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How eSports has Created a Multi-Billion Gaming Media Market

George Miller

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How eSports has Created a Multi-Billion Gaming Media Market
Reading Time: 6 minutes

 

FN Media Group Presents Microsmallcap.com Market Commentary

 

Few sectors have seen similar rapid growth as the booming eSports sector. This formerly “niche market” has morphed into a mainstream phenomenon, which is taking the media and technology industries by storm. With some eSports competitions garnering more viewership than traditional sports tournaments, companies are realizing that this eSports trend won’t be losing steam anytime soon. Major gaming and internet media companies such as Apple (NASDAQ:AAPL), Activision-Blizzard Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:EA), Netflix Inc. (NASDAQ:NFLX), and Enthusiast Gaming Holdings Inc. (OTC: EGHIF) (TSX-V:EGLX) are all entering the eSports scene.

Just a few years ago, eSports was barely a blip on the overall video gaming radar. What was once a non-existent sector has morphed into a $1.1 billion industry with dedicated tournaments, professional leagues, and viewership numbers that rival most major sports events. In 2016, more people watched the final match of popular eSports game League of Legends than the NBA finals. With such an explosion in popularity, early adopters and leaders involved in the esports landscape are well positioned to reap the exponential growth in years to come.

Understanding the eSports Phenomenon

Unlike traditional sports, which have seen limited growth over the past few years, eSports has been exploding in popularity at a remarkable rate. According to one Goldman Sachs report, the eSports market is predicted to double in the next three years. Another famous equity guru, Chris Parry, has gone on to say that what eSports in today’s era is in the same place that cannabis was back in 2015.

Companies like Nike, which has endorsement deals with some of the top athletes in the world, are already reaching out to major eSports celebrities with sponsorship offers. Even traditional sports team owners have also dipped into the eSports scene. Francesco Acquilini, the billionaire owner of the Vancouver Canucks, has invested heavily in an eSports Franchise of his own. “eSports has seen extraordinary success and continues to be one of the fastest growing industries in the world,” said Acquilini, who recently raised $18.7 million to acquire Luminosity Gaming.

One of the first games to acquire mainstream eSports popularity was StarCraft 2 from Activision-Blizzard Inc. Since then, the company has created many more successful games such as Overwatch, which currently has 40 million players and 11 million live play stream viewers at any time. Activision-Blizzard Inc. has even hired Steve Bornstein, former president of ESPN, NFL Network, and ACB sports to serve as president of the company’s eSports division.

Another major eSports game, Fortnite, became an instant hit as the studio behind it reported an astonishing $223 million in March 2018 alone. Fortnite creators Epic Games will be giving away US$30 million at the 2019 Fortnite World Cup. Meanwhile, the world’s most popular Fortnite streamer Ninja, brought in nearly $10 million in revenue in 2018.

Other gaming giants, such as Electronic Arts Inc., are also working closely with the eSports community. Their FIFA 18 Global Series saw over 20 million players participate globally in a series of tournaments as the company looks to build a hardcore eSports following.

The Rise of Gaming Media Platforms

Just as major gaming companies are capitalizing on the eSports trend, dedicated eSports media platforms are doing the same. Major streaming companies like Netflix Inc. consider eSports streaming more dangerous competition than HBO, saying “We compete with (and lose to) ‘Fortnite’ more than HBO.” Video streaming services being more concerned about eSports streaming than direct competitors should be a huge indicator of the disruptive nature of this sector.

Another company closely watched by analysts is Enthusiast Gaming Holdings Inc. Having already become the largest publicly traded video game media company in North America, Enthusiast Gaming has already seen an impressive 625% year-over-year revenue growth

With a network of websites and Youtube channels, reaching over 150 million monthly visitors, Enthusiast is comparable in size to major online communities like Reddit, Discord, and Twitch. Having doubled in viewership in the past six months alone, the company is the fastest growing gaming network in North America (according to Comscore). While these companies are valued in the hundreds of millions and have been purchased by conglomerates, Enthusiast’s market cap is small in comparison, at $86 million.

Enthusiast Gaming Holdings Inc. (EGHIF-EGLX) success and rapid growth, is largely due to the company’s aggressive growth strategy through acquisitions. in January, Enthusiast announced the acquisition of The Sims Resource, the world’s largest female video gaming community with 2.5 billion page views per year. The group also generates 10 percent of all views on Twitch, cementing Enthusiast’s foothold on other major platforms as well.

