner and head of the company, started TSM when he was 17 years old using the cash he earned from offering online guides for League of Legends. Wanting to compete in the game, he built a team and put on invitational tournaments of his own. In 2013, as esports became more formalized and the League of Legends creator began running its own official league, Dinh stepped down as a player to focus more on management. His ability to monetize the organization as it began winning championships at sold-out arenas like the Scotiabank Arena in Toronto nabbed him a spot on Forbes’ 30 Under 30 in Games 2017 list.

The investment is a move long delayed but necessary given the rapid evolution of esports. Last year, when the creators of League of Legends announced its groundbreaking plans to franchise its North American league, it was clear that TSM would be among the initial ten permanent teams. Dinh’s club is the winningest in the region with six championships. But as other esports teams raised venture capital to cover the $10 million buy-in, accepted buyouts or were pushed out by billionaire owners looking to get in on the ground floor of the burgeoning industry, it also became clear Dinh would be the last old-school owner in the league to be independent.

“TSM has always run a very lean operation, so we haven’t set ourselves up to take advantage of the fast growth that this market is experiencing, so that’s what we’re trying to prepare ourselves to do,” Dinh told Forbes. “We’ve got a really good group of investors … it’s going to help us accomplish what we want for TSM.” 

Other investors in the Series A include:

• Telstra, Australian telecommunications
• Steve Simon, owner of Simon Property and son of Indiana Pacers owner Herb Simon
• Andre Iguodala, three-time NBA champion for the Golden State Warriors
• Steve Young, Hall of Fame NFL player
• Yifang Ventures, led by Eric Xu, cofounder of Baidu
• Colin Carrier, former chief strategy officer of Twitch
• Walter Wang, CEO of JM Eagle

The capital will enable rapid growth endeavors as well as flexibility to make early bets in the industry as opportunities emerge. The company will use $10 million of the fund for acquisitions and investments in the gaming space, while $20 million will be allocated for both franchising fees and a new 15,000-to-20,000-square-foot esports facility in Los Angeles. It will function as a training place for the organization’s esports teams, a studio for its multimedia content and a way to directly engage with fans. Dinh hopes the facility unites its players across various games to compete at a higher level and to help collectively build the company’s signature brand.

“It’s really important to have one single base where we can build up that TSM culture,” Dinh said.

It’s an especially important aspect of esports. Market researcher Newzoo predicts industry revenue will hit $905 million this year, with 40% of it coming from sponsors. With hazy ROI metrics, brands look to social reach, and TSM is adept at building personalities and communities, with 1.8 million fans following on Twitter, nearly a million on Instagram and 1.4 million on YouTube. Its early bid this year into the billion-dollar game Fortnite about doubled fan engagement. Sponsors include non-endemic companies like Geico, Gillette, Dr. Pepper and Chipotle.

That kind of fan passion and corporate support was especially appealing to lead investor Ethan Kurzweil, who said Bessemer spent a year looking at the esports scene, talking to more people than any other funding roadmap it had before. “It was just really clear Andy was operating at the highest level,” Kurzweil said. “What he had done without any capital at all was two or three times as much as people who had raised a lot of money.”

Another aspect of TSM Kurzweil loved? Its founder’s competitiveness. As Dinh put it, “Second doesn’t feel great to me.”

Update: This story has been updated to clarify Jerry Yang’s connection to AME Cloud Ventures.

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Source: https://www.forbes.com/sites/mattperez/2018/07/24/tsm-raises-37-million-investors-include-stephen-curry-jerry-yang/amp/?__twitter_impression=true

• In a nutshell, competitors play video games, while being watched by a live audience.
• Millions more watch the games online

This sport will soon be a 1 billion dollar business with a global audience of over 300 million fans. But it doesn’t involve a ball, stadiums or grass pitches.

Welcome to the world of eSports.

E-WHAT?

eSports (short for Electronic Sports) is the name given to professional competitive gaming. In a nutshell, competitors play video games, while being watched by a live audience. Millions more watch the games online.

One major tournament, the 2016 League of Legends World Championship finals, attracted 43 million viewers.

League of Legends is a hugely popular fast-paced action strategy game. Gamers battle to be crowned the best in the world, competing to earn $1 million in prize money.

In fact, winning eSports tournaments can net participants up to $25 million when winnings, sponsorship and appearance fees are taken into account.

The highest earning player, German Kuro Takhasomi, has earned almost $3.5 million to date.

