Business of Esports TV: Astralis Gaming Center

(Podcast #134)

In this segment, we discuss Astralis and other esports teams opening up gaming centers. The Business Of Esports brings you news, debates, and all the information you need to know about the gaming sector, the world’s fastest-growing market. With Paul “The Profit” Dawalibi leading the charge, and a variety of special guests, BoE TV is the only place to find insider information on the esports industry!

Check out the full podcast here:

Paul Dawalibi 47:11
And the headline here is Astralis opens gaming and entertainment center in Copenhagen. Obviously Astralis best known for their CS:GO team. They’re also publicly traded eSports team resorts org, the sub headline fans will have the opportunity to meet Astralis’ CS:GO and FIFA players on the opening day of what they’re calling Astralis Nexus. So it’s a physical location. It’s like a LAN center on steroids, I guess, under the Astralis brand, going to be launching in Copenhagen, actually, in a few weeks now, three weeks now, in June. I’m curious, because Enthusiast owns teams, Enthusiast owns content? Do you look at this and go? Well, you know, we’re gonna do centers next. Is this on the roadmap? Is this part of the thinking of how you can tie all these pieces together? Or? Or do you think that’s just a totally separate business that you guys don’t want really want to play? And I’m curious where you’re at on this one, Adrian?

Adrian Montgomery 48:24
Well, I think, look, I think what Astralis is doing, and they’ve been innovative in their own right. They’re on the NASDAQ in Europe. And they’re doing some pretty, pretty cool things. For me, I still have the scars of running an arena. And and it’s the challenge there is, you literally need to fill it 180 times a year, 200 times a year to make the numbers work. And that’s, that’s a tall order. And so for me, the physical kind of event real estate is something that’s not something we’re going to grow on. Again, we’re going to build those communities because I think it’ll be successful, but it’s kind of stressful, when you know, you have to fill it four nights a week, every week to make the business model work. And we were Canadian, as you know. So less stress the better for us. And we’ll, we’ll find easier ways to go about it.

Paul Dawalibi 49:36
Can I just press on this for a second? Because Yeah, and I’m Jimmy, I’m curious to get your thoughts on this Astralis announcement. But I just want to press on this once for just a second because I’ve been very critical on this podcast. I was critical on this podcast of the overactive media federal fellow Canadians. Their announcement of a $500 million Stadium in Toronto And I felt $500 million. And it was 7000 seats. And and I, you know, back of the envelope math, I couldn’t make the math work. I don’t know how they plan on making it work. But do you look at that and go, you know, we could use that? Do you look at that and go, that’s a terrible investment? Do you look at that? Like, what? What’s your view on that, given that it’s in, you know, the Enthusiast backyard? And it’s eSports. And it’s a big number?

Adrian Montgomery 50:28
Well, I mean, again, we’re in it, we’re in a part of the lifecycle of this industry, where a rising tide lifts all ships. And all I’ll say, is this, building physical and running physical eSports venues is not what we are going to do. Yeah, but here’s the good news. If 7000 people are going to watch eSports, 150 times a year in Toronto, that means that my company will be worth $3 billion, you’ll, you’ll have 9 million people tuning into your podcast. Jimmy will be the Chancellor of the University of California-Irvine. So again, if that works,

Paul Dawalibi 51:18
like no, it’s a great point, right. And I think sometimes, and I’ll put myself in that boat, sometimes we will lose sight of that point that, you know, success on any front for any player in the industry is good for the entire industry as a whole. Of course, it makes for a less interesting podcast, if we just always think everything’s great. And and if I never, you know, disagree with anything or call anything out, but totally agreed. I mean, we all hope for it success. The take IO was the way I was looking at it is like, could that $500 million be spent better somewhere else in the gaming space? I don’t know. But I agree, I hope they fill it 150 nights a year. Because that was just as a fan of gaming, that would be awesome.

Jimmy Baratta 52:02
Yeah, just add a new new perspective here. Because Adrian, I appreciate it from the owner event organizer kind of standpoint, I used to be in a lot of talks similar to this Astralis gaming arena with on the talent side of things. And for the talent, I could share that it was such kind of the opposite of your point, it was such a load off their shoulders, because these are people that are looking to monetize in new ways looking to reach new audiences, looking for long term agreements. For repeat business, we were talking about Vegas type events, you know, kind of like the in house share concerts. So when I first read this, I looked at it from a talent perspective, like, wow, that manager, that team, they’re going to be really happy to get that long term contract here. But I never really thought of it from the other side of the table, which is like, this is an expensive venue that needs to put butts in seats. And that’s a really tall order to do, like you said, 200 times a year.

Adrian Montgomery 52:54
Yeah. And and again, I always I always boil it down to this, which is the hardest thing to do in the world. Believe it or not, there is a right answer to that question. The absolute hardest thing to do in the world, is to get someone to go somewhere, to participate in something, right? Like you could you could organize a dinner party this weekend. And I guarantee you, if you want six people there, one person is going to cancel, right? So imagine if that’s the if that’s the reality, imagine trying to get 7000 people 200 times a year. It’s it’s really, really hard. And so, and you know, Paul, you made a point earlier, which is one of the most interesting points about eSports. Somebody owns the game, right? So if if you and I and Jimmy wanted to organize a basketball tournament and charge 50 bucks a head and keep all the profits and go have a great night out on the town, we could do that because nobody owns basketball. But if we wanted to host an Overwatch tournament, and it was really successful, one of us would be getting a call from Activision saying, where’s my cut? And that’s, again, that’s a challenge to the business model that I’d rather avoid.

Paul Dawalibi 54:19
Yeah, that’s a whole I mean, that’s a rabbit hole there. Adrian, we have like, when do you think that power dynamic shifts in the industry? Because at some point, it has to, I would think, especially from a team owner perspective, right. Like at some point, the owners, the owners have enough bargaining power collectively and the audience’s are big enough that you can sort of sit with the other owners and go Hey, Activision-Blizzard, you know, that 5050 split, we agreed to, you know, three years ago, we’d like it to be 7525. I don’t know. Do you think that day is coming where the publisher will wield or at least their power will be checked? Well,

Adrian Montgomery 54:59
Yes and no look from a pure eSports angle. You know, you certainly a league is only as strong as its weakest franchise, right? sounds like a cliche, but it’s true. But again, we have to be careful what if Activision says, look, we’ll give you a greater split, but you know what? There’s 1200 people that we pay full time to work on the Overwatch meta, so if you guys want to help us pick up that pro rata share of the tab, then yeah, let’s do it. Or, you know, we invested half a billion dollars in startup costs you know, for World of Warcraft, and so you know, we need to get some recognition for that so it it’s kind of it’s it’s a difficult it’s a very difficult situation it’s always easier when you know, no one owns the sport of basketball. Yeah, even though it was created by a Canadian and so Canada should own the sport of basketball.

Paul Dawalibi 56:06
Agreed, although as a Canadian I we all know I only watch hockey Adrian that you know that