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.
035 – February 7, 2021
In this week’s Business of Esports Minute: RIP Stadia, Lazy FaZe, and Epic Freebies.
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, the big news is Google shutting down Stadia Games. This was Google’s sad attempt to bring attention to their struggling cloud gaming product, and it was doomed to fail from the start. Stadia was already dead in the water when Stadia Games was announced. A lack of first-party games was not the platform’s primary issue. Making exclusive games for a few thousand customers on a broken service was a misguided strategy. Putting a person in charge who had not shipped a game in a decade was also probably a mistake. Once again, I called this long before anyone. It’s now just a matter of time before we see Google shut down Stadia entirely.
Esports organization FaZe Clan made news again this week when they signed with talent agency UTA. The agency will work with FaZe to expand its content offerings. Wait. Isn’t FaZe Clan basically a content business? And now they are outsourcing their primary function? It’s no secret that esports organizations have struggled to monetize, but this shift to outsource their entire reason for being makes no sense at all. FaZe is basically nothing but a shell and brand now, and with everyone else doing most of the work, they are creating no long-term shareholder value. FaZe has become the investor equivalent of a tourist trap. Stay away.
Finally, Epic Games Store users claimed 749 million free games last year. The result is 160M accounts now on PC, up from 108M in 2019. Giving away free games has been a great way to grow their storefront’s user base and keep people coming back. However, Epic’s revenue was flat in 2020, with money spent on third-party games increasing only slightly. This is an indicator of Fortnite’s slow decline, but also a potentially troublesome situation where Epic will have to keep giving away free games to keep people on their platform. Epic is surely hoping that some of these new users will turn into paying customers, but that hasn’t happened yet. The company is struggling on so many fronts, and it’s clear they need real innovation and focus to turn things around. In the metaverse category, there are some better bets out 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.