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.
032 – January 17, 2021
In this week’s business of esports minute, Microsoft Stadia, Gaming Surge, and Super League Sinking.
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 head Phil Spencer said that he wants to make cloud gaming games available for purchase without a subscription. Currently, Xbox Cloud Gaming (aka project xcloud) is only accessible if you have an Xbox Game Pass Ultimate subscription. However, Phil wants to change this and make it so that people can buy Xbox games and stream them via cloud gaming. This is the Stadia approach. Stadia has been a monumental failure. Xbox Game Pass has been a monumental success. It makes no sense to borrow Google’s broken business model and product strategy. I wonder if the latest Xbox trailing PS5 sales is putting pressure on Microsoft and forcing them into bad decisions.
In unsurprising news, 2020 saw a huge surge in gaming. The sector earned $140B in 2020, broken down between $73.8B for mobile games, $33.1B for PC, and $19.7B for console. Gaming video content earned almost $10B. The entire industry grew 12 percent year over year, with over half of US residents playing video games. Free-to-play games generated 78% of games revenue. Virtual reality game earnings jumped 25% year-over-year to $589M in 2020, with reinvigorated interest in the technology. None of this growth is surprising. You will want to keep tuning into the Business of Esports though to separate the real opportunity from the hype.
Finally, and speaking of separating opportunity from hype, Super League Gaming announced an $8M raise this week. The money is going to be used to cover the company’s substantial losses. Never mind that the stock price is less than half of its IPO price in a world where gaming is surging. The real problem with Super League Gaming is their attempt to cover their complete lack of strategy or direction with fluffy say-nothing press releases. Even experts in the space can’t describe what they do in 2 sentences. This is a death sentence for a public company. While this isn’t investment advice and you should consult with a professional before investing, I highly recommend looking at Esports Entertainment Group instead of Super League if you’re looking to invest in public esports companies. The chance of success is far greater there.
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.