AFK Weekly: Goodbye Until Next Time!
Hello everyone! It is with great sadness that I share that this is the last edition of our weekly Esports Business Insights newsletter. When we started this newsletter, we had several lofty goals: We wanted to be the go-to source for content about esports business and enrich your inboxes with valuable content that you might be willing to pay for. Unfortunately, we’ve fallen short of our targets and hence have made the difficult decision to close shop for the moment.
It has truly been a pleasure working with James Fudge and Trent Murray on this project. I’ve learned so much about editing and copy-writing esports industry news from two masters of the craft, and hope to continue to do so from their future endeavors which include James’ People on the Move and The Fudge Retort newsletters. A huge thank you to all of our readers who have subscribed to the newsletter and have been part of this journey! Without your appreciation and support, we couldn’t have made it this far.
To that end, for one last time, let’s dive into the biggest and most impactful moves in the industry this week.
— Vignesh Raghuram, Supervising Editor, AFK Gaming
BGMI removed from India amidst fears of China Link
On July 29, Battlegrounds Mobile India (BGMI), the localized variant of popular esports title PUBG: Mobile that caters to Indian players, was removed from the Google Play Store and Apple App Store.
Reuters reported that the Indian government banned BGMI under a section of its IT law. The government can block public access to content under section 69A of India’s IT law, in the interest of national security, among other reasons. This was the same section that was used to ban PUBG Mobile, Mobile Legends: Bang Bang, Arena of Valor, and other esports titles in 2020.
According to a report from News18, BGMI was banned as a result of a report by a central intelligence agency and a communication from the Ministry of Home Affairs (MHA) to the Ministry of Electronics and Information Technology (Meity). A government official reportedly stated that the app has been communicating with servers directly or indirectly located in China which is the primary source of concern and put it under scrutiny.
AFK Gaming’s sources close to Krafton stated that the block is a suspension and not a ban on the game. The issue is currently under investigation, the outcome of which will determine whether the suspension gets lifted or is turned into a permanent ban of the game.
Following the block, Krafton’s share price plummeted by as much as 9% on the Korean stock exchange before recovering to 5.7% by the time the market closed for the day. The game’s publisher Krafton has invested over $100M USD in the Indian market, with reported plans to increase it to $140M this month. It was also reportedly open to investing an additional $100M in Indian startups this year.
Sean Hyunil Sohn, head of India division at Krafton, issued a statement assuring the public that the company has always been compliant with all regulations in India including data protection laws and that the company has been working with the Indian government to resolve any issues with the game.
Key Takeaway: BGMI was easily the biggest esports title in the country and the government’s move of removing it from the Google Play Store and App Store without prior warnings will likely cause a temporary recession in the country’s esports ecosystem. There will be a vacuum of events, while popular content creators and tournament organizers make a move towards other titles which could replace it.
With the obvious alternative, Free Fire, also being banned within the country, Indian esports will either have to make a shift towards PC games such as Valorant or titles from Western publishers such as Call of Duty Mobile or Apex Legends Mobile to fill the void. The ban also showcases the problems of the Indian esports industry over relying on any single title for viewership and player base. Perhaps this will incentivize the industry to promote multiple titles and cast a wider net when building the country’s esports infrastructure.
Misfits Gaming Group Sells LEC Spot to Team Heretics
Misfits Gaming Group (MGG) has sold its League of Legends European Championship (LEC) spot to Spanish organization Team Heretics and will be bidding adieu to the LEC next year. Additionally, Misfits will also be quitting from the Ligue Française de League of Legends (LFL), marking the organization’s departure from the competitive League of Legends scene at the conclusion of the 2022 season.
Neither team has disclosed financial information about the deal. However, Misfits confirmed that the transaction will go into effect for the 2023 season with MGG remaining a minority partner in the team.
Riot Games has affirmed that MGG is entitled to all proceeds from the transfer of its right of participation in the league and that the LEC will not receive any of the proceeds related to the transaction. This move comes as MGG continues the expansion of a larger strategy to invest more in creators alongside esports. However, the organization confirmed that it will continue to field its teams in Overwatch, Call of Duty, and Valorant.
Key Takeaway: Historically, the sale of an LEC slot has meant little for the competitive success of the new team or the results of the region internationally. Astralis and BDS remain bottom-tier teams with little sign of a commitment to the kind of spending or long-term infrastructure that would result in competitive success. Still, the numbers keep going up for the league and League of Legends as a whole remains overwhelmingly the most successful esport on the planet. Ultimately, the sale by Misfits likely says less about League of Legends or the LEC and more about the value of streamlining your brand in a single region rather than trying to find sponsors for a European franchise alongside your Florida teams.
Quick Shots
Riyadh will host an esports and gaming forum that will bring together sector leaders and experts from around the world to discuss and collaborate for the development of the esports ecosystem. The forum will include key leaders from British Esports, Global Esports Federation, GGTech, Africa Esports Development Federation (AEDF), and Esports Entertainment Group.
Southeast Asian organization Boom Esports has partnered with PC hardware brand AMD. The hardware manufacturer will provide hardware and collaborate with Boom Esports on content for its Dota 2 and Valorant teams.
FaZe Clan has launched a new activation with food delivery platform DoorDash called “FaZe Subs.” Sandwiches inspired by various FaZe members will be made available on the food delivery app as a result of this collaboration.
U.K.-based Guild Esports has added performance technology manufacturer Hyperice as its partner as part of a one-year deal. Hyperice will gain exclusive naming rights to Guild’s recovery room situated within its headquarters and will provide its recovery and wellness technology for the organization’s players.
Canadian esports and entertainment company X1 Esports has agreed to buy Rocket League esports news outlet ShiftRLE. X1 Esports will purchase the entirety of ShiftRLE for $50K in cash with ShiftRLE’s four key personnel also receiving 333.33K of X1 Esports’ common shares. A 7% share of gross revenues Shift earns in the first 36 months following closing to a maximum of $250K will also be distributed to the group.
Wild Rift has introduced The Wild Circuit 2022 as the official off-season esports tournament in Brazil, China, LATAM, North America, and SEA/Korea/Japan. Competitions will take place from July 18- 23, which will be Wild Rift's off-season and will be hosted by third-party organizers who will receive operational and prize pool support from Riot.
