The eSports Industry's Rapid Rise Attracts Broadcasters Eager for Viewers
FinancialBuzz.com News Commentary
NEW YORK, July 24, 2019 /PRNewswire/ -- The emergence of the eSports industry has captivated hundreds of millions of people worldwide. In 2018, the industry's total viewership count reached nearly 400 million people as, throughout the world, viewers tuned in on cable and OTT platforms to watch professional gamers play their favorite games. Some of the most popular eSports games include Starcraft, Street Fighter, Super Smash Bros, Counter Strike, Dota 2, and League of Legends. And while these are some of the top-grossing eSport games worldwide, viewership for each game tends to vary in different regions around the world. For instance, South Korea and China have a large fanbase for multiplayer battle arena games like League of Legends and Dota 2, while the U.S. is more attracted to multiplayer battle royale games such as Fortnite and PlayerUnknown's Battlegrounds. Meanwhile, European countries such as Sweden and Poland have popularized first-person shooters like Counter Strike. Passionate and enthusiastic gamers have even banded together and created their own organizations to compete at a professional level against other top players. eSports teams such as Team Liquid, Evil Geniuses, OG, and Fnatic rank among the top teams in terms of highest overall earnings and while some teams may specifically focus on one game, others have expanded their organization to build teams across various gaming franchises. For instance, OG solely focuses on Dota 2, but organizations like Team Liquid have built teams across games like League of Legends, Hearthstone, Counter Strike, Dota 2, Fortnite, and Apex Legends. Team Liquid's involvement in diverse market segments led it to earn nearly USD 28.68 Million in earnings in 1,571 total tournaments. However, according to industry experts, earnings from tournaments are not the primary driver of the eSports market. Predominantly, sponsorships accounted for the majority of the eSports revenue in 2018. And as the industry continues to grow, it is expected that more sponsorships and brand deals will be signed. According to data compiled by PricewaterhouseCoopers, the global eSports revenue reach USD 805 Million in 2018. By 2022, the market is expected to reach USD 1.58 Billion by 2022 while registering a CAGR of 18.4%. UMG Media Ltd. (TSX-V: ESPT), Sea Limited (NYSE: SE), HUYA Inc. (NYSE: HUYA), Glu Mobile Inc. (NASDAQ: GLUU), Enthusiast Gaming Holdings Inc (OTC: EGHIF) (TSX-V: EGLX)
PwC noted that majority of the eSports revenue in 2018 derived from sponsorships. By segment, sponsorships delivered revenues of USD 277 Million, followed by media rights and streaming advertisements. While sponsorships accounted for the majority of the total revenue, PwC believes that the growth rate of media rights is expected to surpass that of sponsorships. By 2022, PwC highlighted that media rights revenue would grow by 11.5% to roughly USD 449 Million, while sponsorship and advertising revenue will grow at a rate of 5.5%. The growing eSports viewership has prompted many media companies to sign agreements and deals with prominent organizations to be able to broadcast tournaments. For example, one of the biggest deals is The Overwatch League, with Twitch paying a reported USD 45 Million per year. While Twitch is the dominant streaming platform for eSports viewers, others have also ventured into the industry. Additionally, other media companies such as YouTube and ESPN have also incorporated tournaments onto their channels. Meanwhile, The English Premier League has also expanded into competitive gaming by launching its ePremier league. Overall, as audiences grow, viewers will want to be able to watch their favorite games and tournaments anywhere, whether it's on their computers, phones, or televisions. Furthermore, as broadcasting companies claim media rights to eSports events, it is expected to also directly benefit advertising revenues. Paul Verna, Principal Analyst at eMarketer, explains: "Marketers who try to reach esports fans through video ads will be able to tap into the sophisticated targeting and measurement capabilities that streaming services offer. In that sense, there's more value to a marketer in attaching itself to game streams than sponsoring an event or team. It's all about harnessing data."
