ESports is no longer a secret. Every week there's a new report detailing how big the industry can really be, but there's also an elephant in the room. Startups and third-parties are finding it hard to identify their segment of the space and monetize, due to a complex relationship with the companies who create the actual games—the publishers.
Edward Chang: The Missed Opportunity for Publishers and Platforms
1. The Missed Opportunity for
Publishers and Platforms
Ed Chang
EIR, The Chernin Group
@ed_chang
2. 2
Esports vs. Traditional Sports
Organizational
Model
Description Traditional Sports Esports Titles
Decentralized • Independently organized competitions
• Sanctioned and governed by an administrative
body
• Open to any qualifying athlete
Standard
Leagues
• Set number of recurring teams and players
• Exclusively managed by league front office that
is collectively owned by each team
Heavily
Centralized
• Administrates all professional and competitive
play worldwide
4. 4
How Did We Get Here?
“It’s a significant investment that we’re not making money
from. It’s an investment into the game, for our fans, just like
we’d invest in any other feature within the game. It’s a
worthwhile thing for us to do because it’s such a high quality,
engaging experience for our fans.”
12. 12
How Did We Get Here?
Open APIs
Control over media rights
Monetization avenues
13. 13
Case Studies: Tech
$80MM fund for supporting new integrations
AppExchange generates 2.8x revenue of
Salesforce
14. 14
Case Studies: Valve
• Steam Workshop: 125,000 CS:GO items, 50,000 DOTA2 items
• Ecosystem succeses: FaceIt ($15mm series A), ESEA (acquired by ESL),
Kickback (YC W15)
• Robust competitive circuit: Eleague, ESL, FaceIt, top salaries
• CS:GO items economy: At one point >$7bb yearly transactionvolume
15. 15
Case Studies: Twitch
Features created or inspired by 3rd
party ecosystem:
• Bits, preceded by Streamlabs and
StreamTip
• Clips, preceded by Oddshot, Plays.tv
and Forge
• Subscriptions / Partner Program and
3rd-party services (Revlo, Gamewisp
and Curse/Discord integrations
• TwitchPlays
• Chatbots (Moobot, Nightbot and
Xanbot)
Snapshot of the publisher revenue in December 2013 in MMs – not hard to see why esports is an afterthought
Then amazon buys twitch in august of 2014, for 1 billion dollars, built on the backs of all this esports content
ESL, the premiere 3rd party organizer of tournaments is then scooped up for $86mm by the Swedish media company MTG
Open APIs
Access to data streams, ability to build products on top of the original experience
Control over media rights
Need to ask publisher for the right to air, even for the right branding/logos/etc
Monetization avenues
Sports betting, illegal sponsors list controlled by publisher
SFDC
Market cap of $50BB
IDC estimates that the AppExchange generates 2.8x SFDC revenue!
Slack
1.25mm+ paying users
3.8bb valuation
Still recognized the need early for supporting new integrations
Howcan the brands in the audience get involved?
ADD YOUR EXPERTISE - ESPORTS HAS LONG BEEN DRIVEN BY PASSIONATE INDIVIDUALS, GENERALISTS, BUT TO REALLY MOVE FORWARD THE INDUSTRY WE NEED SUBJECT MATTER EXPERTS
Eleague – production
WME|IMG – sponsorships
Big Ten – collegiate sports
Pinnacle sports – just took their 5 millionth esports bet, first one was taken in 2010