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Evil Geniuses CEO Nicole LaPointe Jameson is coming to Disrupt
As the opportunities in the gaming world continue to expand aggressively as part of post-COVID shifts to the entertainment sector, esports has found its own opportunities in reaching new audiences. While competitive gaming is still in its early stages, the stakeholders of the industry are some of gaming’s most prominent publishers and organizations, and disrupting how business gets done can be a major challenge for rising leagues and platforms.
We’re excited to have Evil Geniuses CEO Nicole LaPointe Jameson join us at TechCrunch Disrupt this week to discuss the business of competitive gaming and how esports is faring in its quest to gain an even larger audience. We’ll talk to LaPointe Jameson about the various leagues and stakeholders in the industry and where the momentum is shifting.
Evil Geniuses is a two decade-old competitive gaming brand, but over the past few years, the esports company has seen a dramatic revamp, exiting leagues and joining new ones while bulking up its roster and looking to find new opportunities in a space that has matured dramatically this decade but is still chasing after mainstream audiences. The esports organization was formerly part of Amazon as a result of the Twitch acquisition, but in 2019 was acquired by Chicago-based Peak6 Investments.
LaPointe Jameson joined Evil Geniuses as CEO back in 2019. At the time, the 25-year-old investor had scant experience running a gaming organization, but since her appointment, the esports company has looked to shake up how companies in the esports world operate. Earlier this year, the company launched its own esports analytics platform, collecting and parsing professional and amateur gameplay data and giving the industry access to more streamlined tools to analyze players and recruit.
As one of very few Black women in charge of an esports organization, LaPointe Jameson has looked to build out a more diverse organization and find a more expansive audience outside traditional niches. The league has helped pioneer signing mixed-gender teams to compete at major competitions.
“To clarify for the people in the back that didn’t catch it the first time… I don’t care where you come from. Nor your creed, gender, religion, class, past industry, or sexual orientation. If you are the best of the best, you have a home here at [Evil Geniuses],” LaPointe Jameson tweeted earlier this year.
We look forward to chatting with LaPointe Jameson, alongside a whole host of amazing speakers at Disrupt, including Canva CEO Melanie Perkins, and actor-entrepreneur Ryan Reynolds.
The show is coming up fast. Get your ticket now for less than $100 before the price increases tonight — and we’ll see you soon.
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Xbox and Special Olympics hold first ‘Gaming for Inclusion’ esports event
Gaming in general is moving toward accessibility, but that’s not as much the case in esports, which like other sports are competitive and by nature somewhat exclusive. Xbox and the Special Olympics are working together on a new event that combines competition with inclusion, and it’s going on right now.
This week, Special Olympics athletes will be competing against each other in tournaments of Rocket League, Madden NFL 22 and Forza Motorsport 7. The prize, other than prestige and pride, is playing with one of the Special Olympics’ celebrity supporters: “NBA superstar Jayson Tatum, NFL legend Jamaal Charles, and WNBA superstar Jewell Loyd, and WWE Superstars Dominik Mysterio and Ember Moon.” So many superstars!
“This tournament is a meaningful and important step in making esports more accessible and it empowers Special Olympics athletes with a new way to compete,” said Jenn Panattoni, head of Xbox Social Impact. “Xbox has invested in numerous accessibility features and products, like the Xbox Adaptive Controller and features like copilot or speech to text. The purpose of all this continued work is to ensure that players feel welcome and that they belong on the Xbox platform.”
The tournaments are being recorded right now, and will be broadcast over the rest of the week, along with the “celebrity showcase” coming Saturday with recaps. You can check out a schedule at the bottom of this post, but generally just keep an eye on the Xbox Twitch channel and Special Olympics YouTube channel.
I like to highlight these events because accessibility has been on the back burner for so long in the gaming world, and now we’re seeing big moves by developers, publishers and partners to make things better. Microsoft’s XAC is a great example, as is the panoply of visual, audio and difficulty options in the latest Ratchet & Clank game. Esports is definitely one of the areas that needs more diversity, though, and the participating players were glad to take part. I asked Special Olympics athletes Jose Moreno and Colton Rice for their thoughts on the matter.
Do you think competitive gaming is getting more accessible?
Rice: Competitive gaming is definitely getting more accessible. Not only are the games becoming more accessible, accessibility allows people with disabilities to become more competitive players. People with intellectual disabilities are always trying to compete at their best. We want to do what everyone else is doing, and sometimes just need a little help to make that happen.
