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Esports industry to reach $3 billion by 2025 says market reseracher

Marta J.

• The esports business seems to be booming
• Eports is expected to grow with a 20% compound annual growth rate between 2019 and 2025.
• That should see the market grow to more than $3 billion by the end of 2025.

According to ResearchandMarkets.com, esports is expected to grow with a 20% compound annual growth rate between 2019 and 2025. That should see the market grow to more than $3 billion by the end of 2025. This doesn’t come as a surprise, since esports’ popularity and support have been steadily growing worldwide.

The global esports market is likely to exceed a total revenue of over $1 billion for the first time this year, as it’s experiencing year-on-year growth of over 25%. According to Statista, the market generated $865 million in 2018.

Broadcasting rights have become a key source of revenue in esports with television networks like ESPN and ABC airing esports events alongside social media platforms like Twitch and YouTube.

That growth has extended to sponsorships even moreso. The field is by far esports’ strongest revenue stream, as it contributes to almost half of the total market revenue. This has been helped along by the increased attention from non-endemic brands like Nike and Puma who have begun sponsoring esports organizations Furia Esports and Cloud9, respectively.

It’s forecasted that the audience and the number of tournaments will continue increasing over the next five years, opening up opportunities for many potential vendors.

A major share of revenue to the global esports market is generated by North America, specifically the United States. Asia Pacific is one of the fastest-growing markets, with esports flourishing in China, Japan, South Korea, and Australia.

The vast majority of esports’ audience is male viewers aged 20-35.

That said, ResearchandMarkets.com states that esports’ growth “is mainly driven by cloud gaming and mobile gaming.” This makes matters a bit cloudy in regards to how much of that $3 billion is actually being funneled towards esports organizations, players, and tournament organizers.

The topic of inflated valuations in esports has become a hot one in recent months as multiple firms have had their methods questioned for their liberal definition for what counts as “esports.”

Source: https://win.gg/news/1673/esports-industry-to-reach-dollar-3-billion-by-2025-says-market-reseracher

Esports Company 100 Thieves Raises $35 Million In Series B

• 100 Thieves, the esports company co-owned by Grammy-winning artist Drake, talent manager Scooter Braun, billionaire Dan Gilbert and former pro gamer Matt “Nadeshot” Haag, announced today that it’s closed a $35 million Series B.
• Funding round was led by New York-based private equity and growth investment firm Artist Capital Management. Its chief investment officer Josh Dienstag will join the 100 Thieves board of directors.

Matt Perez Forbes Staff

100 Thieves, the esports company co-owned by Grammy-winning artist Drake, talent manager Scooter Braun, billionaire Dan Gilbert and former pro gamer Matt “Nadeshot” Haag, announced today that it’s closed a $35 million Series B.

The funding round was led by New York-based private equity and growth investment firm Artist Capital Management. Its chief investment officer Josh Dienstag will join the 100 Thieves board of directors. The rest of the round is made up of previous backers like Braun and Gilbert along with a new investment from Aglaé Ventures, the investing arm of Louis Vuitton Moet Hennessy-owner Groupe Arnault.

The Series B brings the company’s total funding to $60 million. Other investors include Salesforce CEO Marc Benioff, Dropbox CEO Drew Houston and venture firm Sequoia Capital. Forbes last fall estimated the company was worth $90 million after a single year of competing.

The fresh capital will go toward a 15,000-square-foot training facility and headquarters in Los Angeles, as well as for expanding into new games and increasing its apparel production.

The facility will be the “center of the universe for all things 100 Thieves,” according to Haag, the company’s founder and CEO, as well as a Forbes 30 Under 30 alum. “We’ve grown a lot in this past year…so it’s finally time to put our flag in the ground and make some place our permanent home.”

Settling in as early as this October, the offices will house the company’s staff including players, coaches and content creators, and will serve not just as a production studio and training space, but also as a retail storefront for fans. Unlike many esports companies, 100 Thieves has made its retail arm a significant piece of its overall revenue. All of its seasonal apparel drops have sold out in 20 minutes or less, with each one selling faster and with 50% more product. Its most recent sale in April brought in over half-a-million dollars after selling out in five minutes.

“I don’t think it’s even scratched the surface of what it can be in the future,” Haag says.

