Disney appears to be preparing to go all-in on esports, as the entertainment giant has taken significant action to attempt to reach a dominant position in the industry over the past few months.
Disney and its premium sports brand ESPN are both household names. These brands hold massive influence over their audiences. Disney is the go-to source for young children’s entertainment. while ESPN holds the sports audiences captive.
Together, these properties give Disney a strong foothold with younger and older demographics. But neither serves the middle particularly well.
An even more important question for the ESPN brand is how it will deal with the decline in sports viewership. ESPN needs to do something to ensure its place in the market in future generations.
Esports is the perfect way for Disney to introduce younger fans to the ESPN brand. Time is of the essence for Disney, as it must compete with names like Amazon, Google, Twitter and Facebook for the esports audience.
Esports provides the glue between Disney entertainment and sports
It’s no secret that cable TV sports viewership is in decline. This decline is consistent with the increase in the average age of sports fans and with cord-cutting becoming more and more popular, especially with the younger generation.
In order to capture the next generations of sports fans, media giants such as ESPN will need to find a way to become relevant in new ways. Esports provides this relevance and is a fantastic stepping stone from entertainment-focused gamers to competition-loving sports fans. This is because the typical esports fan has outgrown the core of Disney’s products but is not necessarily a huge sports fan.
Uniting Disney and ESPN content on a single platform powered by BAMTech — with gaming and esports content to bridge the age gap — is a recipe for success for Disney and ESPN.
Esports content is already being broadcast on DisneyXD and ESPN2
Disney has recently picked up ESL’s weekly Street Fighter 5 competition. After rebranding it into “ESL Brawlers,”DisneyXD now airs it weekly. Esports has also been on ESPN2 several times, most recently the Street Fighter V finals from the Evolution tournament in Las Vegas was broadcast on the premium channel.
While none of these events have provided especially large viewership numbers, they have not disappointed. The continued support of esports on Disney indicates a commitment to the industry.
Esports content is also less expensive to produce than many alternatives while being very entertaining.
ESPN Esports has stayed the course while others faltered
Many esports news sources have either closed their doors or turned to traditional gaming news and updates. But ESPN Esports has been unwavering.
We don’t know exactly how much attention ESPN Esports generates for the larger brand. But we can see that content continues to flow from the staff of journalists, contributors and editors at ESPN Esports.
Disney resorts will be fantastic live esports venues
Disney has already stated interest in becoming a host for live events at its Walt Disney World Resorts property in Florida.
And what better place to host a gaming competition? The resort is a popular family destination already complete with a spectator arena at the Wide World of Sports Complex, excellent guest accommodations and thousands of potential fans and spectators already on location.
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BAMTech gives Disney the ability to broadcast its own esports
The esports demographic consumes a lot of media online. In esports, more than any other competitive arena, fans like to go directly to the source. With Disney now being the majority owner of MLB-developed streaming platform BamTECH, Disney and ESPN have that capability and look to wield it to great effect.
BamTECH’s stated purpose is to create a streaming platform for Disney content and ESPN channels, and this is will do well. However, if Disney wants to create more content — especially content that bridges the gap between fun-loving children and sports-loving adults — esports will fill that void.
Disney will not be without competition in the world of streaming. Twitch continues to make deals to secure its place as the leader in the world of esports streaming. It will not give up this position without a fight.
Disney owns the rights to broadcast the largest esports league in the world
League of Legends is the largest game played as an esport in the world. Owning the broadcast rights for the various competitions gives Disney and BAMTech a huge jump start.
With its recent acquisitions, Disney can now:
- Host its own live events.
- Stream these events through its online streaming platform.
- Provide media coverage through ESPN Esports.
It’s a win-win-win for the entertainment goliath.
Recent actions by Disney — combined with the potential of the esports market — has positioned the company to change the industry’s landscape and shape the future of gaming and esports fans.
Team EnVyUs, the professional esports organization based in Charlotte, N.C., recently received a $35 million investment from Hersh Family Investments and its interactive group.
More on EnVyUs and the new investment
The investment is led by Dallas-based oil and natural gas magnate Kenneth Hersh.
Originally reported by ESPN, this investment is one of the largest investments into esports we have seen to date. The announcement comes on the heels of the recent news of the Madison Square Garden Company investing in Counter Logic Gaming.
The Hersh Family is no stranger to esports, having been part of a fundraising round of London-based esports powerhouse Fnatic. Hersh’s role in Fnatic is minimal; however the Hersh family will step up esports involvement with EnVyUs in a big way. Reportedly this includes moving EnVyUs from Charlotte to Dallas to take on the Austin-Texas Overwatch League spot.
Recent months have seen a flurry of investment into esports. Where is all this coming from, and why it is happening now? The recent surge in investment is driven by a perfect storm of opportunity, a fear of missing out and need.
Investing in esports feels familiar for sports investors
Esports is a world of talented individuals, often teams of individuals going head to head in competition. At a high level, the industry is no different than sports or any other competitive activity. There are competitors, there is an arena and there are cheering fans. Sports team owners know this scene very well.
Sports owners and investors see the rapid growth of esports combined with images of sold-out stadiums and astonishing online viewer numbers. It is no surprise that so many sports teams are showing interest in owning an esports team as a result.