Moreno: I do think that competitive gaming is getting more accessible because Microsoft has started bringing out video game controllers that are accessible for people with intellectual disabilities, physical disabilities — accessible to everybody. I’m a lifelong gamer, and accessibility in esports has been game-changing. Accessible gaming wasn’t available when I was growing up. Today, it’s so much more fun to play when you can play with friends of all abilities and everybody can participate.
Special Olympics athletes Colton Rice, left, and Jose Moreno. Image Credits: Special Olympics
How are you experiencing that change?
Moreno: In my opinion, the more the video games industry include people with intellectual disabilities, the better the video game community is going to get to know how we love playing video games just like everybody else. And through events like Gaming for Inclusion, I’m not just able to compete — I’m included as a part of a community of gamers where I am welcomed and included.
Rice: People with intellectual disabilities have skills and pay attention to details; when we set our minds to do something, we practice until we are the best we can be, especially when we enjoy doing it — and that includes gaming. People with disabilities just need more time to learn, but when you’re dedicated to something that you’re passionate about, you won’t stop until you succeed.
What’s something you’d like to see more of, from developers, publishers, etc.?
Moreno: I would like to see more from developers or makers or publishers of video games in general or computer games to include more people with intellectual disabilities in the video game workforce. People with intellectual disabilities can play a variety of roles and provide unique perspectives on how to improve the gaming experience. Publishers and developers can get a different perspective from people with disabilities; whether that’s featuring people with intellectual disabilities represented in their storylines or seeing them in the games themselves. We’re eager to be a part of this process, and there are lots of passionate gamers with intellectual disabilities who would like to participate in focus groups or in actual jobs as creators within the industry.
Rice: The companies who make these games are trying to make high-quality games that are enjoyable for everybody. There is still a lot that can be done to make games more accessible. For example, it can be frustrating when gamers with intellectual disabilities are learning a new game with instructions that are hard to read. It can take hours to learn how to play the new version of a game you’ve played for years. That doesn’t mean people with intellectual disabilities aren’t capable of playing or competing — it just means we need better accessibility tools to help us learn.
If gaming companies want to create accessible, inclusive games, they could benefit from including gamers with intellectual disabilities in the creative process to help make or test “easy read” or beginner’s instructions, or find ways to simplify navigation between different levels of a game. Gaming can build a community and reach people who feel left out. Accessibility allows everybody to have fun.
This competition and other events in online gaming have been essential to keeping the Special Olympics community connected and active over a difficult couple years.
“Special Olympics has a long-standing partnership with Microsoft that has been incredibly valuable for the athletes and families of the Special Olympics movement,” said the organization’s chief information and technology officer, Prianka Nandy. “With the COVID-19 pandemic, our main concern has been the safety and health of our athletes, who are amongst the most vulnerable population to have an adverse or catastrophic outcome from the virus. This led to the cancellation and postponement of thousands of annual in-person events and competitions — which meant our athletes have missed out on the connections and opportunities to experience the joy of being with their teammates, coaches and friends. At this time, our goals remain to raise awareness of the Special Olympics movement and the accomplishments, hopes and dreams of our incredible athletes, and to change attitudes towards people with intellectual disabilities within the gaming community, all while remembering that gaming can be fun and inclusive for all.”
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Infinite Canvas raises $2.8M for a metaverse creator group modeled after esports teams
With the promise of an interconnected virtual world coming into focus and user-crafted gaming content exploding, Infinite Canvas is looking to apply to the metaverse lessons learned in the esports boom.
“Metaverse” is the hot buzzword right now, but it’s not an empty term. Ten different people would probably define the metaverse in 10 different ways, but it’s generally used as shorthand for the web of emerging virtual spaces full of personalized avatars, games and digital goods that are already shaping our world.
Much like the realm of esports boasts individual standout players who command their own followings, the social gaming world has its own stars who make original in-game content. But right now, creators making hit content in Fortnite, Roblox and Minecraft are mostly operating on their own, without the supportive infrastructure that quickly professionalized the esports world. And like the early waves of esports players, those content creators skew young and lack some of the resources that would make it smoother to scale the digital brands they’re building.
Founded by Tal Shachar and Sebastian Park, Infinite Canvas is looking to connect creators who craft content for the world’s most popular online games with the financial resources, tools and experience they need to grow their businesses beyond what would be possible in isolation.
Shachar, the former growth strategist at BuzzFeed Studios and chief digital officer at Immortals Gaming Club, and Park, previously VP of Esports for the Houston Rockets, where he founded League of Legends franchise team Clutch Gaming, envision a hybrid talent management company and game publisher modeled after the success they’ve seen in the esports world. The pair liken the new venture to “an esports team for the metaverse.”
