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Hello, and welcome to the eighth issue of Thank you so much for subscribing. 

As always, if you’d like clarification, detail, or wish to speak further about something you read here, my inbox is open: You can also find me on Twitter retweeting Overwatch League memes @lgflanagan.

And now...on to the news. 

An overview of this week’s headlines

PUBG sues Epic Games, claims copyright violation; the co-founder of Atari, Ted Dabney, passed away; Fortnite patched and now has shopping carts, among many other awesome things; more celebrities are confirmed to be playing in the E3 Fortnite Pro-Am (more to come on this after E3); Russian Minister of Sport talks esports; OWL Grand Finals tickets sell out; the summer seasons begin; ATVI reveals further details about 2019 OWL franchises; the state of brand participation in esports; investments and exits in mobile, ESPN adds LoL to their streaming service; OpTic Gaming expands into India; ReKTGlobal partners with the Bahrain Royal Family; Chipotle sponsors TSM; FedEx sponsors Grizz Gaming.


Big games this week

The summer season is a very busy time in esports, and Memorial Day weekend marks the start of many circuits that culminate in end-of-summer finals. Since we’re now transitioning into summer stages for most games, there’s nothing I specifically want to highlight from the past week, but a quick overview: won ESL Birmingham (Dota 2), the first Major hosted in the UK -- and one of the last Majors before the International participants are decided; we’re getting closer and closer to the playoffs in the Overwatch League; NBA 2K is humming along; fighting game tournament MomoCon went down in Atlanta.

Today marks the start of a huge weekend, so don't worry -- competitive deep dive will be back next week. 

Ownership and operation
More Details Have Emerged Regarding Overwatch League Expansion for Season Two
President and CEO of the Overwatch League, Pete Vlastelica, revealed more details about the OWL expansion in an interview with German publication Handelsblatt. While I previously mentioned the rumors circulating around how many franchises will be added for season two, Pete confirmed they’re looking to expand by six teams. The intended distribution for these spots is two franchises in APAC, two in EU, and two in NA. 

If you’re interested in my speculations on franchise locations…

EU: The biggest need from a fan perspective is clearly EU -- esports is massively popular in Europe and there is currently only one franchise. Supposedly Blizzard is very interested in Berlin and my guess is that it’ll likely be one of the two EU slots, but Pete confirmed they’re in conversation with stakeholders in France, Spain, and Sweden as well. A decent number of current Overwatch League players are from both France and Sweden and both countries are top markets for the game, so that makes a lot of sense. My best guesses would be Berlin and Paris. 

APAC: As mentioned in a previous issue, esports biggest growth market is southeast Asia and as such, I could absolutely see a franchise in Singapore. Beyond that, I feel like a second slot for China and Korea is highly likely. 

NA: It’d really be great to see a team from the midwest or the pacific northwest as there’s currently no representation in those regions. I can't see a world in which Chicago and/or Seattle weren't part of the next batch. As there are a handful of players from Canada in the Overwatch League -- and Canada has done well in the World Cup -- I’d be surprised if no one was having a conversation about Toronto or Vancouver.

The role of traditional sports

Esports' next big mission: Win over sponsors
This is a really great, in-depth state of the union from Ben Fischer on brand participation in esports that I recommend reading in its entirety if you have any curiosity about sponsorship sales and non-endemic brand involvement. This article was interesting to me for a number of reasons, but I specifically want to highlight the results of the poll. The survey, taken in April, covered more than 2,000 senior-level sports industry executives spanning professional and college sports. Some particularly noteworthy stats: 38% think the business potential of esports is overestimated, and 39% believe annual revenue from an esports league will never match a big 4 sports league. I know this sample size isn’t that big, but still -- wow. Never? Well, I’m going to go on the record and say I think it’ll happen in the next decade.

More than just Candy Crush

Zynga Buys Mobile Developer Gram Games for $250 Million in Cash
Zynga, the grandfather of the social gaming industry, has acquired mobile game developer Gram Games for $250 million. Gram’s nine titles, including Merge Dragons (a top-grossing game in the US) and 1010!, have been downloaded 170 million times and will add about 3 million daily active users to Zynga’s lineup. Gram Games, while they have studios in London, is headquartered in Istanbul, and this is one of the biggest-ever gaming exits in Turkey. This is also the largest acquisition for Zynga’s new CEO, EA alum Frank Gibeau. Zynga has struggled to replicate their explosive early success with Zynga Poker, Words with Friends, and FarmVille, and presumably their hope is that the injection of newly popular franchises like Merge Dragons will increase relevance.

Follow the money
Goldman Sachs invests $200 mln in France's Voodoo -source
Another day, another massive investment in mobile gaming. 