Over the past twenty years, the demographics of gamers have changed. Today, the average video game player is 34 years-old with far more disposable income then they had when they were younger. Instead of “growing out” of the hobby as some guessed would happen years ago, gamers have become more passionate over the years. This means that eSports companies have never been in a better position to enjoy significant growth.

Further Gaming Developments

Apple Inc.’s (NASDAQ:AAPL) gaming revenues from 2018 are estimated to be US$9.45 billion. Their 2017 gaming revenues were an estimated US$8.03 billion, this represents a year-on-year growth of 18% from their gaming portfolio alone, above their total year-on-year of 15.86%. In the 12 month period from March 2018 to March 2019, they actually experienced a total revenue decline of 5.11%. Gaming has become a big business for major conglomerates.

Veteran gamers are looking forward to this summer as Activision-Blizzard Inc. (NASDAQ: ATVI) announced they would be launching an old-school, classic version of their flagship game, World of Warcraft. With the number of active players falling over the past few years, Activision-Blizzard expects player numbers to spike. Specifically, millions of old-time players who’ve left the game or have been playing on private, non-official servers are expected to re-subscribe.

Electronic Arts Inc. (NASDAQ: EA) continues to dominate the sports games market. The company recently announced their Madden NFL 19 Bowl broke a viewership record on twitch with a live audience of 97,000. This was a 650 percent increase from last year’s Madden NFL 18 Bowl.

In a quarterly earnings report, Netflix Inc. (NASDAQ:NFLX) isn’t even focused on direct competitors such as Disney+ and Amazon Prime, saying that they can compete with other streamers based on user experience, whereas eSports require a different approach, one which they haven’t figured out yet, though alternative forms of media, such as the “choose-your-own-adventure” Black Mirror: Bandersnatch, may provide an answer.

For a FREE research report on Enthusiast Gaming Holdings Inc. (OTCQB: EGHIF) (TSXV:EGLX), visit www.microsmallcap.com

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eSports

Veloce Racing announce ART Grand Prix as official Extreme E Competition Partner

George Miller

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Veloce Racing announce ART Grand Prix as official Extreme E Competition Partner
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Multiple F2 and F3 champions ART GP to provide operational support
Veloce Racing continues its racing team development and expansion
Preparations underway ahead of Extreme E’s first season

Veloce Racing has announced a brand-new collaboration with multiple-discipline motorsport team, ART Grand Prix, as its Competition Partner ahead of the inaugural season of Extreme E, commencing in early 2021.

Veloce Racing continues its recent expansion, following significant investment and subsequent merge with sister company Veloce Esports in August. The London-based organisation grows ever-stronger with announcements flooding in over the past couple of months, including the recent Emirati virtual racing project – YAS HEAT ESPORTS – and now a partnership with the world-renowned ART for its assault on the highly-anticipated Extreme E series.

France-based ART Grand Prix is steeped in motorsport history, recording 19 drivers’ titles across Formula 2/GP2 and Formula 3/GP3, as well as over 200 race wins in the Formula 1 feeder series’. The team’s 2020 schedule comprises competing in the aforementioned categories, complimented by a DTM campaign with Robert Kubica in BMW machinery. Formula 1 World Champions Lewis Hamilton, Nico Rosberg and Sebastian Vettel have all honed their craft under the ART banner at some stage in their careers.

The blend of Veloce’s fresh and innovative philosophy, alongside ART’s operational and logistical expertise, will prove invaluable to the team’s championship challenge, as they venture into the first year of racing in the Extreme E series.

Sébastien Philippe, ART Grand Prix Team Manager said:

“This is a really exciting partnership for ART. We have developed our reputation in the world of single seater/formula racing and we are multiple winners; but this is a fantastic new challenge for us in an incredibly innovative series, with a very driven group of people at Veloce Racing. It is great to be involved in Extreme E and Veloce Racing from the very start, and I’m sure it will be an exciting journey.”

The enthusiasm for the relationship is shared in equal measure at Veloce Racing and voiced by Adrian Newey, who knows a little about what it takes to win.