To grow their vision, Infinite Canvas has raised $2.8 million in pre-seed funds led by Lightshed Venture Partners, the venture firm founded by media analyst Richard Greenfield. BITKRAFT Ventures, Day One Ventures, Crossbeam and Emerson Collective also participated in the funding round.
“We are just at the beginning of seeing what the metaverse market opportunity can be,” said Greenfield. “While the path to monetization is clear on platforms like YouTube, in virtual worlds Infinite Canvas is pioneering a network that will unite creators, players and content partners to enhance the earning power of the talent building new virtual empires.”
Out of the gate, Infinite Canvas has partnered with some big names in Roblox, including RussoPlays, DeeterPlays, Sabrina and DJ Monopoli from Terabrite Games, as well as a handful of other Roblox developers, Fortnite map makers and streamers who, combined, reach more than 4.5 million subscribers.
For the team, this nascent era of user-generated gaming content looks a lot like another now-ubiquitous creator platform once did.
“Roblox in particular, but really all of these UGC gaming platforms, really reminded me a lot of YouTube. Which is to say that they were enabling a new type of person to distribute a content format that was previously kind of locked right behind like barriers of distribution and also of skills set and capital, quite frankly,” Shachar told TechCrunch.
After getting curious, Shachar and Park dove into the creator community and found a diverse array of generally self-taught young people from all around the world crafting custom in-game content for Fortnite, Roblox and Minecraft. Much of that content, whether intentionally or not, offered players more digital spaces to connect during the pandemic-imposed social isolation, which saw interest in online social spaces take off.
“Everyone was pretty negative about the world writ large and we’re just talking to these like 17, 16, 18, 19-year-old guys, gals and non-binary pals from all over the world, just like straight up making cool stuff,” Park said.
In those conversations, Park and Shachar realized that while the world of user-generated gaming content can produce huge hits, creators were mostly isolated from support that could help them take their work to the next level.
“It felt very siloed — you have people making content over here on the right and then people developing these games on the left and then players kind of in the center there and that didn’t really make a ton of sense to us,” Shachar said. “Especially because it was super clear that there was this really strong loop of content creation leading to gameplay leading to content creation.”
With Infinite Canvas, they want to provide that missing framework, offering creators crafting content in virtual worlds everything from marketing support to capital and tech tools. As creator monetization channels within virtual worlds mature, Infinite Canvas hopes to even be able to broker ad and brand opportunities and empower creators to expand their own brands across platforms.
“What if we built a new kind of organization that blended parts of being a game publisher, parts of being an esports team, parts of being a capital and tech backend to basically enable these people to do what they do but better and bigger?” Shachar asked.
“For the metaverse — whatever word you want to use — to really exist, it’s going to take all of these independent people to actually populate it and bring it to life and make all of these experiences and there’s just an insane amount of talent out there that we think can be unlocked.”
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Ryu Games raises $2.3M, betting that cash tournaments for mobile games are the future
Ryu Games, a startup that helps developers add cash tournaments to their mobile games, announced this morning it has raised $2.3 million in a seed round. The funds came from a number of investors, including Side Door Ventures, MGV Capital, Velo Partners and Citta Ventures.
In addition, 500 Startups participated in the round. To see the accelerator take part in the funding round is not a surprise, as TechCrunch first caught wind of Ryu during its participation in the most recent 500 Startups demo day. At the time, we were enthused by the idea of gamers wagering money to go head-to-head with other players on mobile devices. Investors appear to back our first impression of the company.
The gist behind our bullishness on the company’s idea is that esports is cool. And though your humble servant is sufficiently ancient as to favor PC-based esports, younger folks are into mobile gaming esports. Fair enough. Now mix in the sports-betting frenzy that we’ve seen in the United States, and you have a potentially potent cocktail.
TechCrunch caught up with Ryu Games co-founder and CEO Ross Krasner to dig in a bit more. It turns out that the original esports-y model that we envisioned for Ryu was a bit off. Instead, players will often go toe-to-toe in an asynchronous fashion, betting high scores in a game against one another. So, competitive “StarCraft II” this is not. But “StarCraft” is famously difficult to be even mediocre at, while mobile games are simpler by nature, and thus more popular.
Perhaps your parents will square off against office friends in cash-fueled solitaire tournaments.
The money setup is simple, with Krasner likening it to a poker tournament. You wager a set amount, and then play. Ryu collects a fee for hosting, and then players get to it.
