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.
042 – March 28, 2021
In this week’s Business of Esports minute: $10B Discord, GameStop Expansion, and Epic Fundraising.
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.
According to a report by Bloomberg News that came out on Monday, Microsoft is currently in talks to buy messaging app Discord for $10 billion. This news comes after VentureBeat said that Discord is “exploring its options for a sale in the wake of interest from multiple parties.” At $10B, this would be a steal for Microsoft. Discord’s growth has been meteoric. However, this rumor creates a lot of questions. Why would Discord sell for $10B in the context of peers going public at much greater valuations? Could Discord have planted this story to create a bidding war? And why would Microsoft spend almost $20B on gaming assets over the last year after disposing of Mixer? Should Microsoft succeed in this Discord acquisition, would it fall under their gaming division or collaboration product division? I answered most of these questions in last week’s podcast and live stream, so check those out!
In other news, GameStop may soon be breaking into other markets. This comes after CEO George Sherman announced plans for the company to expand into new industries, including PC gaming, monitors, and gaming TVs. How will GameStop compete with other online retailers that have sold this product mix for many years? Amazon and Best Buy have greater buying power and therefore a cost advantage. They also have better selection and availability (unless GameStop starts converting stores into mini fulfillment centers) so it will be tough for GameStop to compete on that front as well. Superior customer service might be an option for them, but it’s not an obvious path.
Lastly, Sky News recently revealed that Epic Games, the company behind Fortnite, is finalizing the terms of a $1 billion round of fundraising just seven months after the closure of the previous round. As a result of this latest round of funding, the company is now expected to be valued at $28 billion. A 50% valuation increase in less than a year says it all here. It’s not surprising in the context of Epic’s competitors (Roblox, Unity, etc) getting huge public valuations. However, it is surprising in the context of Fortnite’s slow decline, Epic’s ongoing legal fight with Apple, and Fortnite’s exclusion from iOS. It’s hard to believe that the Epic Games Store is making up the difference. Valuation aside, the big question is will we see an Epic IPO or will the company choose to stay private?
You can get esports news anywhere. This is the only place you can get real insight. For more of this, 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, Instagram, and TikTok @bizesports and on YouTube at The Business of Esports.