GROWING FANBASE

Fans watch on YouTube’s gaming channel or on Twitch, a dedicated gaming channel on the web. eSports viewers spent 17.9 million hours watching their gaming heroes on those channels in the first quarter of 2018. The most popular game to watch is Dota 2, followed by League of Legends and Counter Strike: Global Offensive.

The global eSports audience will reach 380 million this year, made up of 165 million dedicated eSports fans and 215 million occasional viewers.

In 2018, the eSports industry is projected to generate $905 million in revenue, reaching over $1 billion over the next two years.

China and North America will generate over half of that sum.

Fans buying tickets and merchandise will contribute $96 million.

IS IT SPORT?

Just like traditional sport, eSports has its fair share of professionals, commentators and celebrities.

Prize money is certainly comparable to more traditional sports. The National Basketball Association prize pool is $13 million, the Golf Masters is $11 million and the Confederations Cup is $20 million. eSports exceeds each of them with a total prize pool of $24.7 million.

In fact, Fifa has its own eWorld Cup, where the 32 best Fifa18 Xbox and PlayStation players will compete for the title of Fifa eWorld Cup Champion.

eSports has become so popular, that even the International Olympic committee is trying to understand it better. The IOC and the Global Association of International Sports Federations are jointly hosting an eSports Forum at the Olympic Museum in France.

“The aim of the Forum is to explore synergies, build joint understanding and set a platform for future engagement between the eSports and gaming industries and the Olympic Movement,” they say.

The IOC isn’t the only organisation taking eSports seriously.

The US government has recognised full-time League of Legends players as professional athletes.

But detractors scoff at the idea of calling gaming a real sport. After all, gamers sit still in a chair for hours on end showing only agility and dexterity in their hands, they argue.

But those who play eSports would counter argue that it takes a great deal of skill and strategy to win games. They also point out that they practice for hours a day just like any other sports player, and that physical exertion isn’t the marker of sport. Darts players and snooker players don’t have to move much either.

It may be a moot point. An industry that is projected to make $1.4 billion by 2020 is unlikely to require the approval of naysayers.

Written by Alex Gray, Formative Content.

This article was republished courtesy of the World Economic Forum.

Source: http://ewn.co.za/2018/07/04/the-explosive-growth-of-esports

Nicolas Miachon is CMO of Upfluence, an influencer marketing software that helps brands to tell their stories.

 Nicolas Miachon , Forbes Councils

• Whether you’re ready or not, competitive gaming is disrupting entertainment as we know it. Very soon you might find yourself betting on matches in Vegas, rooting for your country’s esports team during the Olympics or sending your kid to college with an esports scholarship.
• The reality is, esports is everywhere. As a marketer, it would be crazy not to embrace it

Giant social networks, multimillion-dollar prizes, international audiences: Welcome to the world of esports.

Whether you’re ready or not, competitive gaming is disrupting entertainment as we know it. Very soon you might find yourself betting on matches in Vegas, rooting for your country’s esports team during the Olympics or sending your kid to college with an esports scholarship. The reality is, esports is everywhere. As a marketer, it would be crazy not to embrace it.

Not convinced yet? Let’s talk numbers.

In 2017, the esports industry raked in nearly 500 million dollars. As it continues to grow more than 40% year over year, the industry is destined to become a $1.7 billion market by 2021.

With an audience of over 300 million people, viewership of streaming sites like Amazon’s Twitch have surpassed popular news sources such as CNN, and according to one study, more unique viewers watched “Gaming video content” than HBO, Netflix, ESPN and Hulu combined in 2017.

The Intel Extreme Masters of 2017 (in Katowice, Poland) was viewed by 46 million people. To put that into perspective, the audience turnout was twice as large as the most recent NBA finals.

Who is watching esports, though? Demographically, the esports audience is mostly male aged from 13-40, making them one of the hardest marketing segments to address. They are also quite international, with Asia, North America and Europe constituting the biggest shares of the market.

How does the esports economy actually work?

The esports ecosystem consists of six major actors: game publishers, teams, players, fans, sponsors and investors. Players become professional when they join teams and play in tournaments organized by game publishers or third parties. These events, both offline and online, attract brand sponsors. Investors range from major sports teams to celebrities and corporate moguls like Russia’s richest man, Alisher Usmanov.

While professional players can earn team salaries and tournament cash prizes, streaming is where most of the action happens for advertisers and consumers. Platforms such as Twitch and YouTube Gaming allow players (professional and amateur alike) to broadcast their game play online 24 hours a day, seven days a week. Fans flock to these livestreaming sites where they can watch their favorite streamer, learn strategy and be entertained. In a way, streaming is the social media of esports.