Ryu hopes to be present on a few dozen games this year. One matter that could slow adoption, however, is that games it partners with tend to relaunch a version of their title with Ryu’s SDK built in. The startup bites back against the work that partner-developers have to undertake by cross-promoting titles that use its system. So, if you sign up, you can do more than generate revenue. Your game might also find a new audience.
Like with most seed-stage startups, Ryu Games is more of a bet on the future than proof of a new trend. Let’s see how far it can get with this set of capital, especially as vaccines take larger and larger bites out of the pandemic that has kept us locked up for so very long.
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With 1v1Me, anyone can gamble on their ability to crush an opponent in player vs. player games
Anthony Geranio has played video games for the past 13 years. The 26-year-old first-time founder of 1v1Me, a new company that lets anyone gamble on their ability to win in a player versus player game, tried to make it as a professional gamer, but when that didn’t work, he turned to the tech industry.
Geranio and his co-founder Alex Emmanuel bounced between companies like TextNow, Skillshare and Grailed to combine both of their passions — gaming and entrepreneurship — into a new company.
“The reason I got into programming was because I wanted to be my own boss one day,” Geranio said. And even though he was making $200,000 a year working at mission-driven tech companies, Geranio said he still wasn’t fulfilled.
The COVID-19 pandemic finally convinced Geranio and Emmanuel to take the plunge. All of Geranio’s friends had started lockdown whiling away the hours by playing poker online for money. Then poker turned into Call of Duty, which turned into Madden, which became whatever else the kids play these days (my gaming days ended with Mortal Kombat II).
Geranio then went to On Deck and, after graduating, began knocking on investors’ doors. The company managed to raise more than $2 million from investors, including On Deck, Erik Torenberg at Village Global, Turner Novak at GeltVC, Niv Dror at Shrug, SterlingVC, Ali Hamed at Crossbeam, Cody Hock and Cole Hock from UpNorth, Lightshed Ventures and Bettor Capital. Notable angels also wanted in on the action, including Justin Waldron, Brud founder Trevor McFedries, Ian Borthwick, Albert Cheng, Stephen Sikes and Anthony Pompliano.
The company is launching its app on the app store with an invite-only approach, with the first invites going to content creators who already play games like Call of Duty. The long-term goal is to create content creators around wagering. “We’re trying to create a network where wagering is the engagement tool,” said Geranio.
For now, the company is only supporting bets on games like Call of Duty and Fortnite. The service acts as a marketplace which exchanges contact information on a PlayStation or Xbox. To win a wager, competitors have to link their bank accounts, settle on an amount, and 1v1Me puts that money in escrow. Gamers stream their game on Twitch and 1v1Me monitors the game to determine the winner. Once the competition is over, the winner gets the money transferred to their account.
The company is launching with gamers like NoisyButters (who invested as well), Lunchtime, RLaw and Vonniezugz.
To juice signups and invites, which can either be obtained through a creator or by following the company on Twitter, where 1v1Me will give codes away, the company is also hosting a $500 challenge to whichever competitor wins the most games at the end of the week.
“When I worked at YouTube, I met many gaming creators that desired to entertain their fans and hone their skills, but it can be a struggle to make significant money along the way,” said Albert Cheng, co-lead of Socially Financed and director of Product at Duolingo. “1v1 is the most promising platform for esports gamers to make a living, and I’m thrilled to back them on their journey.”
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PUBG Mobile-developer invests $22.4 million in India’s Nodwin Gaming
Krafton, the developer of popular gaming title PUBG Mobile, has invested $22.4 million in Indian esports firm Nodwin Gaming, the two firms said Tuesday as the South Korean firm looks to maintain some presence in what was once its key overseas market.
Nodwin Gaming, a subsidiary of local gaming giant Nazara, has established itself as one of the largest esports firms in India.
The Gurgaon-headquartered firm today works with several firms, including Blizzard Entertainment, Valve, Riot Games and ESL to help them host events, provide commentary, produce and license content, and amass brands and sponsors.
Nodwin, which recently expanded to Africa, will deploy the fresh capital to accelerate its growth in international markets, it said.
Krafton and Nodwin have been engaging with one another for some time. The two firms last week announced that they will be collaborating to hold two PUBG Mobile events in Asia.
“Esports will be a key pillar to the growth of sports entertainment in the future. It sits at a wonderful intersection of sports, entertainment and technology where nations such as India can pave the path. With Krafton coming on board, we have an endorsement from the mecca of gaming and esports — South Korea — on what we are building from India for the world based on our competence in mobile first markets,” said Akshat Rathee, co-founder and managing director of Nodwin Gaming, in a statement.
