AFK Weekly: Riot Games Reinvigorates Esports Division, Activision CEO Under Fire
Week 3, November 2021
Hello everyone! This week in esports was quite the roller coaster ride with yet another major development in Activision’s sexual harassment scandal rocking the industry. However, this was not enough to overshadow plenty of positive developments which include Riot Games revamping its esports division and Japanese giant Nintendo finally choosing to embrace esports for the first time ever. With multiple global non-endemic brands also being exposed to mobile esports with Wild Rift’s Horizon Cup, this could be a watershed moment for the industry.
Here’s a breakdown of all that and more in the latest edition of Esports Business Insights by AFK Gaming.
- Vignesh Raghuram, Supervising Editor, AFK Gaming
Activision under fire after report claims CEO knew of sexual misconduct allegations for years
The Wall Street Journal (WSJ) published a shocking report (paywalled) which revealed that long-time Activision Blizzard CEO Bobby Kotick knew of claims of sexual misconduct and mistreatment of female employees "for years," yet never brought this information to the attention of the board of directors or executives. The WSJ reports state that these unreported incidents include an out-of-court settlement with a former employee who alleged that she had been raped by a male supervisor amongst other such harrowing incidents.
According to the WSJ report, Kotick himself was the offending party on two occasions. He allegedly issued death threats to an assistant in a voicemail message in 2006. He fired a flight attendant from his private jet in 2007 after she complained that the pilot sexually harassed her.
In response to the WSJ report, and an employee walkout, Activision Blizzard's board of directors released a statement voicing its support of the CEO. “The board remains confident that Bobby Kotick appropriately addressed workplace issues brought to his attention,” the directors said. "The goals we have set for ourselves are both critical and ambitious. The board remains confident in Bobby Kotick's leadership, commitment and ability to achieve these goals."
With PlayStation CEO Jim Ryan and Xbox head Phil Spencer expressing their criticism of Activision’s response to the report, and a group of Activision Blizzard shareholders calling for Kotick's exit, the company is under intense pressure to take action. Especially considering that the $50 billion gaming company’s share price lost roughly a tenth of its value since the WSJ report.
Key Takeaway: Pressure continues to steadily mount for Activision Blizzard to make real, meaningful change. While much of the discussion has been on the impact of the company’s games, its esports leagues could suffer as well. Some sponsors already pulled out in the initial wave of backlash, and poor sentiment is growing. Not only that, many of the initial Overwatch investors committed millions to the league largely due to their relationship with and trust in Kotick. As that trust erodes, so too may the relationship between company and franchise owners.
Riot Games promotes John Needham and revamps its esports division
Riot Games promoted John Needham to the newly created role of President of Esports, as part of the company's efforts to broaden the esports appeal of titles such as League of Legends, Wild Rift, and Valorant. Prior to this, Needham served as global head of esports for the last two years and held a managing director position prior to that. Needham is now in one of the highest positions in the organization, alongside other department presidents. He will report directly to Riot Games CEO Nicolo Laurent.
Needham plans to bring a new strategic and operational focus across the multiple esports and leagues, and expand Riot's esports audience into complementary entertainment and gaming categories, according to a release.
Among Needham's first official moves as Riot's president of esports is to begin "Project Stryker," an initiative designed to streamline the company’s broadcasting of esports via Remote Broadcast Centers (RBC) around the world. According to Riot, “these RBCs will increase capacity for Riot Esports content and events while lowering operating costs, ensuring top-tier quality and consistency across all esports productions, and built for scale as the volume of Riot’s live esports broadcasts continues to grow.” The first of these RBCs are expected to come online in Dublin, Ireland, in early 2022.
Riot also promoted Senior Director of Global Esports and Global Head of VALORANT Esports, Whalen Rozelle to the new role of Head of Global Esports Operations. He will now oversee the company's global esports efforts while continuing to be in charge of VALORANT Esports until a new global head of the department is identified.
In addition, Riot Games veterans Naz Aletaha and Leo Faria were recently promoted as the new Global Head of LoL Esports and Global Head of Wild Rift Esports, respectively.