Adrian Newey, Lead Visionary added:

“This is a very positive partnership, Extreme E is a new series operating in very difficult areas of the world with new cars, technology and a multitude of challenges. To work with an extremely successful and solid ‘pair of hands’ like ART Grand Prix – who have competed and won in so many series’ as well as helped develop some of the world’s best drivers and engineers – gives Veloce Racing a great head start.”

The likes of HWA, TEAM TECHEETAH and X44 highlight the ultra-competitiveness of the Extreme E line-up, but Veloce Racing is more than ready for the challenge, with this latest partnership a part of its strategy for overall success.

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eSports

Mercedes-Benz to become the exclusive automotive partner of all global LoL Esports events

George Miller

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Mercedes-Benz to become the exclusive automotive partner of all global LoL Esports events
Reading Time: 3 minutes

 

The Stuttgart-based luxury brand is set to become the exclusive automotive partner of all global League of Legends Esports events of Riot Games. This was announced today by Bettina Fetzer, Vice President Marketing Mercedes-Benz AG, during the 2020 League of Legends World Championship Preview Event. The partnership will focus on the League of Legends community and will feature Mercedes-Benz as the presenting sponsor of the Trophy Ceremony at global events — the pinnacle of sporting success for LoL pro teams.

The tenth edition of the 2020 LoL Esports World Championship, or 2020 Worlds for short, will take place in Shanghai from 25 September to 31 October. The first major global sports event in China since the coronavirus pandemic marks not only the tenth anniversary of the Worlds, but also the beginning of the global partnership between Riot Games and Mercedes-Benz. Hints about the partnership were given to the community in advance. Attentive observers had already recognised the Mercedes-Benz GLA and the Mercedes-Benz EQC (combined power consumption: 21.3-20.2 kWh/100 km, combined CO2 emissions: 0 g/km)¹in the official Worlds anthem video, released on 17 September. It was a hot topic in the community. Mercedes-Benz responded immediately on social media, where Bettina Fetzer, Vice President Marketing Mercedes-Benz AG, sat in an EQC with the Summoner’s Cup on the front passenger seat and said in dialogue with MBUX: “Hey Mercedes, guide me to Shanghai!”

Bettina Fetzer officially announced the partnership today at the Worlds 2020 Preview Event, hosted by Riot Games from Los Angeles. Mercedes-Benz is now the exclusive automotive partner of the three global events of League of Legends: the Mid-Season Invitational, Worlds, and the All-Star Event. In doing so, the automotive brand bearing the three-pointed star is elevating the existing sponsorship of the Chinese League of Legends, the so-called LPL, to a global level.

“We decided to partner with Riot Games because we strongly believe in esports”, says Bettina Fetzer, Vice President Marketing Mercedes-Benz AG: “League of Legends is one of the most popular games in recent years. By partnering with Riot Games at the global level, we want to participate even more actively than before in shaping the future of esports and inspire fans about our brand in a playful dialog”.

Mercedes-Benz begins the partnership with the motto “Icons of a new generation” and in doing so looks back on ten years of League of Legends Esports World Championship. Mercedes-Benz underlines the notion of community first at the start of Worlds and during the event issues Mercedes-Benz-branded Hextech Chests – virtual surprise boxes with coveted in-game items. Furthermore, plans call for using creative and innovative approaches to produce and provide exclusive content for fans during the Worlds. By doing so, Mercedes-Benz intends to interact with millions of connected fans around the globe and to actively participate in shaping Worlds through constant engagement.

“As the first luxury automotive brand to embrace esports at a global scale, Mercedes-Benz has developed a deep understanding of the unrelenting passion fueling the game and the League of Legends esports community,” said Naz Aletaha, Head of Global Esports Partnerships, Riot Games. “Mercedes has been synonymous with excellence for nearly a century, and we are excited to combine our shared appetite for innovation to bring great sporting moments to the global League of Legends stage”.

In addition, the TV spot that impressively fuses the world of LoL Esports with the real world celebrated its world premiere at the media event. In the spot, the viewer meets both famous esports heroines and heroes as well as a number of the most popular League of Legends characters. Only the interaction of all the players makes the line-up an unbeatable team and therewith “Icons of a new generation”.

The commitment to esports and the creation of added value is also made tangible by a host of other measures. Mercedes-Benz will from now on present the trophy ceremonies at all three global events, bring a new broadcast segment in the most important global event streams to the homes of fans and pay lasting tribute to esports in general and the League of Legends community in particular with additional integrations and creative communication activities.