India banned PUBG Mobile and hundreds of other apps with affiliation to China last year, citing cybersecurity concerns. Krafton has been attempting to bring PUBG Mobile back in India, but hasn’t had any luck yet.
To assuage New Delhi’s concerns about users’ security, Krafton said it had cut ties with Chinese publisher Tencent. (It also inked a global cloud deal with Microsoft.) Sean Hyunil Sohn, the head of Corporate Development at Krafton, said earlier this month at a gaming conference that the firm “will work hard” to bring PUBG Mobile back in India, but didn’t elaborate.
“Krafton is excited to partner with Nodwin Gaming to help foster the promising esports ecosystem and engage with our fans and players in India,” said Changhan Kim, chief executive of Krafton in a statement.
“Taking the momentum from this partnership, we will explore additional investment opportunities in the region to uphold our commitment and dedication in cultivating the local video game, esports, entertainment, and tech industries.”
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How VCs and founders see 2021 differently
Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Click here if you want it in your inbox every Saturday morning.
Ready? Let’s talk money, startups and spicy IPO rumors.
We’re shaking things up this weekend in the newsletter, focusing on a series of larger themes and news items instead of having a few discrete sections. Why? Because there was too much to fit into our usual format. If you were a fan of the original layout, we’ll be back to it next week.
Today we’re talking Coinbase’s growth, how Juked.gg tapped the equity crowdfunding market, a noodle or two on the a16z media game, Talkspace’s SPAC, VC and founder predictions for 2021, and where’s the right place to found a company.
Sound good? Let’s get into it!
Coinbase’s deposits scale ahead of IPO
Thanks to Kazim Rizvi of Drop, parent company to Cardify which provides data on consumer spending, we have a look into how quickly deposits have scaled at American cryptocurrency platform Coinbase. As Coinbase has filed to go public, and we’re eagerly anticipating its eventual S-1 filing, we were stoked to get a directional look at how quickly consumer interest was growing for the assets it helps folks buy.
They are scaling rapidly. Using the first week of January 2019 as a baseline, by the last week of December 2020 deposits and withdrawals from Coinbase had grown by more than 12x apiece. That’s staggering growth, and while the data is somewhat volatile — and we’d treat it as directional instead of exact — on a week-to-week basis, it underscores how well companies like Coinbase may be performing as Bitcoin booms once again, bringing in more trading interest and consumer demand.
Via Cardify, Cardify data.
The Cardify data also indicates a multiplying of new customer acquisition at Coinbase over the same time period, and deposits scaling alongside the price of Bitcoin. As Bitcoin has topped the $30,000 mark recently, sharply higher than in recent quarters, the price gains may have helped Coinbase not only a solid Q4 2020, but perhaps put it on a path for a bonkers Q1 2021 as well.
If we were 10/10 excited about the Coinbase S-1 before this dataset, we’re now a heckin’ 12/10.
Equity crowdfunding seven-figures for esports content
Esports is super cool and if you don’t agree, you are incorrect. But it doesn’t matter if you or I are right or not on the question, as the market has largely decided that competitive gaming is worth time, attention and investors’ money.
The proliferation of esports leagues and games and the like has led to a decidedly fragmented universe, however, lacking a central hub akin to what ESPN provides the world of traditional sports.
But not to worry, Juked.gg just raised capital to build a content hub for esports. This means that old folks like myself can still find out when tournaments are happening, and enjoy a dabble of League of Legends or Starcraft 2 pro play when we can, sans hunting around the internet for dates and times.
Juked.gg went through 500 Startups (more on its class here), catching our eye at the time as a neat nexus for esports-related content. Now flush with a little over $1 million that it raised on the Republic platform, it has big plans.
The Exchange spoke with Juked.gg’s co-founder and CEO Ben Goldhaber about his company’s performance to date. Per Goldhaber, Juked has scaled from 500 users when it launched in late 2019, to 50,000 in December of 2020. Ahead, Juked may invest more in journalism, more into social features, and more into user-generated content. We’ll have more on Juked as it gets its vision built, now powered by over a million dollars from 2,524 investors, each betting that the startup is building the right product to help unify a growing, if distributed, entertainment category.
The a16z media push
To preserve our collective sanity, I’m not going to bang on at length here, but building out content at a VC firm is not new. Hell, how long ago did the First Round Review launch? What a16z appears to have in mind is different in scale, not substance. We chatted about it on Equity this week, in case you need more on the matter.