The demand during 100 Thieves product launches speaks to the company’s business model—mixing competitive esports teams with a stable of popular influencers like Jack “CouRage” Dunlop and Rachell “Valkyrae” Hofstetter. The tactic might prove useful if talk of a soon-to-burst esports bubble becomes a reality.

“We’ve insulated our business in way where, this bubble that everyone continues to talk about, if it were to pop or there were less interest from investors or sponsors or whatever the case may be, we’re not going to live and die by esports and esports alone,” Haag says. “If esports were to disappear tomorrow, we’d still have a really great business strategy in my opinion.”

Not to say Haag isn’t still “all-in” on competitive gaming. According to Haag, 100 Thieves boasts the second-highest payroll in the North American League of Legends Championship Series, and part of the new investment is meant for expansion in the space. One title particularly linked to 100 Thieves is Call of Duty, around which its publisher Activison Blizzard is planning a city-based league with franchised team slots reportedly priced at $25 million, according to ESPN. Haag, who came up as a Call of Duty pro and whose team’s first championship came in the game earlier this year, says “We’re definitely still thinking through it.”

Source: https://www.forbes.com/sites/mattperez/2019/07/16/esports-company-100-thieves-raises-35-million-in-series-b/#120c3f334b15

This NFL giant just got into esports, and here’s what the tipping point was

• On Tuesday, Activision Blizzard revealed that the Wilf family’s WISE Ventures investment fund, founded by Vikings owners Mark and Zygi Wilf, will become part of its upcoming Call of Duty league by fielding a Minnesota-based team.

Annie Pei

It’s just the first step in getting in on the “next evolution of entertainment.”

That’s how Jonathan Wilf describes his family’s, and subsequently the Minnesota Vikings’, first esports play. On Tuesday, Activision Blizzard revealed that the Wilf family’s WISE Ventures investment fund, founded by Vikings owners Mark and Zygi Wilf, will become part of its upcoming Call of Duty league by fielding a Minnesota-based team.

And while the Vikings owners have had their eye on the esports industry for awhile, it was Activision Blizzard’s approach to building the space that led them to finally get in on the hype. Just like their Overwatch League, the gaming giant intends to run another city-based franchise with Call of Duty as inspired by traditional sports leagues.

“Having watched closely as the ecosystem evolved and matured with the first few years of franchised leagues, we are confident in the long-term potential of what Activision Blizzard is building and in the esports industry as a whole,” Wilf told CNBC.

This makes the Vikings the latest traditional sports entity to charge into the esports industry, which research firm Newzoo projects will generate over one billion dollars in revenue this year. That’s a year-on-year growth of 27% with the North American market accounting for over a third of that $1.1 billion revenue.

But the Vikings are also entering a field where a good number of traditional sports giants have already snapped up slots in various leagues or started their own esports branches. Take-Two’s NBA 2K League, for example, features 21 teams that are each owned by their respective city franchises. Activision Blizzard’s Overwatch League, which features city-based franchise teams, also boasts a few traditional sports entities including the owners of the New England Patriots and the Los Angeles Rams.

These same traditional sports entities have also been wheeling and dealing in the space. In 2017, the Houston Rockets paid $13 million for a slot in Riot Games’ League of Legends North American league. This past April, the Rockets sold their League of Legends team, known as Clutch Gaming, to Harris Blitzer Sports & Entertainment, the parent company of the Philadelphia 76ers, the New Jersey Devils and esports team Dignitas, for a reported $20 million.

But despite their later entry into esports, Wilf emphasizes that the Vikings owners were waiting for what they perceived as a strong investment that would give them a solid foothold in the space.

“For us, investing in esports was never about being first, it was about finding the right opportunity at the right time,” said Wilf. “The proven staying power of Call of Duty as a franchise certainly factored into our thinking.”

Wilf also revealed that WISE Ventures is looking to expand into other games, and that they are exploring the possibility of building an esports-dedicated arena in Eagan, Minnesota on the Vikings Lakes campus.

The Call of Duty league is set to launch in 2020, and its addition of the Wilf family brings the total number of announced teams to seven. Back in March, ESPN reported that franchise spots for the new esports league were being sold at $25 million per slot, though Activision Blizzard has never confirmed that number.

Source: https://www.cnbc.com/2019/07/05/this-nfl-giant-just-got-into-esports-and-heres-what-the-tipping-point-was.html

Facing off with Fortnite, Apex is turning to esports

• Fortnite soared to the top of the video game world when it launched in 2017.
• Electronic Arts’ “Apex Legends,” a similar free-to-play battle royale game, where players fight until the last squad standing, eclipsed “Fortnite” in online views in February.

