A week of news covering the intersection of business and gaming / esports, all in about one minute – everything you need to know from the “profit of esports” himself.
017 – September 27, 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, Microsoft made headlines with their acquisition of ZeniMax for $7.5B in cash. This is the company’s biggest gaming acquisition ever. ZeniMax is the parent company of publishers like Bethesda and iD Software, among others, and owns storied franchises such as Doom, Fallout, Elder Scrolls, and more. For ZeniMax, this is a sorely needed lifeline. They have fallen flat in recent years with few successes and a handful of complete disasters. Microsoft is clearly paying for the IP here, which is the only way to justify the purchase price. But Microsoft also has a track record of doing well with game publishers and will bring dollars, fresh blood and fresh eyes to extract value from this purchase. Keep in mind, they did this with Minecraft to great success. Microsoft also benefits from this acquisition by potentially gaining a slate of exclusives to go up against Sony in this current console generation. And perhaps most important of all, it would be reasonable to expect that all future ZeniMax games will go straight to Xbox Game Pass, thus significantly raising the value of that service. This is yet another power move from Microsoft.
Unity shares jumped 44% on their Wall Street debut last week, and their current market cap exceeds $25B. The company expected to price shares between $34 and $42, but just ahead of the IPO, the company decided to push the price up to $52. On day 1, they hit $75 a share, and today are trading close to $100. The enthusiasm for this stock, trading under the ticker symbol “U”, is unprecedented. Unity sells a game engine that holds about 50% market share, and is a direct competitor of Epic Games’ Unreal Engine. Given the huge mess that Epic Games has got themself in with Apple, it’s maybe no surprise that Unity is getting such positive attention, but the enthusiasm to own one of the basic building blocks of gaming is a great signal for the future of the industry as a whole.
Finally, Blizzard co-founder Mike Morhaime launched a new gaming studio this week called Dreamhaven. The announcement messaging was a clear shot at current Activision Blizzard leadership, stating that “they are looking to create an environment that is developer-friendly, values product and player experience over short-term financial pressures”. Let’s hope that Mike can re-create the Blizzard magic that’s been killed under Bobby Kotick’s leadership.
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.