Streaming is a new influence market.

With new platforms come new influencers. As explored in a previous article, influencers play a crucial role in social media ecosystems, acting as fuel for the platforms by connecting brands and consumers. In this case, the phenomenon of streaming influencers is exploding in esports – so the arrival of sponsors cannot be far behind.

Who are these new influencers and how are they different from professional players? While streaming influencers aren’t necessarily as highly ranked as pros, they do have much larger followings on their streams. The poster child for Twitch fame would have to be Tyler “Ninja” Blevins. In March, he broke records, drawing in over 600,000-plus concurrent viewers during a live stream with Drake.

Unlike traditional social media influencers, who are not paid by the platforms they post on, popular esports players can actually make money on these sites via integrated ads, direct donations from audience members and paid subscription offers. In short, followers are paying to follow and it’s no small matter. In an interview from this year, Tyler Blevins reported earning $560,000 per month from his Twitch streaming. This is purely based on known revenue from paid subscribers — the actual amount could be twice that when donations sponsorships and Twitch Bits are taken into account.

The esports environment is clearly brimming with potential, but advertisers will need to adapt their sponsorship strategies for this unique market. Unlike other niches, streaming influencers are much more likely to be self-sufficient and thus picky about who they work with. What’s more, professional players come as a team package, which is a barrier to smaller brands. So, how does one secure a partnership in esports?

Source: https://www.forbes.com/sites/forbescommunicationscouncil/2018/06/28/esports-is-the-next-biggest-frontier-in-influencer-marketing/#529b473a6d7b

• Esports are the next big thing, Goldman Sachs thinks.
• Goldman said it sees eSports surpassing Major League Baseball and National Hockey League viewership
• According to data from NewZoo, an estimated 167 million people around the globe will watch eSports per month in 2018

In a report published Tuesday, Goldman said it sees eSports surpassing Major League Baseball and National Hockey League viewership. According to data from NewZoo, an estimated 167 million people around the globe will watch eSports per month in 2018.

“The immense popularity of survival-based games like Fortnite, growing prize pools for eSports tournaments, the rise of live-streaming, and improving infrastructure for pro leagues have all paved the way for eSports to reach 300 million viewers by 2022, on par with NFL leadership today,” said the note.

Goldman analysts also stated that they “believe that eSports viewership is moving more into the mainstream, which should support a 14% audience growth for the next five years, Recently, Epic Games announced that it would set aside $100 million in prize pool for the first year of Fortnite eSports tournaments, nearly the size of an entire eSports prize pool in 2017.”

The popularity of eSports is related to the increase of infrastructure within the world of eSports. “In 2017, Riot Games created the North American and EU League of Legends leagues, while in January of 2018, Blizzard launched the Overwatch League. We believe these leagues created the requisite infrastructure that will allow eSports to finally start to close the demonetization gap relative to other established sports leagues.”

Activision Blizzard Inc. (ATVI – Get Report) popular Overwatch league’s playoffs attracted over five million viewers. The company signed a $90 million deal with Twitch for streaming.

In July, the Overwatch League Grand Finals will take place at the Barclays Center in Brooklyn, New York on July 27-28. The event is the largest eSports event to happen. Within two weeks, fans had sold-out the 20,000 person stadium.

Goldman analysts wrote, “we expect total eSports monetization will reach $3 billion by 2022.”

Companies like Tencent Holdings Ltd. (TCEHY) have invested heavily in online video platforms. Goldman largely credits Tencent—which invested $630 million in Doyu and $461 million in Huya, both Chinese online video platforms—for the increase in funding for eSports.

Tencent’s contributions helped bump up the amount funneled into eSports in 2018. “since 2013, there has been $3.3 billion of venture capital investment in eSports related start-ups. In 2018 year to date, we have already seen $1.4 billion of investments, a nearly 90% year-over-year increase from the total fudning in 2017.

• Jim Cramer’s Investing Rule 18: Be Flexible
• Jim Cramer’s Investing Rule 17: Check Hope at the Door

NewZoo data suggests that there’s over 2.2 billion active gamers worldwide. So far, only 5% of the gamers are part of the audience of eSports, but the industry—as Goldman’s data suggests—is growing rapidly.

Source: https://www.thestreet.com/technology/fortnite-helped-broaden-esports-audience-goldman-sachs-says-14634562