Key Takeaway: Riot’s elevation of its esports division is the most substantial investment a company has made in its own competitive gaming infrastructure in years, possibly in the history of the industry. The company has made a clear statement that it is committing to esports as a core part of its business rather than as an extension of its marketing and retention efforts. Expect Riot to commit significant resources to growing Wild Rift and Valorant esports in the coming year and to further integrate esports across its games and entertainment projects.
Quick Shots Segment
Ampverse acquires Indian Esports organization 7SEA Esports in multi-million dollar deal
Asian esports organization Ampverse has entered the Indian esports market and has acquired 7Sea Esports with a planned multi-million dollar investment. The investment will be used to expand the organization’s presence in the Indian esports industry with confirmed plans to expand into Valorant and Free Fire.
In an exclusive interview with AFK Gaming, 7Sea Esports’ founder Santosh Pecheti also confirmed that it will be investing into the Indian esports ecosystem and growing it, bringing content creators into the space and developing a portfolio of businesses, instead of just investing into esports teams.
Wild Rift lands League Worlds sponsors for Horizon Cup 2021
The Horizon Cup 2021, Wild Rift’s first ever international tournament which is taking place in Singapore, has seen multiple non-endemic Riot Games partners like Axe, Bose, Cisco, Mastercard, Mercedes-Benz, Oppo, Spotify and State Farm on board. However, despite each brand expanding its partnership with Riot specifically for the Horizon Cup, they are not yet official partners of Wild Rift esports.
ESL Gaming lands Halo: Infinite esports deal
Following the much anticipated launch of Halo: Infinite, developer 343 Industries announced its partnership with ESL Gaming for the game’s esports ecosystem. In 2021 and 2022, ESL Gaming divisions DreamHack and ESL Australia will be hosting competitions as part of the Halo Championship Series, with the former hosting events in Europe and North America while the latter will oversee Australia and New Zealand.
Fortnite returning to live events in 2022
Epic Games announced on Friday during the opening show of the $5M during FNCS Grand Royale that competitive Fortnite will make a return to live events in 2022, at least through third-parties, and that proposals for in-person third-party events "are being reviewed for approvals once again." The company did not indicate whether it has its own plans for live events, or if we will see a Fortnite World Cup in 2022. Any approved events would need to adhere to local or national safety guidelines related to COVID-19.
Misfits Gaming Group hires new executives to transition into a ‘media enterprise’
Following rits recent investment round worth $35M, Misfits Gaming Group (MGG) has hired Steven Brauntuch and Candace Rhymer as its first Chief Marketing Officer and Chief People Officer, respectively, while Alyson Schefren has been added as its Vice President of Integrated Marketing. These new hires are part of the company's plans to transition into a media company, with the release stating that the hires will help the company’s "efforts to accelerate growth and align the company toward producing, distributing, and monetizing original programming."
Nintendo finally reveals official esports circuit from Smash Ultimate & Melee
After years of neglect, Nintendo has finally partnered with Panda Global to announce the first licensed esports circuits for Super Smash Bros. Ultimate and Super Smash Bros. Melee. It is currently planned to be restricted to the U.S only, with players from Canada and Mexico being restricted until “Panda Global and Nintendo have deemed international travel and attendance at in-person events to be permissible.” This announcement is essentially the first time Nintendo as a company has fully endorsed and acknowledged esports in its entire history. The unnamed circuit will commence in 2022 with information on LAN and online events expected to be revealed in the coming months. Details about the rules, format, and prize pools of these events are also yet to be revealed.
On the Horizon
PUBG (PC) Global Championship 2021 is finally kicking off this weekend and will see 32 teams compete against each other over the course of the next 30 days. With PUBG esports competitions being banned in China since the game has still not received game approval by the Chinese government’s regulatory agency, this could very well be the last time we see Chinese teams compete in PUBG PC tournaments.
The Wild Rift Horizon Cup will also conclude on Nov. 21. According to Esports Charts, the tournament has an average viewership of 36.8K at the time of writing. Although significantly lower than the tournaments of its competitor Mobile Legends: Bang Bang, this represents a 300% growth in viewership compared to the SEA Championship 2021, which was its most successful tournament so far.
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