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eSports

The Russian Association for Electronic Communications announces the new Gaming industry and esports cluster

George Miller

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The Russian Association for Electronic Communications announces the new Gaming industry and esports cluster
Reading Time: 3 minutes

 

The Russian Association of electronic communications (RAEC) announces the creation of the Gaming industry and esports cluster.

The new cluster’s purpose is to solve practical problems in the communication field of communication with the media, opinion leaders and the general public.

Priority tasks will be:

  • Work with public opinion, convey a common industry position on the role of video games in society and their impact on it through a pool of experts, release and aggregation of information materials;

  • Identification, coordination and verification of unified data on the gaming and esports markets based on independent research and market participants ‘ own information;

  • Development of educational projects and activities.

The cluster is designed to bring together leading organizations and experts from the gaming industry and provide them with the necessary platform for communication with target groups, to become an intermediary between representatives of the gaming world and society.

The initial group of cluster experts includes:

  • Karina Konkova, Communications Director at MY.GAMES (cluster co-chairman in the “Gaming industry” direction);

  • Yaroslav Meshalkin, Chief Strategic Communications Officer at ESforce Holding (cluster co-chairman in the “Esports” direction);

  • Ilya Salamatov, CEO of META Publishing;

  • Artem Vinokurov, Vice-President of the Russian Esports Federation;

  • Elena Grigoryan, Marketing and Advertising Director at MY.GAMES;

  • Vladislav Arkhipov, PhD in law, head of the Theory and history of state and law department at Saint Petersburg state University, adviser to the practice of intellectual property, information technology and telecommunications of the international law at Dentons, author of the course “Legal esports issues”;

  • Sergey Glamazda, Virtus.pro General Manager;

  • Stepan Shulga, Head of esports at Parimatch, esports evangelist;

  • Nikolay Petrosyan, Head of Media direction at ESforce Holding, Head of Cybersport.ru;

  • Olga Morozova, author of the “Igrology”, researcher at the Institute of Psychology in the Russian Academy of Sciences, specialist of the Moscow center for video game research;

  • Anton Oleynik, General Producer of RuHub Studio;

  • Leonid Koen, senior consultant (sports industry and esports) at Odgers Berndtson Russia.

The cluster is open for new participants, and the conditions for joining the expert group are described on the official website of RAEC: https://raec.ru/en/ All applications will be reviewed jointly by RAEC and cluster experts.

Sergey Plugotarenko, Director of the Russian Association for Electronic Communications (RAEC):

“RAEC has long been interested in gaming and esports — not only as a hobby for employees, although many of us like to play, but also as drivers of the media and entertainment industry. For several years in a row, we held panels about video games within Russian Internet forum and Russian Internet Week. As a result, we realized the need for a strong communication platform, within which industry representatives can form a consolidated position and build a dialogue with society. This platform should be our new cluster. To create it, we turned to the largest market players and recognized experts, and as a result, we found a strong mutual interest.”

Karina Konkova, Communications Director at MY.GAMES, co-chairman of the RAEC Gaming industry and esports cluster:

“Games are one of the fastest growing segments of the global entertainment industry, with a global audience of more than 2 billion people. The role and prospects of this market in the digital economy are well understood by its participants, but not always obvious to audiences far from game development. We believe that open dialogue, systematic research and educational initiatives will allow games and esports to better identify their real economic potential and enable talented Russian specialists and developers to achieve success both locally and internationally.”

Yaroslav Meshalkin, Chief Strategic Communications Officer at ESforce Holding, expert on the esports mass culture on the Council of the State Duma Committee on Physical Culture, Sports, Tourism and Youth Affairs, co-chairman of the RAEC Gaming industry and esports cluster:

“Video games and esports like to be periodically blamed for all the deadly sins, masking real social problems behind it. Thanks to RAEC, we are able to work systematically with the perception of games and computer sports at all levels that interest us. The second and no less important task that our cluster is designed to solve is the formation of a unified approach to market assessment, since now the figures of different research companies are very different from each other and need to be verified by the industry Association.”

The Gaming industry and esports cluster started working. You can find out about the results of its activities on the cluster’s page: https://raec.ru/clusters/gaming-esports/.

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