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.
049 – May 16, 2021
In this week’s Business of Esports Minute: Herman Miller Dominance, Ubisoft Free To Play, and Tencent Trouble.
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, Herman Miller was in the news as their Director of Gaming, Jon Campbell, recently sat down for an interview where he discussed how the company came to dominate the high-end gaming chair market. Despite the deluge of low-cost gaming chairs, Herman Miller has managed to achieve big success in this category with a very premium offering. It goes to show that good products and good word of mouth can win the day in the gaming space. It’s also interesting that much of this success was achieved without the sponsorship of a huge tournament or influencer, until only very recently.
In other news, Ubisoft recently expressed a renewed commitment to free-to-play games. This comes after the French company warned that profits might fall during the 2021 financial year. It’s an interesting dichotomy when a company announces profits falling and reacts with a strategy to give more of their product away for free. Free-to-play is definitely the hot trend in gaming and Ubisoft is clearly eager to tap into it. However, it’s not clear that Ubisoft’s games can be easily adapted to a free-to-play model. Furthermore, I’m not convinced that Ubisoft’s struggles are related to their choice of business model. Fundamentally, they just haven’t been making good games. That’s not an issue that any pivot in monetization scheme can solve.
Finally, Tencent is discussing agreements with an American national security panel that would allow the company to maintain its ownership stakes in Riot Games and Epic Games. Tencent owns a 40% stake in Epic Games and is the parent company of Riot Games. The repercussions of Tencent being forced to divest their US gaming investments are quite serious. It would set a significant precedent and likely discourage foreign investors from putting money into US gaming companies. Tencent would also be discouraged from investing in US gaming companies. Removing an important acquirer and investor like Tencent from the ecosystem would have negative consequences for everyone. None of this is likely to happen though as I’m guessing Tencent will reach some kind of agreement with the US government. It is interesting to put our tinfoil hats on though and consider who might be the buyer of Tencent’s US gaming assets.
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