Talkspace’s maybe-not-stupid SPAC
While it is enjoyable to mock SPACs, featuring as many do companies that are nascent to say the least, not all SPAC-led debuts are as silly as the rest. This is the case with the impending Talkspace deal, the deck for which you can read here.
What matters is this set of charts:
Look at that! Historical revenue growth! Improving gross margins! Rising gross profit!
You may argue that the company is not really worth an enterprise value of $1.4 billion that it will sport after its combination with Hudson Executive Investment Corp., but, hey, at least it’s a real business.
How VCs and founders see 2021 differently
Seed VC NFX dropped a VC and founder survey the other day that I’ve been meaning to share with you. You can read the whole thing here, if you’d like.
I have two pull-outs for you this morning:
- VCs are more bullish on the economy than founders, with around 30% of founders expecting consumer spending to stay flat or decline, positions that only around 17% of VCs agreed with.
- And when it comes to leaving the Bay Area — yes, that chestnut again — 35% of founders have itchy feet, while just 20% of investors are similarly inclined. I think this is because the latter have houses in the Bay Area while most founders do not. But it should temper the view that all the money and talent are leaving. They aren’t.
There’s no place like no place
Initialized Capital put together some data on where founders think it is best to found a company. In 2020, nearly 42% of surveyed founders said the Bay Area. By 2021 that number had slipped to a little over 28%, with a plurality of 42% indicating that a distributed company is the best way to go.
I hear about this a lot from early-stage founders. They are often building what I call micro-multinationals, small companies that have a few employees in one country, and then a handful in others. Making that setup work is going to be a hotspot for HR software I reckon.
Regardless, the requirement of founding companies in the Bay Area is kaput. The advantages of founding there will linger much longer.
Coming up!
Coming up on The Exchange next week: The first entries of our new $50 million ARR series, featuring interviews with Assembly, SimpleNexus, Picsart, OwnBackup and others. And we have some $100 million ARR interviews in the can, as well.
Finally, to keep the The Powers That Be happy, The Exchange covered some neat stuff this week, including American VC results, fintech and unicorn venture capital, European and Asian venture capital results, how the IPO market is even more bonkers than you thought, and notes on what Qualtrics may be worth when it goes public.
Hugs, and let’s all get a nap in,
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Chinese esports player VSPN closes $60M Series B+ round to boost its international strategy
eSports “total solutions provider” VSPN (Versus Programming Network) has closed a $60 million Series B+ funding round, joined by Prospect Avenue Capital (PAC), Guotai Junan International and Nan Fung Group.
VSPN facilitates esports competitions in China, which is a massive industry and has expanded into related areas such as esports venues. It is the principal tournament organizer and broadcaster for a number of top competitions, partnering with more than 70% of China’s eSports tournaments.
The “B+” funding round comes only three months after the company raised around $100 million in a Series B funding round, led by Tencent Holdings.
This funding round will, among other things, be used to branch out VSPN’s overseas esports services.
Dino Ying, Founder, and CEO of VSPN said in a statement: “The esports industry is through its nascent phase and is entering a new era. In this coming year, we at VSPN look forward to showcasing diversified esports products and content… and we are counting the days until the pandemic is over.”
Ming Liao, the co-founder of PAC, commented: “As a one-of-its-kind company in the capital market, VSPN is renowned for its financial management; these credentials will be strong foundations for VSPN’s future development.”
Xuan Zhao, Head of Private Equity at Guotai Junan International said: “We at Guotai Junan International are very optimistic of VSPN’s sharp market insight as well as their team’s exceptional business model.”
Meng Gao, Managing Director at Nan Fung Group’s CEO’s Office said: “Nan Fung is honored to be a part of this round of investment for VSPN in strengthening their current business model and promoting the rapid development of emerging services and the esports streaming ecosystem.”
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Fantasy startup Esports One raises $4M more
Esports One, a startup bringing the fantasy approach to esports, is announcing that it has raised an additional $4 million in funding.
When I first wrote about Esports One in April, co-founder and COO Sharon Winter described it as the first “all-in-one fantasy platform” in the esports world, allowing you to research players, create fantasy teams and watch games, with an initial focus on the North American and European divisions of League of Legends.
According to the Esports One team, creating this platform required building out a set of data and analytics products, as well as using computer vision technology that can track game activity (and update player stats) without relying on a publisher’s API.
The startup says its user base has been growing by more than 25% month-over-month. It may also have benefited from the pause in professional sports earlier this year, while CEO and co-founder Matt Gunnin told me recently that he also sees fantasy as a way to make video games accessible to a broader audience — he recalled one Esports One user who introduced his sister to League of Legends using the fantasy platform.