By Shannon Liao, CNN Business

New York (CNN Business) Fortnite soared to the top of the video game world when it launched in 2017. Electronic Arts’ “Apex Legends,” a similar free-to-play battle royale game, where players fight until the last squad standing, eclipsed “Fortnite” in online views in February. Apex’s victory was short-lived, and Fortnite surpassed its viewership the following month. Now EA has plans to get Apex back on top once again. The company is betting competitions of professional and amateur gamers — known as esports — will broaden Apex’s audience.

Game enthusiasts play “Apex Legends” during the EA Play 2019 event at the Hollywood Palladium in June.

New features and esports deals

EA made a big play to bolster Apex’s esport credentials in June when it announced a deal with ESPN to allow college and professional esports players to compete in Apex games at two events over the summer. The game also added a new competitive mode Tuesday that ranks gamers based on how many wins and kills they can pull off. Fortnite implemented a similar competitive-ranking mode in March.   “Pro teams typically scout from the upper echelon,” said Chris Hopper, head of esports for North America at Riot Games, which develops “League of Legends,” one of the biggest esports titles. “But they also find up-and-coming talent in the ranks immediately below.” EA is leaning on its partnership with ESPN to stream Apex games live online and, later, on the air on the ESPN and ABC networks. ESPN’s director of business development, Kevin Lopes, told CNN Business the network was attracted to Apex Legends’ rising popularity and esports potential. The two companies already had an existing esports partnership over football game “Madden NFL.”   “Making Apex an esport will help drive the audience,” said Michael Pachter, an analyst at financial services firm Wedbush. “It gives players something to watch and learn from.”
World’s top gamers vie for $500,000 in prizes at a Fortnite International video game tournament.   The esports industry has attracted millions of viewers across multiple platforms, and it could reach about $3 billion in market size in 2022, Goldman Sachs forecasts. It’s not clear how exactly that translates into money for EA — esports revenue is hard to pinpoint, though sponsorships and event ticket sales can all generate revenue to some degree. Apex also makes money through in-game purchases such as cosmetic upgrades. But esports can encourage gamers to stick with particular titles and can keep the game feeling relevant for longer, “both of which lead to more chances for monetization,” said Nicole Pike, managing director at Nielsen Esports.   EA estimated during its last earnings call that Apex would bring in $300 to $400 million next year. For comparison, Fortnite made $2.4 billion in revenue in 2018, according to Nielsen’s SuperData.

Apex vs. Fortnite

“People play Fortnite partly because their friends are on Fortnite,” said Will Partin, a doctoral candidate at UNC Chapel Hill who studies esports. “The best-case scenario for the Apex Legends [ESPN] event is that it exposes the game to a lot of people who haven’t tried the battle royale genre yet.”

Esports is EA’s latest strategy to try and generate buzz for the title. When Apex debuted in February, EA paid well-known game streamers to play Apex for the first 24 hours. EA told CNN Business it stopped paying them after that.   The marketing bid paid off: Apex attracted 50 million players within the first month of launch. EA’s chief executive Andrew Wilson said it was the “fastest-growing new game we’ve ever had” during a May earnings call.   “It was our way of showing the world, when people go on

[game-streaming platform]

Twitch and it’s one of the top games, you’re like ‘Oh, that looks interesting. What’s that?'” said Vince Zampella, CEO of Respawn, which made Apex. EA acquired the developer in 2017. If people play Apex as a sport, the game could start winning back fan attention and viewership on live-streaming services.   Some observers think there’s potential for the game to actually succeed as an esports arena. Apex has unique characters and is not updated as frequently as Fortnite, so it’s easier to adapt to, said Will Hershey, co-founder and CEO at the investment advisory firm Roundhill Investments.   “Ultimately, I believe [Apex] has the potential to be more of an esport, in the traditional sense, than Fortnite does,” he said.  

Source: https://www.cnn.com/2019/07/04/tech/apex-fortnite-esports-ea-e3/index.html

Hershey is gravitating toward opportunities in esports

• Twitch, the No.1 streaming site for gamers, touts 15 million unique daily visitors, and over 2.2 million creators who live stream their gameplay.
• The global esports audience is projected to hit 600 million by 2023 — up from 281 million just three years ago, per Business Insider Intelligence estimates.
• And revenue will rise with it: Global esports revenue is forecasted to reach $2.96billion by 2022, up from $869 million in 2018.

