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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/

Hainan to Launch $145 Million Esports Fund

• South China’s tropical Hainan will set up a 1 billion yuan ($145 million) fund to lure esports businesses to the province, as part of a broader package to support gaming in the region.

The money will be used to support “related companies” and subsidize global esports competitions held in the province, said Sun Ying, the director of Hainan’s tourism, culture, broadcasting and sports department. She also said the government would make it easier to get approval to hold such events.

Sun made the announcement at an esports industry forum held in the island’s Boao city on Thursday.

Sun said the government would also offer other incentives to the sector, such as tax breaks and benefits such as subsidized housing and residency status for star gamers.

The official also said the local administration planned to expand the province’s visa-free visit program —which currently applies to 59 nationalities — to include more countries in the future. Sun said this would make it easier for more people to participate in esports events in the process.

Hainan, known for its warm weather and sandy beaches, has long been heavily reliant on tourism.

However, the central government has plans to shake up the region’s economy, with the State Council announcing in October that the province would become China’s 12th pilot free trade zone. According to a policy guideline document (line in Chinese) released at the time, the Hainan zone will focus on the international tourism, modern service, and advanced technology industries.

In recent years the gaming industry has rapidly expanded as ever larger numbers of Chinese people have come online. The value of China’s esports market has more than tripled since 2015 and is expected to more than double from its 2018 level to 247.8 billion yuan by 2023.

Provinces including Zhejiang, Anhui, and Jiangsu have announced plans to build so-called “esports towns,” regions in which incentive policies much like Hainan’s — direct funding and tax breaks — have been promised.

However local governments’ enthusiasm for this growing sector could be met with roadblocks, as the central government has displayed an ambivalent attitude towards video gaming.

The central government department responsible for approving the release of games did not give the green light to any new titles for most of last year. Then, in April, it was revealed that thousands of titles that had already been waiting for approval — some for more than a year — would be forced to start the approval process all over again under new regulations.

In September last year, the General Administration of Press and Publications said it would control the total number of online video games and new titles in operation, ostensibly to address worsening eyesight among the country’s young people.

Source: https://www.caixinglobal.com/2019-06-21/hainan-to-launch-145-million-esports-fund-101430056.html