AFK Weekly: The Most Valuable Esports Companies of 2022 Revealed?
Hello everyone! Many of you may have been treated to a surprise email from us on Thursday. We’ve launched a new weekly newsletter, People on the Move that focuses on career movements (hires, exits, promotions, and job vacancies) within the esports and gaming industry. The Newsletter will save you the hassle of having to doom scroll through social media, websites, PR services, and jobs boards looking for the data you want to read.
So, despite our inaugural issue being free to read, we will be asking for a $3 USD monthly subscription fee starting next week to help cover some of our expenses. We will be able to create original content with detailed analysis and insights about jobs in the industry if you offer us your support.
-Vignesh Raghuram, Supervising Editor, AFK Gaming
Forbes estimates the most valuable esports teams of 2022
Forbes recently released its annual rankings for the most valuable esports organizations in 2022. Like always, there are some debates about the accuracy of these figures since Forbes’ methodology only estimates the revenues of these organizations and may not be fully accurate about the actual figures.
According to Forbes, TSM is the most valuable esports organization in the world with a $540M USD valuation and an estimated revenue of $56M in 2021. It appears that the allegations against CEO Andy Dinh have not affected the organization’s finances. The company’s $210M sponsorship agreement with FTX and its tech businesses (Blitz.gg and a Dyno Bot) have continued to keep it the most valuable esports organization in the world.
But the most impressive name on the list is 100 Thieves. The LA-based organization grew by 142% over the past year, dwarfing every other company on the list. Its strategy of building itself into a lifestyle brand instead of merely a gaming organization, has paid off with the company generating an estimated $38M in revenue in 2021.
Team Liquid, which just raised $35M at a $415M valuation this week, is valued at $440M by Forbes and is the third most valuable esports organization in the world.
Interestingly, Forbes estimates the value of FaZe Clan, which was scheduled to go public in 2022 with a $1B valuation, to only be $400M. This isn’t really surprising considering its unflattering bottomlines (that were recently disclosed in an S-4 SEC filing) and speculation indicating that the company is lowering its valuation (based on its recently disclosed agreement with partner Snoop Dogg.)
Key Takeaway: With these valuations, it’s important to keep in mind that the majority of top organizations build much of their value outside of esports. Even TSM’s powerhouse competitive brand is supported by the success of its tech pursuits through the Blitz app. 100 Thieves and FaZe are both powerful content houses with strong merchandise divisions. With lucrative media rights deals unlikely to emerge any time soon, esports teams must find their success largely through leveraging their competition brand for other entertainment and technology interests.
Team Liquid raises $35M at a $415M valuation
Team Liquid, alongside its parent company aXiomatic, has raised $35M in funding in a round led by asset management company Ares Management, marking its first foray into the esports industry. Ares Management also owns minority stakes in traditional sports teams such as Atlético de Madrid and McLaren Racing.
Hiro Capital (a European venture fund with a focus on esports, video games, streaming, and digital sports), Revolution Growth (a DC-based venture capital fund that invests in growth stage companies), AOL co-founder Steve Case, Softbank Capital veteran Steve Murray; and several existing aXiomatic investors also reportedly participated in this round.
The organization will be using its new funds to support the organization’s growth and expansion strategy, which includes: potential acquisitions that could take the team into new verticals, and partnership offerings and activations, development of its infrastructure in Brazil, and the growth of its international fan base.
This investment round that reportedly elevated Team Liquid’s valuation to an estimated $415M follows a slew of investments in the industry which include a $60M round for 100 Thieves, a $35M round for Misfits Gaming Group, and a $12M round for Ampverse.
Key Takeaway: Team Liquid is arguably the only top esports organization to have built its financial success primarily through competitive gaming. The organization has a stronger European presence than most of its peers on the Forbes list, establishing a training facility in the Netherlands with an Alienware title sponsorship. It has also made a strong push into Brazil which is rapidly emerging as one of the most promising growth markets for the industry.
People on the Move Goes Solo
As Vignesh pointed out earlier, People on the Move has grown so much that we decided to give it a newsletter of its own, but you can check out the first issue (for free) that went out on Thursday right here. But before we ride off into the sunset on our own adventure there’s one executive movement that is so huge that it can’t wait until the next issue:
Doug Lombardi is no longer with Valve Software; in fact he hasn't been a part of the company since February. Lombardi joined Valve in 2000 as VP of marketing, where he helped to usher in such games as Half-Life 2, Counter-Strike: Source and Counter-Strike: Global Offensive, Dota 2, Portal, the company's PC games platform Steam, and many other Valve games over the last 22 years. Lombardi joined Valve from Sierra-Online, the original publisher of Half-Life, where he spent more than two years in a similar role–prior to that he wrote for publications owned by CNET and Future US (the owner of PC Gamer). Lombardi has not announced his future plans publicly as of this writing.
During Berkshire Hathaway’s annual shareholder meeting, Warren Buffett disclosed that the company had boosted its stake in Activision Blizzard to 9.5%, up from the 1.87% stake it held at the end of 2021. He also pointed out that this was his own bet, and that he didn’t want anyone to blame Berkshire’s investment managers, should the acquisition fail to win regulatory approval.
The International Olympic Committee is looking into the possibility of bringing esports to the 2032 Brisbane Olympics. The IOC is looking to host an esports festival in Singapore next year and gauge interest in it. This could lay the groundwork for the formal inclusion of esports as an Olympic event in 2032.
Embracer Group has entered an agreement with Square Enix to acquire Crystal Dynamics, Eidos-Montréal, and Square Enix Montréal for $300M. It will also gain access to major IPs including Tomb Raider, Deus Ex, Thief, and Legacy of Kain as a result of the deal.
The Communications Workers of America (CWA) has filed an unfair labor charge against Activision Blizzard with the National Labor Relations Board, alleging the publisher is attempting to silence discussion regarding working conditions, including “issues related to the sexual harassment and discrimination lawsuit filed by state of California against the company.”
Complexity Gaming has expanded its existing partnership with the U.S. Army and will collaborate to host a tournament for active-duty soldiers. The Soldier Showdown will see teams compete in various esports titles including Halo Infinite, Rocket League, Call of Duty: Warzone, Madden NFL 22 and Apex Legends across multiple weeks.
Washington Justice has signed a multi-year partnership with McDonald's beginning with the 2022 Overwatch League season. McDonald's will sponsor a sweepstakes in which two grand prize winners will receive exclusive prizes, including a McDonald's Arch Card, Justice and Logitech gaming gear, and a chance to take part in a 1v1 against a Justice player in Overwatch 2. In addition, ten secondary winners will receive a McDonald's Arch Card as well as a VIP Ticket to a Washington Justice watch party.
The Esports Club has partnered with Ubisoft for Rainbow Six Siege South Asia Nationals 2022 this winter. The tournament will feature a $10K prize pool and feature competitors from India, Pakistan, Sri Lanka, and Bangladesh.
Skyesports has announced that it will be hosting the official Valorant Champions Tour (VCT) Stage 2 South Asia Challengers event. The event will serve as a gateway into the VCT 2022 APAC Stage 2 Challengers tournament that will be held later this year.
Raleigh, North Carolina will be the host of the Apex Legends Global Series: 2022 Championship which is scheduled to take place from July 7th -10th. The event will feature a $2.5M prize pool and see teams from all around the world compete in it.