Mariel Soto Reyes

The Hershey Company is looking to reach non-traditional audiences through esports, per Digiday. Hershey has traditionally allocated the bulk of its media spend to traditional TV advertising, but it’s increasingly diversifying its media spend beyond traditional TV and into more digital spaces. The esports phenomenon has opened up a channel to reach hundreds of millions of eyeballs worldwide.

Business Insider Intelligence

Hershey is increasingly investing in esports as it looks to tap into audiences its traditional buys likely miss — in particular millennial and Gen Z males under age 25. Hershey decided to ramp up its commitment to the fast-growing space after seeing younger audiences flock to streaming sites like Twitch and YouTube to engage with gamers live-streaming their sessions.

Twitch, the No.1 streaming site for gamers, touts 15 million unique daily visitors, and over 2.2 million creators who live stream their gameplay. The global esports audience is projected to hit 600 million by 2023 — up from 281 million just three years ago, per Business Insider Intelligence estimates. And revenue will rise with it: Global esports revenue is forecasted to reach $2.96billion by 2022, up from $869 million in 2018.

There are three primary methods for brands to advertise in esports:

• Event sponsorships. While brands can reach esports viewers by advertising on streaming platforms like Twitch and YouTube, they can also reach millions of esports event attendees and viewers by sponsoring major live competitions. For instance, 200million viewers tuned into the League of Legends World Championship in 2018 — nearly double the number that watched the Super Bowl that year, which clocked in at about 98 million viewers. That same event sold 23,000 tickets in under four hours, with game owner Riot releasing an additional 3,000 to meet the overwhelming demand.
• Direct advertising on sites like Twitch. Many brands have taken to running ads on alongside gaming content on the top video streaming platforms for live gameplay. For instance, Wendy’s designed an interactive ad-campaign which ran on Twitch, and Nike has even debuted new shoes on the site.
• Influencer brand partnerships. Gaming influencers inspire intense trust and loyalty among their followings: If a gaming influencer recommends hardware, their fans are likely to purchase that gear, and if they recommend food or eat something while playing, their fans might also follow suit. In fact, Hershey’s first foray into esports was a partnership with top gamers “Ninja” ( 5 million Twitch followers), and “DrLupo” ( 3.4 million Twitch followers) to launch its Reese’s Pieces candy bar at gamer event TwitchCon (like Comic-Con, but for video games). Likewise, Axe partnered with “Cizzorz” — part of the popular FazeClan esports team — to run a promotional contest where fans could upload a live-action clip of themselves gaming to Instagram or Twitter and be entered to win a feature on the gamer’s channel and the opportunity to attend VidCon with him.

As the global esports market explodes, I expect opportunities for brand partnerships and advertisements to trace a similar path. And it’s likely that brands get increasingly creative with their attempts to win a piece of the space. Already, brands like Kellogg — which launched a new cereal dubbed “Lucio-Oh’s,” based on a popular Overwatchcharacter — are experimenting with their approaches to the gaming world.

Source: https://www.businessinsider.com/hershey-gravitates-to-esports-opportunities-2019-6

• In the gambling sphere, there’s barely a bookmaker now that doesn’t include esports and there’s a plethora of esports specific operators too
• One thing that hasn’t quite materialized yet is betting exchanges, similar to Betfair, and this is an opportunity Esports Entertainment Group are keen to capitalize on. 

By Esports Insider

There’s undoubtedly been growth in esports betting over recent years. Entertainment and betting arguably go hand-in-hand and players are already betting on a multitude of titles ranging from Counter-Strike through to Hearthstone. In the gambling sphere, there’s barely a bookmaker now that doesn’t include esports and there’s a plethora of esports specific operators too. One thing that hasn’t quite materialised yet is betting exchanges, similar to Betfair, and this is an opportunity Esports Entertainment Group are keen to capitalise on. 

A week on from the news of a big partnership with Dignitas, we spoke to Grant Johnson, CEO of Esports Entertainment Group about his Vie.gg exchange – what they’re trying to achieve – and how he sees the intersection between gambling and esports developing. 