According to a Reuters source, Goldman Sachs’ PE fund has invested $200 million in French mobile game developer Voodoo to rapidly accelerate their global growth. Many of Voodoo’s games are already among the most downloaded games in the world, boasting nine of the top 25 titles. Voodoo games have about 150 million monthly active users and were downloaded roughly 300 million times last year. 

Mobile gaming has become half of the global games market, bringing in about $70 billion of the $137.9 billion annual take. The hyper-casual category specifically, which is where Voodoo’s games sit, is massive and growing. Most hyper-casual games don’t offer much in the form of in-app purchases, so while the games are free-to-play, most are monetizing through the sales of in-game ads as well as offering users the ability to play ad-free for a premium. The simplicity of the gameplay makes them cheap to develop and the incredible ease of play makes them somewhat addictive, so users monetize fast. This category has really only emerged over the course of the last year, but popularity shows no signs of slowing. 

Streaming platforms and media rights
ESPN+ Tests its Luck With the Gamer Community, Will Live-Stream League of Legend Esports Events
ESPN, which has been covering esports in great detail for several years now, has announced that their paid streaming service ESPN+ will stream League of Legends live tournaments and events, starting with next month’s NA LCS Summer Split. They will not be the exclusive streaming partner for LoL esports -- Twitch and YouTube will have it as well -- and it remains to be seen whether or not they are able to draw paying customers when the content is available elsewhere free of charge. Either way, it’s likely still advantageous for ESPN as esports attracts a distinctly desirable audience for advertisers -- one that skews younger than the traditional sports fan. 

Esports reflected in global pop culture
Siddharth Nayyar – AFK Gaming – Growing esports in India
OpTic Gaming is an NA-based esports organization acquired by Infinite Sports & Entertainment, which is Rangers co-owner Neil Leibman’s esports holdco. They announced this week that they’ve partnered with AFK Gaming to form a CS:GO roster in India, a completely new territory for the org. I haven’t fact-checked this, but I’m fairly certain that this is the first-ever pickup of an Indian roster for a major organization, and this is just awesome on all fronts. This is an esports market that has historically been underserved, despite the fact that India is home to the largest youth population on earth -- and many passionate fans. There’s a really meaningful grassroots community already present in India and I personally cannot wait to watch the continued growth of the Indian scene.

ReKTGlobal partners with the Bahrain Royal Family
ReKTGlobal, the Vegas-based esports infrastructure company that bought Steve Aoki’s team, announced a partnership with the OverPowered Network, the esports company owned by the Bahrain Royal Family. ReKT will translate their expertise to the Middle East/North Africa as they look to expand esports -- and the scope of services OverPowered offers -- in this region. OverPowered plans to lead a number of initiatives across tournament organizing, events, communities, arenas, and content. As I’ve said before in this newsletter, I recommend keeping a close eye on what’s happening in esports in ME/NA.

Brands and sponsorships

Chipotle x TSM
North American esports organization Team SoloMid (TSM) has announced Chipotle as their newest sponsor. The sponsorship is with TSM’s newly formed Fortnite roster, and they will be the first sponsor of TSM’s Fortnite house. The partnership will be centered around content, specifically utilizing the massive streaming/social influence of this roster. Combined, the roster has over 10 million social followers and has some of the biggest names on Twitch. Chipotle had briefly been in esports last year, sponsoring OpTic for the duration of their run to CWL Championships. 

FedEx x Grizz Gaming
Grizz Gaming, the Memphis Grizzlies NBA 2K team, has announced they’re teaming up with FedEx. FedEx is headquartered in Memphis, and will sponsor Grizz Gaming in an effort to "explore the rapidly growing esports base and expand on a deep, Memphis-based alliance through two organizations that heavily prioritize technology and logistics." The placement of the FedEx logo in-game will mirror the location of FedEx's logo on the Memphis Grizzlies' home court at FedEx Forum. In addition to the logo placement, the partnership will include social and digital content. 

Games I’m playing and loving
One of my all-time favorite games, Stardew Valley, was finally ported to Switch earlier this year, and the fact that I can now play it on-the-go is a game-changer. Stardew Valley is an RPG farming simulation in which you inherit neglected farmland and are expected to return it to its former glory while maintaining relationships with townspeople (you can even get married!) and engaging in all manner of fun quests. The game is so sweet and friendly, it's truly fun for all ages.

Because I needed somewhere to put memes
I just love this awesome fan-made rendition of Fortnite as an arcade game.

And please excuse the self-promotion, but I was very flattered to be included in this roundup of soundbites on brands in esports in this Sports Business Journal this week. 

And with that, have a great weekend.


Copyright © Lauren Gaba Flanagan, All rights reserved.

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