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.
033 – January 24, 2021
In this week’s Business of Esports Minute: Allied Implosion, Gaming Hardware Records, and Bilibili Esports.
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, Allied Esports announced the sale of their World Poker Tour asset for $78M. Furthermore, the company is looking for buyers for their esports business. While Allied sold World Poker Tour for more than they paid, this firesale is a clear indication of the failure of the business. It makes no sense for them to turn back into a SPAC. Why would you sell assets in a high growth space to move dollars into a much more crowded and competitive space? I called this Allied failure over 2 years ago. Super League Gaming is next. To be clear, these are not evidence of a lack of opportunity in the esports or gaming space. These are the exception, not the rule. It’s truly just a failure of those specific businesses and their lack of clear strategy.
In other news that I called exactly right, 2020 was the biggest year for gaming hardware in almost a decade. Full year spending was 27% higher than 2019. Nintendo’s Switch was the best selling gaming platform, on both dollar sales and units sold, while the PS5 came in second. I keep saying that gaming hardware for some reason is ignored in most industry business conversations. Companies like Nvidia, AMD, Corsair, Logitech, etc are all putting up record numbers and continue to be strong bets for the space. That growth will not slow in 2021 and I would not ignore this exciting sub-sector of gaming.
Finally, Bilibili esports announced that it raised $28M in a seed financing round led by state-owned groups and funds in China. Bilibili Esports is majority owned by the streaming platform Bilibili. It operates two Chinese esports teams in League of Legends and the Overwatch League. First of all, this is a huge amount of money for a seed round, and is another example of the cash burning nature of esports teams. Second, there is an interesting shift here to more vertical integration. Bilibili now has ownership of a streaming platform, media rights for esports leagues, and the teams that compete in those leagues. It will be interesting to see if Western streaming platforms follow a similar model. Let’s just hope that the failing Overwatch League team doesn’t burn through all that money.
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.