UMG Media Ltd. (TSX-V: ESPT) just earlier this morning announced breaking esports news that, "The summer of 2019 started off hot for UMG and Keemstar, as they have brought back the largest influencer series ever, Friday Fortnite. Millions of viewers each week tune in to watch the UMG casters cover the world's most popular streamers and pro players as they face off in teams of two to claim the top prize. Names like Ninja, DrDisRespect, TimTheTatMan, and more have shown support of the series by participating. The series has attracted sponsors like GFuel, HyperX, Pink City, and more bringing in over US$150,000 in sponsorship revenue over the course of six weeks. The series has had more than 30,000,000 live views when combining all the streams that are highlighted. UMG's own Twitch channel, www.twitch.tv/umgevents, has been averaging almost 20,000 concurrent viewers.
With the success of Friday Fortnite, Keemstar and UMG have recently expanded to another one of the hottest games in the world, Minecraft. Like Friday Fortnite, influencers compete against one another each week for prizing, but this time there's a twist: Minecraft Monday features multiple game modes, requiring influencers to perform well in many different situations. Chaos ensues, and it makes for a great viewing experience. The Monday series has had more than 10,000,000 live views when combining all the streams that are highlighted. UMG's own Twitch channel, www.twitch.tv/umgevents, has been averaging approximately 3,000 concurrent viewers. Unlike UMG's other series, Minecraft Monday has not only a private server for these matches, but a public server where thousands can join in and play the same game modes and maps that they see in the series. UMG also has the advantage of being able to add sponsor branding inside the game itself, consequently, exposure for our sponsors not only goes to our stream viewers, but to the participant's streams as well.
Keemstar and UMG are continuing to pave new roads in the gaming and entertainment industries, and the future is looking bright with further expansion of the UMG Network. The UMG website is booming with 1,300,000 users, and over 14,0000,000 sessions in the last three months. Week after week, hundreds of thousands of viewers return to watch their favorite players, interact on the UMG site, participate in giveaways, and chat with their friends as they watch the action. UMG will continue to push forward and innovate in the space, and Keemstar' s popularity and following will only continue to grow. Together, we will continue to bring the very best content to our viewers and fans."
About UMG: UMG is a premier esports company in North America. UMG has operations involved in live tournaments, online esports contests, casino esports operations, creation and distribution of original content and esports tournament operations through its proprietary tournament management app. Readers can learn more about UMG and its esports offerings at www.umggaming.com."
For our latest "Behind the Buzz" Corporate Snapshot Show featuring UMG Media Ltd., please head over to: https://www.youtube.com/watch?v=BAXCXDHsAR4
Sea Limited (NYSE: SE) aims to better the lives of the consumers and small businesses of its region with technology. Sea Limited recently announced its financial results for the quarter ended March 31st, 2019. Sea Limited's total revenue increased by 126.9% to USD 351.9 Million in the first quarter of 2019 from USD 155.0 Million in the first quarter of 2018. Sea Limited's total adjusted revenue increased by 193.8% to USD 578.8 Million in the first quarter of 2019 from USD 197.0 Million in the first quarter of 2018. These increases were mainly driven by the growth in each of the segments detailed as follows: Digital Entertainment: Revenue increased by 56.7% to USD 173.4 Million in the first quarter of 2019 from USD 110.7 Million in the first quarter of 2018. Adjusted revenue increased by 169.3% to USD 393.3 Million in the first quarter of 2019 from USD 146.0 Million in the first quarter of 2018. This increase was primarily due to the increase of our active user base as well as the deepened paying user penetration as we continue to improve the bring new and engaging content to our users and enhance the game and monetization features based on a deep understanding of local preferences and conditions as well as our strong efforts in eSports and community-building. Free Fire continued to grow and recently achieved more than 450 million registered users and more than 50 million peak daily active users from over 130 markets worldwide. According to App Annie, in the first quarter of 2019, Free Fire was the second most downloaded mobile game globally across the Apple App Store and Google Play Store combined and the top mobile game in Latin America by monthly active users and downloads. Sea Limited's inaugural Free Fire World Cup attracted more than 27 million online views in total and recorded peak concurrent viewers of over 1.1 million on YouTube. In April 2019, Sea Limited held its Garena World 2019, our region's largest eSports event, in Bangkok, Thailand. The event attracted approximately 270 thousand visitors, with total online views for the various tournaments topping 30 million.