The existing esports teams welcomes their interest, as capital can be hard to come by in esports. Thus we have a combination of capital-hungry teams looking to grow and sports investors looking to apply their proven formula to a new market.
Current esports investments are small relative to sports teams values
With the average value of an NBA team estimated to be just above $2 billion, the fear of missing out on getting in on the ground floor of an industry that looks so similar to traditional sports is too much to bear.
This fear — along with the media hype around esports — has made for a near frenzy of investing in esports.
On the other side of the investment are many esports teams who are ready for and needing investment. To sports team owners and other investors, the opportunity to invest a few million dollars — with a potential billion dollar payoff — is too good to pass up.
Esports publishers desire stability and experience in their leagues
Publishers such as Riot Games recognize the value that esports brings to their games, their brand and of course, their revenue. These publishers want to ensure the success of each team. They also want the brands they partner with to be stable and to be around for a long time.
For all their achievements and awards, nearly all of the esports teams are led by relatively young and inexperienced individuals without years of business experience. It’s likely that these young leaders are in fact the best individuals for the job. But resources, commitment and experience go a long way.
An investment group does not have many millions to invest if it doesn’t have business acumen. Such groups also understand what it takes to keep a business going through the ups and downs of personnel issues, funding questions, wins and losses. All of that can plague an inexperienced leader.
To solve this issue, publishers have simply raised the prices of entrance to their leagues. Blizzard’s Overwatch League has a price tag of $20 million. Riot’s LCS comes with a $10 million franchising price.
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Why the steep pricetags?
These numbers ensure that no hot-shot video game players can simply show up and become part of these leagues. It will take an organization with a commitment to the future and excellent infrastructure to join.
This arrangement ensures that team will not simply bounce from one game to another. Instead, they will stick with the established powers for a considerable amount of time. The teams that buy in will likely go to great lengths to ensure the survival of a particular game.
All of this adds up to increased profits from game publishers from esports. Those profits so far have been promised to be shared with teams in a mutually beneficial way.
What is not shared with teams, however, is the revenue that comes from game sales, new champion sales and many other in-game items and purchases. This is where publishers make the bulk of their money. Much of it is fueled by esports excitement.
So long as esports keeps bringing in fans and fans keep playing games, expect esports, gaming and the investments that go along with them to keep growing.
The sky appears to be the limit for the prize pool at The International 2017, which is less than two weeks away.
$23 million plus for The International?
Crowdfunding is a popular tool to raise funds for all sorts of things, ranging from medical bills, to new product launches, to esports tournament prize pools. And no esports tournament utilizes crowdfunding more effectively than than The International, which takes place Aug. 7-12 in Seattle.
This year’s championship for Valve’s Dota 2 has raised a record-breaking prize pool $22,657,229 and isn’t finished yet. With the event taking place in the second week of August, $23 million looks like a lock. There is still an opportunity for this event to be the first esports tournament to top $25 million.
The pool is largely funded by players of the game Dota 2 who purchase a digital package known as the “Battle Pass.” This package grants access to a variety of in-game goods, new in-game content and other goodies. Full details on the Battle Pass, along with the ability to purchase a pass for yourself, can be found here.
With such a large prize pool, the spoils do not go entirely to the victor. Prizes are paid all the way to 18th place. The top prize currently is almost $10 million, with the top six teams guaranteed a million dollars.
The winning team from the all-star game that takes place during The International 2017 will walk away with a cool $100,000 in addition to bragging rights.
The International 2017 continues a tradition of breaking records
This year’s prize pool is record-breaking, not only for Dota 2, but for all of esports.
While we still do not know how high The International 2017’s prize pool will go, we do know the others that top the list:
- The second largest prize pool belongs to last year’s International, which managed to raise an impressive $20,770,640 in 89 days.
- Third place in the list of highest esports prize pools is The International 2015, which raised $18,429,613 in 101 days.
- Fourth place, is an easy guess: It is The International 2014. This prize pool was a massive step up from the 2013 prize pool which was the very first attempt at crowdfunding. The 2013 prize pool reached $2,874,380, with Valve contributing its standard $1,600,000.
Others are following in the success of The International
The massive prize pool and success of crowdfunded prize pools has been noticed by other organizers, and this model is starting to see wider adoption.
Notably, Riot Games, creator of League of Legends, adopted crowdfunding for its 2016 world championship, which assisted in raising the overall prize pool to $5,070,000. This is more than double the $2,130,000 prizes in 2014 and 2015.
Blizzard is also looking to crowdfund this year for its Heroes of the Storm tournament series.
Organizers benefit along with players and teams
While the benefit to the teams playing in The International is clear, it’s Valve, the maker of Dota 2 and tournament organizer, that collects the largest check.
Only 25 percent of the proceeds from the purchase of Battle Passes are added to the prize pool. The rest go directly to Valve itself.
What these funds are used for is not entirely clear, but certainly some are used in the tournament itself, as hosting an event with the scale of The International is no small task.
A rich betting environment
With stakes this high, every team playing in this tournament will be bringing their very best, making The International an exciting esports betting opportunity.
North American team Evil Geniuses took home the prize in 2015 and are the favorites from the west. Chinese teams always come out in force at The International, having taken the top spots in 2012, 2014 and 2016. Look to all of the five Chinese teams represented this year to perform well.
The 2014 champs, Newbee, would love to have a strong showing this year, perhaps becoming the first two-time champions at The International.