OT Sports stars, franchises and Hollywood agencies are betting $38 million on an esports revolution

[RonHextall27]

A friend of mine is a commentator for CSGO. He's constantly traveling all over the world to call tournaments and makes a pretty good living doing it. It seems a bit like the wild west right now with players jumping from team to team, tournaments popping up everywhere etc. He described it similar to the PGA Tour where there are a bunch of small tournaments all over the place with decent prize money, and then there were the Majors that had huge followings, and packed arenas where all the best teams would show up. It has regional popularity in Europe and Asia, but in NA it seems it depends on timing whether the event takes off or not.

 

[Holden Caulfield]

A friend of mine is a commentator for CSGO. He's constantly traveling all over the world to call tournaments and makes a pretty good living doing it. It seems a bit like the wild west right now with players jumping from team to team, tournaments popping up everywhere etc. He described it similar to the PGA Tour where there are a bunch of small tournaments all over the place with decent prize money, and then there were the Majors that had huge followings, and packed arenas where all the best teams would show up. It has regional popularity in Europe and Asia, but in NA it seems it depends on timing whether the event takes off or not.

Different games have different popularity in different parts of the world. I know Halo is pretty much dominated by the NA scene. In the one I watch which is SC2 it's mostly dominated by South Koreans in terms of skill, but most of the big crowd tourney's come from Europe with NA a distant 3rd (and small localized scenes in Australia and China).

Honestly people betting against esports are just kidding themselves, IMO. Right now it's pretty unregulated and in some games/places unsustainable but it is the future whether we like it or not. Thankfully players are starting to organize with things like unions starting to gain a foothold in the bigger games (LoL at least I heard). It's been held back at least in part from some very shady organizations, but it seems to be slowly improving. Eventually contact sports are going to go the way of gladiator fights with the stuff we've seen about CTE and stuff. I'm not talking next year or hell even next decade, but eventually you are going to see contact team sports start to die down. We've already seen reducing numbers of youth participation in sports like football and hockey and that is not all on cost. esports is a market that just continues to grow and grow and will continue to step into losses traditional sports will eventually take. The fanbase skews a hell of lot younger than any current sport and so it will just continue to grow. One of the big problems it's going to face is the sheer number of games the fanbase gets divied into. Personally I watch alot of SC2, but would never watch a different esport as I have no interest in any other games played competitively (for a variety of reasons from my playing SC back to 2002, to the way to watch it blows games like CSGO out of the water, to the skill cap being much higher than other games, IMO, etc).

 

[Pilky01]

Huh? It is just soccer with cars, how could you not follow it?

Like I said, I know exactly how RL works. I play it all the time. But I can't follow other people playing it, or really any "competitive" game.

I wonder if it isn't actually an age thing and I am just too old to follow and understand the action of competitive esports. Like how old people can't listen to music with distortion or dub-step or even just loud music....I understand what is being presented, but I am unable to interpret it as I take it in.

 

[superdeluxe]

Like I said, I know exactly how RL works. I play it all the time. But I can't follow other people playing it, or really any "competitive" game.

I wonder if it isn't actually an age thing and I am just too old to follow and understand the action of competitive esports. Like how old people can't listen to music with distortion or dub-step or even just loud music....I understand what is being presented, but I am unable to interpret it as I take it in.

I think it might be a generational thing. Kids/Young adults etc LOVE watching other people play games. Its obviously a thing, you have people who become multimillionaires because people watch them play games.

 

[Llama19]

The World's Most Valuable Esports Companies

Source: infogram.com/the-worlds-most-valuable-esports-companies-1hdw2jkzpwkx4l0

Reference article: www.forbes.com/sites/mikeozanian/2018/10/23/the-worlds-most-valuable-esports-companies-1/#28b60d3a6a6e

 

[Llama19]

Maple Leafs Forward Zach Hyman Launches Professional Esports Team

To quote:

"Toronto Maple Leafs forward Zach Hyman is launching his own esports company called Eleven Gaming. He is currently assembling a team of nine professional Fortnite players to compete in TwitchCon, a tournament offering $1.8 million in prize money that takes place Oct. 26-28 in San Jose, Calif.

Hyman, 26, told NHL.com that his company’s goal is to invest in gamers who are likely to win prize money at tournaments and also earn sponsorship money."

Source: www.sporttechie.com/maple-leafs-forward-zach-hyman-launches-pro-esports-team/

 

[Llama19]

Michael Jordan Enters Esports, Invests In Team Liquid's Parent Company

To quote:

"Team Liquid's parent company, aXiomatic, announced Thursday it raised $26 million in a Series C funding round. Two new investors join the ownership group: NBA legend and Charlotte Hornets owner Michael Jordan and David Rubenstein's family office, Declaration Capital.

