AFK Weekly: Newsom meddles while Tencent runs interference
Hello everyone! This week saw the California Department of Fair Employment and Housing (DFEH) lose two of its lawyers in its ongoing gender discrimination lawsuit against Activision Blizzard amid accusations of interference by the state’s governor Gavin Newsom. According to Bloomberg, the governor abruptly fired the agency's Chief Counsel Janet Wipper, followed by her assistant Melanie Proctor resigning in protest. This firing comes after the two lawyers stepped down from the lawsuit earlier this month without explanation.
In an email sent to staff, Proctor alleged that Newsom’s office “began to interfere” with the Activision lawsuit in recent weeks. “As we continued to win in state court, this interference increased, mimicking the interests of Activision’s counsel,” she claimed. In response to the allegations, Newsom’s spokeswoman Erin Mellon denied claims of interference by the governor’s office, stating that they were “categorically false.”
Wipper’s resignation is no doubt a big blow to the DFEH–under her leadership, the department successfully sued Riot Games, forcing it to pay $100M USD in a sexual discrimination lawsuit that was settled in December 2021. The big takeaway is that when politicians get involved in anything it opens the door for conversations about the power of political donations; for example, on Thursday Politico reported that an Activision Blizzard board member donated $100K to Newsom’s campaign–perhaps explaining his keen interest in the ongoing lawsuit.
- Vignesh Raghuram, Supervising Editor, AFK Gaming
China's Tencent will block access to foreign/unapproved games
Chinese tech giant Tencent is shutting down one of its services that allows Chinese gamers access to overseas platforms to play online games. According to Reuters, the company will release an update to its “games speed booster” mobile and desktop apps on May 31, which will disable users’ access to foreign games. The new version is expected to only support games that are licensed in China.
This move from Tencent comes amidst China’s heightened regulatory scrutiny over the videogame industry, which reportedly resulted in 14,000 gaming-related companies going out of business and mass layoffs. Earlier this week, China’s National Radio and Television Administration also banned live streaming of unauthorized video game titles, stating that livestreamers should resist "abnormal aesthetics" and harmful celebrity fan culture.
Key Takeaway: At the end of the day, Tencent is making the only play that it can–it must bend to the will of the Chinese government if it wants to conduct business in the country and avoid future punitive regulatory actions; Perhaps it learned its lesson last year when it spent millions of dollars to merge multiple streaming services it had a controlling stake in only to have the government oppose it.
Rogue and London Royal Ravens parent ReKTGlobal to be acquired for $470M
Metaverse company Infinite Reality has announced that it has reached a deal to purchase esports company ReKTGlobal in a $470M all-stock deal based on an equity valuation of Infinite Reality for $2B.
The deal will integrate ReKTGlobal’s esports properties into Infinite Reality’s existing creative tools for social, gaming, and the metaverse. This includes its esports team franchises (Rogue and London Royal Ravens), marketing and partnership services, talent management, and technology products.
Despite the acquisition, ReKTGlobal will continue to operate independently but will now have access to Thunder Studios, a massive studio in California that has been used for music videos and running esports events in the past.
Key Takeaway: The RekTGlobal - Infinite Reality deal is an interesting one, as it is the first time (to our knowledge) that a “metaverse/Web 3.0 company” has purchased a gaming and media company whose major components include two professional esports organizations. It is unclear, beyond RekTGlobal’s content creation and events capabilities, how Rogue and London Royal Ravens fit into the whole “metaverse equation.”
Honor of Kings is currently the highest grossing mobile game worldwide, generating $272.4M in player spending in March 2022 (a 5.8% YoY increase), according to Sensor Tower. PUBG Mobile is the second highest, generating $199.8M globally in the same period.
BLAST Premier has partnered with A.P. Moller - Maersk in a deal that will see the logistics company sponsor the tournament series for the remainder of the 2022 CS:GO season.