Grant Johnson, Vie.gg CEO (right)

Esports Insider: Tell us about how Vie came about. As a seasoned gambling expert, your profile doesn’t fit the typical ‘gamer’ mold – so what piqued your interest in this particular area?

Grant Johnson: It all came about back in 2013 when I was doing some work with a group who wanted to get into the sports bet casino business. They asked me what was “new”. I did some research and started reading about esports. I had the good fortune to get introduced to Alex Lim. At the time he was the Secretary-General of the IeSF. He, in turn, introduced me to Ken Silva, founder, and president of EsportsCanada, who invited me to the Starcraft championship in Toronto late 2013.

I was absolutely blown away by the excitement and energy displayed by the fans at the event and the fact that the vast majority of the fans were in their 20s. I spoke to several people regarding interest in wagering and the feedback was unanimous — there was a strong interest. Effectively that was the ah-ha! moment for me. The group I was working with decided they were not interested in the sector so I decided to launch my own company at the time called VGambling, which has evolved into Esports Entertainment Group (OTCQB:GMBL). Which in turn launched Vie.gg and the bet exchange platform.

ESI: The gambling industry on the esports side clearly isn’t as developed as the traditional sports counterpart yet — why do you think this is and how do you think this can change?

GJ: Yes, I do believe it will change and it’s already happening. I believe the fan base has to become comfortable with betting. Clearly, some already are and that number is growing rapidly. As I did my research, transparency and Player vs Player options were a constant theme in the feedback we were getting. Hence the bet exchange platform which is specifically suited for the PvP wagering.

We went the route of being a publicly traded company so that the fans, players, and bettors could see with full transparency who was behind the platform. Generally, it is almost impossible to tell with traditional betting operators who the people really are behind it.

ESI: Vie.gg is one of the only exchanges currently in esports. How important are exchanges in a betting ecosystem and do you envisage the space developing in the future?

GJ: Clearly by virtue of the fact we elected to go this way. We are strong believers in the bet exchange system. Esports is all about competing against your friends, and here the bet itself becomes a competition of knowledge which our research has told us is key to the fans of esports. The players can bet directly against each other and not have to deal with the house taking a position against them as it is in traditional betting.

“I was absolutely blown away by the excitement and energy displayed by the fans at the event and the fact that the vast majority of the fans were in their 20s”

As the esports community becomes more comfortable with placing a bet and they come to understand that bet exchange is a more transparent option for them, we feel in the end a significant portion of the market will prefer the exchange model. At this stage, it’s all about educating the fan base about the player versus player bet experience and that is where our main focus lies right now.

ESI: The esports market has been fragmented and regulation is fast improving with more traditional sports betting operators coming in and positioning themselves in the market. What do you see the landscape looking like five years from now? How is Vie positioned differently to these traditional sportsbook brands?

GJ: I agree that there is a great deal of change and educating taking place. The traditional sports books are offering esports in the general belief that their sportsbook player base will cross over to do some esports betting. I do think in certain titles there is some crossover, however, we think that percentage is fairly small.

We believe a focussed effort on the esports fan specifically is key. I agree with the financial experts that the esports betting space will see explosive growth in the next five years. And I believe I have read that esports gambling could, in fact, eclipse the current size of the esports ecosystem itself. That offers huge potential.

I believe in our position as the first mover with the exchange and the transparency that comes with being public. We also believe in partnering with the esports brands that the fan base trusts and follows. Our new and exciting partnership with Dignitas will put us in a strong position to be a major beneficiary of this growth.

ESI: Vie.gg are involved with teams like Dignitas and Epsilon and other esports teams with collaborative sponsor agreements amongst other streamers and influencers. How do you leverage the relationships these offer and what can fans expect to see from these partnerships in the future?

GJ: Clearly, influencers like teams and streamers have a great deal of social exposure and connection with their followers. By aligning ourselves with these teams and brands such as Epsilon and our newest partners Dignitas, both of which have loyal long term fan bases, we are in a position to offer our product to the fans in partnership with the brands.

“I believe I have read that esports gambling could, in fact, eclipse the current size of the esports ecosystem itself. That offers huge potential”

It is a continuation of our belief in transparency and dedication to the esports industry and we feel that in the long run, it will give us an option to offer the fans a way to have confidence in and feel comfortable using Vie.gg for placing wagers when they chose to do so.

Source: https://esportsinsider.com/2019/06/grant-johnson-vie-gg-building-an-esports-betting-exchange/