HUYA Inc. (NYSE: HUYA) is a leading game live streaming platform in China with a large and active game live streaming community. HUYA Inc. recently announced its unaudited financial results for the first quarter ended March 31st, 2019. Total net revenues for the first quarter of 2019 increased by 93.4% to RMB 1,631.5 Million (USD 243.1 Million), from RMB 843.6 Million in the same period of 2018. Non-GAAP net income attributable to Huya was RMB 131.3 Million (USD 19.6 Million) for the first quarter of 2019, representing an increase of 94.1% from RMB 67.6 Million in the same period of 2018. Average mobile MAUs in the first quarter of 2019 reached 53.9 million, representing an increase of 29.8% from 41.5 million in the first quarter of 2018. Average MAUs in the first quarter of 2019 reached 123.8 million, representing an increase of 33.3% from 92.9 million in the first quarter of 2018. Total number of paying users in the first quarter of 2019 reached 5.4 million, representing an increase of 57.4% from 3.4 million in the first quarter of 2018. Mr. Rongjie Dong, Chief Executive Officer of Huya, commented, "We are pleased to deliver another record-setting quarter as our business continued the strong momentum from last year. Our overall traffic increased to record high levels. Notably, we are benefitting from our mobile strategy with promising results as Huya mobile MAUs in the first quarter of 2019 maintained a fast-growing pace, up 29.8% year-over-year and 6.3% quarter-over-quarter. We achieved year-over-year revenue growth of 93.4% to over RMB1.63 billion in this quarter, further demonstrating our strong growth trajectory. With a sustainable business roadmap in-hand, we will execute aggressively on our monetization capabilities across multiple fronts to fortify our leadership in China's game live streaming industry. By deploying new technologies and entering into new overseas markets, we believe we are well positioned to extend our business territories and achieve sustainable growth in the long term."
Glu Mobile Inc. (NASDAQ: GLUU) is a leading creator of mobile games. Glu Mobile Inc. recently announced the availability of MLB Tap Sports Baseball 2019 on the App Store and Google Play. Additionally, Glu has reached agreements to extend the company's partnership with the MLB and MLBPA through 2024. In collaboration with Major League Baseball (MLB), the Major League Baseball Players Association (MLBPA) and Boston Red Sox outfielder Markus Lynn "Mookie" Betts – MLB Tap Sports Baseball 2019 is back to offer players 24/7/365 baseball action. "As one of Glu's leading Growth Games, the Tap Sports Baseball franchise has delivered impressive year-over-year bookings growth for Glu," said Nick Earl, Glu President and Chief Executive Officer. "As we continue to invest in our partnerships with MLB and MLBPA, the team consistently delivers a refined and enhanced experience for players."
Enthusiast Gaming Holdings Inc (OTCQB: EGHIF) (TSX-V: EGLX), founded in 2014, is the largest vertically integrated video game company and has the fastest-growing online community of video gamers. Enthusiast Gaming Holdings Inc. recently announced through its subsidiary, Enthusiast Gaming Live Inc., that it had partnered with MSI to be a prize sponsor at Enthusiast Gaming Live Expo ("EGLX") in October 2019. MSI is a world leading gaming brand, and one of the most trusted hardware providers in gaming and esports. EGLX will be hosting a number of smaller sub tournaments throughout the expo including popular games such as Fortnite, Apex Legends and Super Smash Brothers. These drop-in tournaments will allow the general attendees to compete with other players and the tournament champions will receive various cash and MSI prizes such as well as MSI gaming chairs, personal computers, monitors and laptops. MSI will also be showcasing their latest products in their activation booth. Melanie Azagury, Manager, EGLX, commented, "As EGLX continues to grow, we continue to engage and partner with the leading brands in the industry. Our goal at EGLX is to provide the best in-person experience for our gaming communities, fans, and competitors, and the partnership with MSI enables us to include the most sought-after gaming hardware to our growing prize pools."
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