The rest of the fund is made up of capital from existing investors, as well as aXiomatic's four co-executive chairmen—Golden State Warriors' co-owner Peter Guber, Oaktree Capital Management cofounder Bruce Karsh, Washington Capitals owner Ted Leonsis and Tampa Bay Lightning owner Jeff Vinik."

Source: www.forbes.com/sites/mattperez/2018/10/25/michael-jordan-enters-esports-invests-in-team-liquids-parent-company/#191a42526025

 

[Ceremony]

As far as the comments in this thread about not being able to follow games played like this are concerned, sim racing is to me the best example of something that can have a large crossover audience between real life motorsports and games, purely because of how similar they are. Gran Turismo Sport has a partnership with the FIA (the world's governing body of motorsport) and has ongoing online championships that anyone can compete in, with the higher ranked drivers competing in person. Here is the European final which happened last week:



I've no idea what sort of money is involved but as one of Sony's flagship franchises for the PlayStation, getting this sort of exposure and legitimacy is a good thing.

 

[Galactico]

Damn. I am 24 years old, been playing video games since 1998, I am really good at NHL and some other games. Always dreamt to be a pro athlete but less than 1% make it to the pros. Now at 24 it is basically too late to get there but bow you have this e-sport thing and anybody from 16 to 55 years old can compete and earn money. This is really interesting.

Anyone knows the process to become a pro gamer?

 

[Burke the Legend]

As far as the comments in this thread about not being able to follow games played like this are concerned, sim racing is to me the best example of something that can have a large crossover audience between real life motorsports and games, purely because of how similar they are. Gran Turismo Sport has a partnership with the FIA (the world's governing body of motorsport) and has ongoing online championships that anyone can compete in, with the higher ranked drivers competing in person. Here is the European final which happened last week:



I've no idea what sort of money is involved but as one of Sony's flagship franchises for the PlayStation, getting this sort of exposure and legitimacy is a good thing.

Yeah racing games would be a really good one for e-sport. People have loved racing competitions for thousands of years, but one problem with modern motor racing is safety concerns have made them a bit dull. It's also crazy expensive to get into. Digital competition solves both those issues.

 

[awfulwaffle]

Damn. I am 24 years old, been playing video games since 1998, I am really good at NHL and some other games. Always dreamt to be a pro athlete but less than 1% make it to the pros. Now at 24 it is basically too late to get there but bow you have this e-sport thing and anybody from 16 to 55 years old can compete and earn money. This is really interesting.

Anyone knows the process to become a pro gamer?

A lot of gamers use twitch. If you want to get known might be beneficial to look into that. Im assuming you just have to be really good, and get to know some of the other pros to get your foot in the door.

 

[Hoek]

Playing tournaments and getting noticed there probably helps. From there you can network your way into a team I assume.

 

[Llama19]

Why Esports Investors Have Gotten Punished

To quote:

"There is no denying the growth of Esports in terms of popularity and capital. But fund investors that have tried to make money in this industry are under-performing.

Take ETFMG Video Game Tech ETF (GAMR). Its top holdings include game publishers Glu Mobile, NCSoft and Take-Two Interactive Software and game and accessories retailer GameStop. GAMR's share price is up 37% since it launched a year ago, compared with a gain of 59% for the S&P 500.

The VanEck Vectors Video Gaming and eSports ETF (ESPO) started only a month ago but is already down 6.5%, more than twice the overall stock market's decline. Its largest positions are in Tencent Holdings (Internet-related products and services), Nvidia (graphics and artificial intelligence) and game publisher Activision Blizzard.

True, these funds have very short histories. But I believe there is a fundamental reason they are not doing well compared with other industries: The stocks in their portfolios either are too expensive or are losing money."

Source: www.forbes.com/sites/mikeozanian/2018/11/06/why-esports-investors-have-gotten-punished/

 

[Burke the Legend]

Why Esports Investors Have Gotten Punished

To quote:

"There is no denying the growth of Esports in terms of popularity and capital. But fund investors that have tried to make money in this industry are under-performing.

Take ETFMG Video Game Tech ETF (GAMR). Its top holdings include game publishers Glu Mobile, NCSoft and Take-Two Interactive Software and game and accessories retailer GameStop. GAMR's share price is up 37% since it launched a year ago, compared with a gain of 59% for the S&P 500.

The VanEck Vectors Video Gaming and eSports ETF (ESPO) started only a month ago but is already down 6.5%, more than twice the overall stock market's decline. Its largest positions are in Tencent Holdings (Internet-related products and services), Nvidia (graphics and artificial intelligence) and game publisher Activision Blizzard.

