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.
036 – February 14, 2021
In this week’s Business of Esports Minute: EA Buys Glu, Fanatics Fail, and IKEA Gaming.
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, Electronic Arts acquired Glu Mobile for $2.4 billion. Glu shareholders are getting a 36% premium over the closing share price at the announcement. Glu is best known for casual games, celebrity-themed games (like the Kardashian mobile game), sports games and more. This acquisition is good for EA for a number of reasons. It gives them 100 million new players. It gives them a strong mobile development team. And it’s immediately accretive because they’re paying 6 times revenue for Glu, while EA is trading at 10 times revenue. Seems like a win-win.
Activision Blizzard and Fanatics have agreed to end their partnership. This one was not unexpected. A good sign of a failing merchandise strategy and failing esports league is when your products are always 70% off. The deal also tied the hands of the franchise owners, who were not able to go produce their own merchandise with their own suppliers. While it’s a step in the right direction, it also won’t save the fundamentally flawed product and business model of Overwatch League. Neither side has commented because this failure is an embarrassing one. Until Activision Blizzard relaxes their stranglehold on partnerships, the failure train will continue.
Finally, IKEA unveiled their new range of gaming products. They will be selling more than 30 products including desks, chairs, mug holders, mouse bungees, neck pillows, and ring lights. The line was developed in collaboration with Asus’ Republic of Gamers brand, and I think it was incredibly smart of them to partner up for this launch with a leading brand in the gaming industry. I also love this because IKEA has the ability to completely democratize gaming hardware and make it accessible and affordable for billions of gamers around the world. I told you the gaming hardware space would get more exciting, and this is the proof.
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