AFK Weekly: French President Macron Endorses Esports
Hello everyone! The presence and importance of the esports industry is gradually growing amongst the ruling class. In an interview with thebigWhale, French president Emmanuel Macron expressed that France is a “great video game nation” recognized for the quality and dynamism of its industry and acknowledged that esports and gaming were an “important component of French soft cultural power.”
The incumbent in the ongoing 2022 French presidential election also mentioned esports organizations Team Vitality or Karmine Corp as a mark of “French excellence,” and expressed his intent to establish a link between the Olympics and international esports tournaments. “We have a historic opportunity: the 2024 Olympic Games,” said Macron. “It is up to us to take full advantage to establish a link between the two worlds’ Olympiads by hosting the world's greatest esports events: CS:GO Majors, Worlds of League of Legends and The International of Dota 2.”
While this acknowledgement is certainly a sign of growth and good things for the esports industry, this maneuver could just be a political ploy to pander to the youth in the country. According to data from Harris Interactive, Macron has struggled with young voters who were much more inclined to vote for his competitors Marine Le Pen and Jean-Luc Mélenchon.
With a showdown against far-right leader Le Pen in the second round of the presidential election on the horizon, the French president is perhaps turning towards esports enthusiasts to help turn the tides.
- Vignesh Raghuram, Supervising Editor, AFK Gaming
Esports to generate $1.38B USD in Revenues by the end of 2022
According to the 2022 Global Esports and Live Streaming Market Report from data firm Newzoo, the esports industry is forecasted to hit $1.38B in 2022. China is expected to account for nearly a third of this revenue growth, with the fastest growing regions for 2020-2025 being Southeast Asia (27.6%), Central Southern Asia (23.4%), and Latin America (19%).
Sponsorships continue to be the industry’s highest-grossing revenue stream, accounting for nearly 60% ($837.3M) of total revenues. Nonetheless, publisher fees ($130.7M, up 52.6%) and merchandise and ticket sales ($107.9M, up 66.8%) are also soaring. With esports organizations also diversifying their revenue streams by exploring other non-traditional methods including direct-to-fan monetization, digital merchandise and NFTs, loyalty schemes, traditional investment, and educational programs, we can expect the over-reliance on sponsorship revenues to decline significantly.
Newzoo has also projected that the global esports audience will grow by 8.7% to reach 532M by the end of the year. Just over 261M among them will be esports enthusiasts who watch esports content more than once a month, each generating $5.30. The number of esports enthusiasts is projected to grow to 318M in 2025, with a CAGR of +8.1% (2020-2025).
Esports enthusiasts represent an appealing segment for consumer brands since 74% are employed full-time (compared to 56% of the general online population), and around 44% are high-income earners (compared to 33% of the general online population).
Key Takeaway: The rapid growth of mobile esports is a key driver for emerging markets like Southeast Asia and Latin America. With more mobile ports of top tier esports like Valorant and Apex Legends on the way, that growth should only accelerate.
Allied Esports gets NASDAQ delisting warning
NASDAQ has notified Allied Esports Entertainment that it is not in compliance with the periodic filing requirements to maintain its listing in the index. This is a result of the company not filing its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2021with the Securities and Exchange Commission by the required due date.
Allied Esports Entertainment now has 60 days to submit a plan to regain compliance with the NASDAQ regulations. NASDAQ may accept the company's plan and grant an exception of 180 calendar days from the due date of the Form 10-K to regain compliance. However, if the company fails to regain compliance with the regulations within this period, its shares will be delisted which means that shareholders will not be able to freely buy or sell Allied Esports stock on the index. The company’s filing could have been delayed due to its sale of its World Poker Tour business to a third party in July 2021.
In an announcement made on March 30, Allied Esports Entertainment said it would not be able to file its Form 10-K for 2021 by the original deadline of March 31, 2022 due to additional time needed to complete the audit and hence received an extension until April 15. According to the announcement, the form was expected to be filed by the new deadline.
The company’s shares were down by 2.78% today, at the time of writing.
Key Takeaway: Allied Esports has struggled to generate significant revenues outside of the divestment of World Poker Tour in an all-cash transaction for $105M in July of 2021 to Element Partners (Q3 2021). In Q2 2021 it posted a “loss from continuing operations for the quarter was $4.3 million” due in part to COVID-19 restrictions limiting its esports venue operations revenue, among other challenges, and in February, Libing Wu resigned as CEO. The company has not filed its FY 2020 results or its Q4 results as of this writing, so we don’t know how much revenue it has generated in recent months, and this failure to file forms with NASDAQ is not a great sign of leadership or its financial health as a company.
Chinese esports organization LGD Gaming has announced a partnership with condom brand Jissbon, providing co-branded condom boxes via online shopping portal Taobao. An advertisement on Jissbon's Taobao ecommerce website features all five members of the organization's Dota 2 team PSG.LGD.
PGA Tour golfer Jon Rahm has invested in Boston Uprising and Boston Breach franchise owner Oxygen Esports, leading its Series A round. He joins the likes of the Kraft Group, Danny Ainge (Former NBA player), and Rob Gronkowski (Former NFL player), alongside Banner Ventures, as an investor in the organization.
Heroic has acquired the BLAST Premier member slot from Immortals Gaming Club, the owner of MIBR. As a result, Heroic will now receive automatic invites to BLAST Premier tournaments instead of MIBR.
Free Fire teams from India and CIS regions will not be competing at the $2M Free Fire World Series 2022, which is scheduled to be held in Singapore. The game has been banned in India since February, with the country's national leagues being suspended as a result.