“I use the example of growing up and sitting there with my dad, watching a baseball game, he’s telling me everything that’s happening,” Gunnin said. “Now it’s the opposite — parents are sitting and watching their kids.”
Many parents, he suggested, are “never going to pick up a mouse and keyboard and play League of Legends,” but they might play the fantasy version: “That’s an entry point … if we can make it easily accessible to individuals both that are hardcore gamers playing video games and watching League of Legends their entire life, as well as someone who has no idea what’s going on.”
The new funding was led led by XSeed Capital, Eniac Ventures, and Chestnut Street Ventures, bringing Esports One to a total of $7.3 million raised. The company also recently signed a partnership deal with lifestyle company ESL Gaming.
Gunnin said the money will allow the company to grow its Bytes virtual currency, which players use to enter contests and buy customizations — starting next year, players will be able to spend real money to purchase Bytes. In addition, it’s working on native iOS and Android apps (Esports One is currently accessible via desktop and mobile web).
Gunnin and his team also plan to develop fantasy competitions for Rainbow Six: Siege, Rocket League, Valorant and Fortnite.
“As a fairly new player in the esports world, we’ve seen immense determination and grit from Matt, Sharon, and the whole Esports One team to grow into a household name,” said XSeed’s Damon Cronkey in a statement. “I’m excited to be partnering with a company that will deliver new perspectives and features to an evolving industry. We’re eager to see how Esports One grows in 2021.”
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How esports can save colleges
A few months ago, I wrote a piece about esports and the Olympics after sitting on a panel discussing whether, as a result of the coronavirus pandemic, esports had an opportunity to work with the International Olympic Committee. After careful consideration and research, my conclusion was basically, “I think that the Olympics need esports a whole lot more than esports needs the Olympics.”
I was surprised by some of the data I uncovered in the course of researching the Olympics piece, specifically on audiences for international, professional and collegiate sports. I observed that while the esports model isn’t as mature as in traditional sports, esports actually garnered close to the same level of viewership, and the audience was growing astronomically. I couldn’t help but wonder how long this phenomenon would go unacknowledged by the institutions that might benefit most from it.
Enter colleges’ and universities’ flirtation with esports: There are currently more than 170 collegiate varsity gaming programs in NCAA Division I, and the number of clubs is even higher. So even as institutions investment in esports, there are still many misunderstood and overlooked aspects of the potential to drive value (and even revenue) in the collegiate esports space.
College in the 21st century
The college experience today is very different than it was 50 years ago. The pace of change outside of institutions is ever-accelerating, often leaving colleges struggling to keep up. Technology, students’ interests, evolving economies and workplaces, and changes in cultural norms have left colleges and universities in a place of less relevance than at many points in the past.
The same can be said of college sports: Outside forces have eroded a once-near-hegemonic source of collegiate pride, cultural power, recruitment, alumni engagement and, in some cases, revenue.
I did a quick review of the audience for the biggest NCAA events in the world; the Football Bowl Subdivision Bowl Championship and the NCAA Men’s Division I Basketball Tournament.
Image Credits: Brandon Byrne
Image Credits: Brandon Byrne
Look at the average viewership of the big bowl games before the championship system went into effect in 2015, as well as after. Above, you see the trend line for viewership for the various big bowl viewership as well as an average. While there are certainly occasional spikes, the best case you could make here is that the product is flat — when you isolate the trend line for both, here is the result:
Image Credits: Brandon Byrne
In the aggregate, the trend seems mostly downward.
Look at the same trends in viewership for the NCAA Final Four — the early semi-final, the late semi-final and finally the championship game.
Image Credits: Brandon Byrne
They look rather similar. So, while collegiate sports still have a massive following, there are two concerning issues here. First, the audience isn’t growing at all; in fact, it appears to be slightly contracting. Secondly, the audience is aging, making collegiate sports less relevant to younger people. While an older audience is still a valuable source of alumni donations and ancillary revenue, it doesn’t exactly align with another core target demographic: potential college students.
Now despite this, there is data that suggests that schools with elite academic departments do enjoy a phenomenon known as the “Flutie effect,” named after Doug Flutie, a quarterback for Boston College whose exciting performance on the gridiron was credited with boosting BC applications. An article in Forbes breaking down an HBS study goes into the phenomenon more deeply than we can here.