True, these funds have very short histories. But I believe there is a fundamental reason they are not doing well compared with other industries: The stocks in their portfolios either are too expensive or are losing money."

Source: www.forbes.com/sites/mikeozanian/2018/11/06/why-esports-investors-have-gotten-punished/

To be fair. Pretty bad timing to launch an ETF on those companies which have been washed down hard in the general tech sell-off starting a couple of months ago. Also buying these large video game makers is not the same as investing in e-sports so that's kind of a silly marketing gimmick. The direct e-sport money would be investments in teams, tournament organizer groups, e-sport arena owners, etc.

Again would be curious to see what kind of revenues and income one of these esport teams actually book. You can say it's high growth and high potential all you want but you gotta wonder if they are generating financials any bigger than a CHL or minor league baseball club, in which case writing a big 8 figure cheque is a bit dubious.

 

[FrozenJagrt]

Damn. I am 24 years old, been playing video games since 1998, I am really good at NHL and some other games. Always dreamt to be a pro athlete but less than 1% make it to the pros. Now at 24 it is basically too late to get there but bow you have this e-sport thing and anybody from 16 to 55 years old can compete and earn money. This is really interesting.

Anyone knows the process to become a pro gamer?

Pick a game with a booming competitive scene. Focus on it. Get really, really, really good to. The point where every time you play a ranked match, you're playing against pros. Make it known that you're looking to play professionally (message other pros, post it on social media, stream on Twitch) and pray.

Twitch and YouTube are a huge part of it. If you are extremely good at the game with an entertaining personality, the viewers will come. With viewers come sponsors. With sponsors come money.

The issue, however, is that there are millions of people around the world competing for a handful of spots. It's an extremely competitive field, being "pretty good" won't move the needle at all. If you're not top 75 in the world in your chosen game, you're probably not going pro.

 

[JerseyMike34]

The problem with eSports is that you aren't going to find many people 40+ sitting around watching it (male or female), and if someone 25-40 isn't already into the game, the presentation on these shows that I've watched are just crazy hard to follow. Overwatch is one of the worst, they don't explain enough and after about 5 minutes you've tapped out trying to care because of how it's broadcast.

I find CSGO the easiest to follow, but I did play (just for fun) years and years ago, but I find what's on screen easy to understand.

That being said, once the younger people get older, that won't be an issue. Newer games that come into the eSports world will always have a problem attracting viewers that haven't played the game because it's very very very hard to follow the situation or game play style.

I've racked my brain trying to figure out a solution to this, and I've come up with very very little.

 

[Llama19]

Esports Professionals, Team Owners Predict a Market Correction

To quote:

"Esports insiders are increasingly convinced that many team organizations are overvalued and a market correction is coming.

In the two years since traditional sports teams started acquiring esports organizations, faith in the long-term potential of video games has grown stronger. But pessimism about the short- and medium-term prospects of esports teams is also growing, as spending pressures grow faster than revenue. The terms at which some leading teams have raised additional investment capital appear divorced from standard business metrics.

Sponsorship revenue isn’t growing as quickly as hoped, and organizations lack the hard assets and control of intellectual property that sponsors want.

“When you’re seeing teams right now raising over $300M valuations on revenues under $25 [million], you’re kind of like, what?” said Jason Lake, the founder of compLexity Gaming, an organization acquired by Jerry Jones and John Goff in 2017. “I try to choose my words carefully, because no one’s more bullish about esports than I am. I just think good, old-fashioned common sense would go a long way here, because the revenue has still not caught up to the size of the demographic and eyeballs.”"

Source: esportsobserver.com/esports-market-correction/

 

[Llama19]

'Fortnite' Creator Epic Games Reportedly Earned $3 Billion In Profits in 2018

To quote:

"Fortnite costs nothing to play, but between the game's $10 seasonal Battle Pass and daily cosmetic items that cycle through the game's Item Shop, a majority of the game's 125 million players spend at least some real money on the game."

Source: www.forbes.com/sites/erikkain/2018/12/27/fortnite-developer-reportedly-earned-3-billion-in-profits-in-2018/#5ae4ee0c1c79

 

[Pilky01]

Interesting story out of the world of eSports. The person who was presented as the competitor was actually just a stand in for a different person who was playing the game behind the scenes. When the player showed up out of nowhere and got signed to a professional team the audience became suspicious and started digging around. The person stuck to their story for a while and got a lot of sympathetic media coverage but they have since admitted the whole thing.

This has always kind of seemed like an inherent flaw of eSports to me. I suppose this specific problem is completely neutralized when its an in person competition, but obviously not all competitive gaming takes place like that.

edit: Stealing this TL DR from the ResetEra forum.....