OverActive Media’s MAD Lions has exited competitive CS:GO by moving all of its active players and staff to the transfer list, just ahead of its move to Valorant. OverActive Media announced the closing of its CS:GO division on the same day it reported a loss of $15.4M in its fourth-quarter 2021 results.
Blizzard Entertainment president Mike Ybarra has stated that the company is not exploring NFTs after reports of a survey put together by market research firm YouGov gauging player interest in the crypto entity began circulating online. “No one is doing NFTs,” he tweeted, denying rumors the game publisher would join the play-to-earn bandwagon.
LA Galaxy and Mexican soccer star Javier “Chicharito” Hernández has joined Complexity Stars to create content and host events to better engage with his fans off the pitch, according to a release. He joins eight other notable athletes like J.R Smith (NBA player), Leonard Fournette (NFL player), and Max Holloway (UFC fighter) as a part of the Complexity Stars program.
Chinese esports organization Royal Never Give Up (RNG) has partnered with Chinese beverage manufacturer Wahaha. The two companies are promoting Wahaha's soda water line on social media.
Naraka Bladepoint has announced its first esports league The Naraka Bladepoint Pro League, which features an RMB 5.2M ($800K) prize pool for its two-season franchise format. The league will feature 20 regular teams and four temporary slots. Weibo Gaming, Jing Dong Gaming, Wolves, FunPlus Phoenix, and Swedish esports organization Alliance are some of the notable organizations who have already purchased a slot in the franchised league.
Modern Times Group has closed the sale of ESL Gaming, generating net proceeds of $875M from which at least 40% will be returned to shareholders through a combination of a share redemption and a share buyback program. The company also announced plans to continue its journey as a global mobile gaming company with a diversified portfolio of games.
Activision Blizzard has been cleared of an investor-led class action lawsuit accusing the company of misleading investors about federal and state investigations concerning sexual harassment and gender discrimination.
Bangladesh’s High Court has dismissed a plea from Singapore-based developer of PUBG to unblock the game in the country. PUBG, Garena Free Fire, and other games deemed “destructive” by the court, have been banned in the country since August.
NBA 2K League will continue to be streamed in India by Loco. The multi-year partnership aims to drive awareness and grow the NBA 2K League community in India.
The LPL's representative for the League of Legends Mid-Season Invitationals 2022 will compete remotely from the team’s facilities or the LPL's Shanghai arena due to travel restrictions caused by COVID-19 lockdowns.
People on the Move
ESL Gaming is doing something that is very good for workers who have been displaced by Russia’s ongoing invasion of Ukraine–the company has set up a fast-track system for anyone applying for a job at the tournament organizer to get them in jobs as quickly as possible. More companies–whether endemic to esports and gaming or not–should be doing everything they can to help the citizens of Ukraine in these dark and uncertain times. You can learn more about the initiative here.
Now on to this week’s movers and shakers in the games and esports industries:
James White is promoted to general manager of the Houston Outlaws.
Catarina Macedo, lead product manager for Wild Rift at Riot Games, will leave the company at the end of the month.
John Reseburg is promoted to the role of VP of global communications for EA SPORTS & Racing at Electronic Arts.
Aliana Miller formally announced that she has been working as the head of global influencer marketing at Riot Games since January.
Henry White has left a junior art director role at Fnatic to become art director at Arcade Media.
Xbox Head of Research and Design Chris Novak is leaving Microsoft after 20 years with the company.
Queens Gaming Collective co-founder Alisa Jacobs joins Galaxy Racer as its new chief strategy officer.
Former Guild Esports Creative Director James Stedman joins Nigma Galaxy as content director.
Jennifer Wong leaves Caesars Entertainment to join Gaming Community Network as its new VP of strategy and brand activations.
Jeff Cohen leaves his role as VP of corporate strategy at Esports Entertainment Group to join Homa Games as VP of corporate strategy.
Ryan Simms is promoted to the role of partnerships manager at Corsair.
Activision Blizzard has elected Substack exec Lulu Cheng Meservey to its board of directors, and nominated Bacardi exec Kerry Carr. Hendrik J. Hartong III and Casey Wasserman have chosen not to be up for re-election at the upcoming 2022 annual meeting.
Sahil Kulkarni has been promoted to the role of esports manager at Ubisoft Tokyo.
Robert Rames has been promoted to the role of VP of Canada at Enthusiast Gaming.
Shuchi Kulshreshtha has been promoted to the role of brand manager at Mobile Premier League.
Pauliina Artiola leaves Unity Technologies to join The Sandbox as creative lead.
Jean-Paul Hardy leaves 2K Games Benelux to join Gearbox Publishing Europe as general manager.
Zhorzh Zakaryan leaves his role as senior back end developer for Unikrn at Entain to join Reddit.
Michael Hollander exits Comcast-owned gaming network G4 to join Uber Eats as head of U.S. regional partnerships - East.
Former Esports Insider Events Project Director Charlotte Pierce joins Madison Fitness as the new director of experience.
James Watts joins BLAST Premier as the new tournament operations assistant.
Jon Llaguno joins virtual stadium platform Virtex as its new partnerships director.
Jason Cook has joined marketing agency We Are Royal as executive creative director, Loren Judah has been promoted to executive creative director, co-founder Brien Holman will step into the CCO role, while co-founder Jen Lucero takes on the role of CEO. War is deeply connected to the gaming industry and regularly works on marketing campaigns for Riot Games and Activision Blizzard, among others.
Daria Belous has left Esports Charts and is looking for new opportunities.
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