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Business of Esports Minute 005 – Tencent / Trovo, Discord, Guild Esports & David Beckham

005 – July 5, 2020

From the keyboard to the boardroom, this is the Business of Esports Minute! Every single week, I, Paul Dawalibi, the prophet of esports, will be bringing you my hottest takes from the week, basically everything you need to know about the business of esports all in about one minute. Let’s go.

This week, Tencent announced the launch of their own live streaming service, Trovo, as a rival to Amazon’s Twitch. They also promised $30 million to new creators on the platform. The timing of this launch is suspicious given the recent shutdown of Mixer. Microsoft must have been aware of Tencent’s plans and it must have factored this into their decision-making. Tencent brings tremendous muscle to the live streaming world as they own just about every major game developer on the planet. Trovo thus has the power to make entire games exclusive to their platform, which is a scary thought.

Discord also had a major announcement of their own this week, having successfully closed on a new $100 million investment. But the star of the announcement wasn’t necessarily the new capital, but more so what the company will do with the money. Discord plans to expand its service beyond the gaming community, and make it more of a tool for “day-to-day” communication. It’s an ambitious goal for sure, with many large players like Microsoft, Google, and Zoom already competing for market share. I find it unfortunate that Discord didn’t choose to go deeper on the gaming market, but they have enough cash at their disposal that they can afford to dip their toes in bigger waters. Maybe the play Discord has in mind is to position themselves as an acquisition target for those larger players. 

Finally, this week saw yet another celebrity get involved in esports. This time it was David Beckham investing an undisclosed amount to acquire a minority stake in Guild Esports. Never heard of Guild Esports? That’s no surprise. It seems to be a paper company with a logo, founded in late 2019 and backed by investor Blue Star Capital. As part of the ongoing financing of Guild, Blue Star last paid a valuation of roughly $6 million, but is now looking to raise a $31M round at a $124M valuation. If this all sounds crazy, it’s because it is. And it’s bad for esports. This is a company with no assets, no wins, no players, no teams, nothing of any value other than an investment from a celebrity, and it’s looking to raise a massive round on the back of that at a completely indefensible valuation. 

For far more detailed insight and discussion into the business of esports, as well as the most exceptional line-up of guests, please tune in every week to the Business of Esports podcast and every Wednesday evening into the Business of Esports after-show livestream. Also make sure to follow us on Twitter @bizesports and on YouTube at The Business of Esports. 

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