• On Dec 16, a Grandmaster account playing under the name Ellie suddenly appears at 4.5k elo rating landing her in top 10 on the ranked OW ladder.
• Players are curious who she is as both her Twitter and OW account are brand new, and everyone at the top knows each other. No one has ever heard of Ellie before.
• On Dec 22, Second Wind (Overwatch Contenders team, the minor Overwatch League) signs Ellie as a DPS player. Unlike other Contenders players, Ellie opts not to disclose her real name.
• Suspicions that Ellie is not actually the one playing on her account begin to foment. The main reason for this is her comms are all delayed, as though the headset were being passed over to another person. Popular stream and OWL pro Dafran suggests this. When Ellie duos with Punisher (the player suspected to actually be playing for Ellie) to dissuade suspicions, her gameplay is noticeably worse.
• Because Ellie is a girl, she is harassed and threatened to be doxxed by members of the OW community.
• On Jan 2, Ellie steps down from Second Wind, citing "unforeseen reactions."
• Kotaku releases a scathing article about Ellie's harassment and subsequent stepping down, sending the story mainstream.
• On Jan 4, Punisher, a top 500 ladder player, confesses that he was the only one playing on the Ellie account and that it was a "social experiment."
• Second Wind claims that they had no knowledge of this and were duped.
• Blizzard is currently meeting with Second Wind.

A second theory is that it was a stunt orchestrated by Second Wind.

• On Dec 14, Second Wind team captain Haku tweeted disparaging remarks about female players, saying they did not belong in his 4.5k elo games.
• On Dec 15, Haku apologizes.
• On Dec 16, the Ellie account is born. Her first tweet is to post her 4.5k elo rating.

I want to believe that second theory!

But seriously, that is what I think will be a major hurdle for any kind of "eSports Teams", what is to stop any old con artist from starting their own team and competing against legitimate ones?

 

[NorthCoast]

'Fortnite' Creator Epic Games Reportedly Earned $3 Billion In Profits in 2018

To quote:

"Fortnite costs nothing to play, but between the game's $10 seasonal Battle Pass and daily cosmetic items that cycle through the game's Item Shop, a majority of the game's 125 million players spend at least some real money on the game."

Source: www.forbes.com/sites/erikkain/2018/12/27/fortnite-developer-reportedly-earned-3-billion-in-profits-in-2018/#5ae4ee0c1c79

esports works when there is an existing audience to watch the game. People will watch ninja play fortnite because they can't watch someone running around slaughtering people in real life and hopefully don't want to see that in real life.

I see esports of real competitive "not available in real life experiences" to continue to take off.

I see esports versions of real sports failing hard.

 

[Llama19]

As Esports Grows, Experts Fear It's A Bubble Ready To Pop

Source: kotaku.com/as-esports-grows-experts-fear-its-a-bubble-ready-to-po-1834982843

 

[Past Considerations]

esports works when there is an existing audience to watch the game. People will watch ninja play fortnite because they can't watch someone running around slaughtering people in real life and hopefully don't want to see that in real life.

I see esports of real competitive "not available in real life experiences" to continue to take off.

I see esports versions of real sports failing hard.

I agree. Whether it is EA FIFA, EA NHL etc. or some racing game or "racing sim", they lack 99% percent of what makes real life equivalent interesting to follow. And obviously the physicality or athleticism is almost completely missing. This is perhaps most obvious with the racing games/sims as they attempt to replicate real life motorsport in a more realistic manner. Why should I watch that when I can watch real thing instead.

There are competitions for those sports games, but the leagues and money prizes are small. All of these big tournaments or leagues are dominated by strategic games, Fortnite-like games and the good old Counter-Strike. These are all games based in fantasy worlds with pure-game mechanics.

 

[LadyStanley]

Impact of 'Tfue' suing FaZe Clan on esports industry

SI looks at one aspect of esports. One star is suing over his exclusive contract, especially the 80% cut the promoters are taking and his inability, even though classified as an independent contractor, to do certain promotional activities if not approved.

 

[awfulwaffle]

Impact of 'Tfue' suing FaZe Clan on esports industry

SI looks at one aspect of esports. One star is suing over his exclusive contract, especially the 80% cut the promoters are taking and his inability, even though classified as an independent contractor, to do certain promotional activities if not approved.

I dont get it, he signed a contract and is now suing them?

 

[LadyStanley]

I dont get it, he signed a contract and is now suing them?

Yep. Especially as they didn't allow him one of the endorsements he negotiated. (Plus that pesky 80% they're taking on one income stream.) He's not an "employee" but an "independent contractor".

Thing is, the guy signed when he was a relative unknown and now is well known.

There are also some company-selected extensions (with little to no increase in $$/%) to contract.

(IOW he didn't have a good lawyer review before signing.)