Food delivery company Just Eat has partnered with EXCEL ESPORTS. In addition to the former’s logo being featured on the team’s jerseys, the two companies will co-create digital content.
Activision Blizzard has fully absorbed game studio Vicarious Visions, the makers of the Crash Bandicoot N. Sane Trilogy and Tony Hawk's Pro Skater 1+2. The Vicarious Visions brand will be defunct moving forward.
YouTube streamer Ludwig has partnered with Epic Games to host multiple Fortnite tournaments with a $100K total prize pool.
Philadelphia Sixers Innovation Lab has opened a $25M fund to invest in various businesses, including companies involved in esports and gaming.
In a court hearing, two California appellate judges told NetEase that it faces an "uphill battle" to challenge Korean rival PUBG Corp.'s preliminary injunction following claims that two of NetEase's mobile games infringed on its copyrights and trade dress, according to Law360.
A Riot Games dev revealed on Twitter that the long-awaited League of Legends MMO might not ship. The title’s head dev, Greg Street shared that there was no guarantee this game will ship but added that his team was “optimistic” and was trying its best to bring it together.
Evil Geniuses announced plans to build a new, full-service studio for its content creators. It will be used to support the Creator Collective, which comprises various content creators from TikTok and Twitch.
The Call of Duty League has extended its partnership with game controller manufacturer SCUF Gaming, signing a new two year deal that will see the latter become the league’s exclusive controller and controller accessory partner.
Belong Gaming Arenas (BGA) has partnered with Overwatch League’s Houston Outlaws for the upcoming Battle for Texas Overwatch League event. As part of the collaboration, a special gaming area at the event featuring PCs and peripherals similar to those found in BGA’s gaming arenas across the U.S. will be set up. The partnership aims to offer fans a chance to try the PvP beta version of Overwatch 2 during the event, according to a release.
People on the Move
It was a busy second week in April as people left comfortable jobs to find adventure in new ones or were promoted to new roles. On a personal note, I would like to congratulate my former colleagues Tomek Borowka and Victor Frascarelli–two of the best people I have ever worked with–on finding new roles. Now onto this week’s movers and shakers:
Former Activision Blizzard and Groupon executive Kartik Ramachandran joins Notarize as CFO.
Kristen Hines joins Activision Blizzard as its new chief diversity, equity, and inclusion officer.
Tomek Borowka exits Sports Business Journal to join Riot Games as esports product manager - VALORANT Regional Leagues.
Kadri Harma is appointed to the role of CEO of Savvy Gaming Group's Savvy Ecosystem Company.
Yannick Theler has been named CEO of Savvy Gaming Group's Savvy Games Studios.
Jerry Gamez has been named the CEO of Savvy Gaming Group’s infrastructure company.
Peter Shawki leaves PUBG Corporation to join Playtonia Esports as its new head of operations.
Adam Mackasek left his role as lead producer - Wild Rift global events at Riot Games on Friday.
Francis Thai joins Vindex as VP of digital marketing.
Philip Kirsch leaves Unity to join Samsung as its new head of marketing - gaming.
Carolina Bondioli joins BAYZ as director of content.
Nathália Esteves Bastos joins BAYZ as head of community.
Jota Junior joins BAYZ as director of partnerships.
Vinícius Junqueira joins BAYZ as its new director of global PR and communications.
Daniel Intrater joins eFuse as chief of staff, partnerships.
Oshin Tudayan joins Riot Games as the new social media strategist for the player community.
Former SBJ reporter Victor Frascarelli joins Esports Insider.
Alicia Kim Markham exits Capcom to join Microsoft's Xbox division as its new senior communications manager.
Brendan Quock joins Cloud9 as a marketing consultant.
Attorney Darius Gambino has been named industry chair of Sports and Entertainment (which includes esports) at Saul Ewing Arnstein & Lehr LLP.
Kadi Chow has been promoted to recruiter at Riot Games.
Taylor Gach joins NASCAR as director of gaming and esports.