Granted, much of the data is from a few years ago, when college sports were perhaps more relevant, but the point is broadly the same: Having an elite program in an activity students enjoy benefits the institutions that sponsor and promote them. But what happens when enthusiasm for those activities among the student body is waning? One idea is to explore involvement in what the students of today are interested in.
As a comparison to FBS football (maxed out at 35 million viewers) and the NCAA Final Four (maxed out at 28 million), Riot Games’ Mid-Season Invitational event for League of Legends had a total viewership of 60 million people. In second place is the Intel Extreme Masters tournament in Katowice with 46 million people. While precise demographic data isn’t readily available, it stands to reason that the latter two events skew younger than the former two.
A few caveats, as these are not precisely apples-to-apples comparisons: These esports events are broken up over a number of days and encompass a significant number of matches — comparable to March Madness, perhaps — and the content is consumed in different ways. Much of the NCAA’s content is presented on television, some of which is on paid, premium channels. Esports events are broadcast on Twitch and YouTube via streams for free.
But the thing to understand is that esports audiences are growing at a 15%-16% year-over-year clip and it commands a worldwide audience, meaning its total addressable market (TAM) is MUCH bigger. The NCAA events are not likely to draw serious audiences outside of North America.
COVID-19
In the context of the pandemic, colleges are hamstrung by students’ inability to engage in a college experience in-person, which is one of the primary reasons one goes to college. Networking, developing new friends and having new experiences are all a part of the collegiate draw, none of which work as well from students’ parents’ living rooms. Similarly, collegiate sports as we know them have essentially ceased to exist, along with their functions of institutional pride, marketing and revenue. The NCAA Tournament was canceled in March of 2020 and there is no sign that it, or any other sport, will be back anytime soon.
Esports, on the other hand, are thriving in this context, thanks mostly to their ability to offer remote competition and viewing. Esports tournaments can isolate audiences, teams and even referees to allow for safe content creation and consumption.
Esports and college
Believe it or not, esports is a better fit for college than it is for the pros. I won’t go into all of the details here, but I actually wrote a separate article about why the pro sports model is NOT a good one for esports. In this article we talk about intellectual property, who owns the league in esports and how all of the entities make money. The biggest problem is, in pro sports, the teams own the league and can then act in the best interest of all of the teams. In esports, the league is usually owned or regulated by the publisher of the video game, meaning you have hands in the monetization pie in a way that pro sports doesn’t have.
The interesting thing about this is that college athletics actually has the same problem and has found a way to mitigate that. The athletes get their scholarships, and the schools, their athletic conference, and the NCAA itself all own a piece of the pie that gets packaged and sold for distribution to the ESPNs and Fox Sports of the world.
This is a much better model for esports. It’s unlikely that any group that “owned” football IP would tell the Dallas Cowboys how to market their team, what their cut is and how it will be distributed. This process happens all the time in college, though. In fact, in order for everyone to get their seat at the table, you HAVE to work all of this out so that the schools make some money (equivalent to a team), the conference makes their money (equivalent to the league) and the NCAA makes their money (equivalent to the publisher themselves). If the chain breaks down at any point, then the whole process grinds to a halt and nobody makes money.
I mention this in my article about the Olympics. The IOC is used to having full autonomy over how the Olympic Games are broadcast, which events are part of the games, who is eligible and who isn’t, etc. There is no chance this would be the case if the Olympics took on esports. The publisher would absolutely wield an incredible amount of influence over how the games are portrayed, broadcast, judged and the like. The IOC isn’t used to that. In college, that’s just a typical Saturday afternoon.
College admission is down and not just because of COVID-19. Even before the pandemic, colleges were trying to find their footing with potential students as people reevaluate the college experience. Forbes wrote back in 2019 that college enrollments were down two million students in that decade. Add onto that the preliminary data we are getting on the effect of COVID on colleges, we could see enrollment in 2020 down anywhere from 5%-20%.
Image Credits: Brandon Byrne
The outlook
For colleges, it’s not great. Revenue is massively down, with even stalwarts like Harvard University hemorrhaging cash. With enrollment down before the pandemic, we have reached a point where colleges and universities have to adapt to survive.
The good news is, I believe that esports could be an opportunity to do just that. Colleges are diving into esports, with 115 different programs offering scholarships for esports and club programs are growing even faster. Certainly, it will help attract students, but monetization in esports is really tricky.
It’s critical that colleges and universities get expert advice on how to create an ecosystem that ultimately compensates all of the stakeholders, including the college themselves. It also will require universities to move quickly and get on board with a model that is still being formed in real time. The coronavirus pandemic isn’t going away anytime soon, but I think there will be many colleges that will. The time to move is now.
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