FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “Keemstar Partners with UMG to Host Influencer Series.”
The summer of 2019 started off hot for UMG Media Ltd. (TSX-V: ESPT) and Keemstar, as they have brought back the largest influencer series ever, Friday Fortnite. Millions of viewers each week tune in to watch the UMG casters cover the world’s most popular streamers and pro players as they face off in teams of two to claim the top prize. Names like Ninja, DrDisRespect, TimTheTatMan, and more have shown support of the series by participating. The series has attracted sponsors like GFuel, HyperX, Pink City, and more bringing in over US$150,000 in sponsorship revenue over the course of six weeks.
UMG Online is an eSports website, a high-quality next-generation gaming experience. With origins as a LAN event provider, the company is now set to branch out into the online gaming world. The daily source for tournaments and ladders, offered on multiple games across various platforms.
The idea of being able to play your favorite video game while potentially earning money has inspired many children and young adults around the world to hone their craft. Being at the top of the industry can net a person millions of dollars in revenue each year based on popularity, winnings, sponsorships, and brand deals. For example, professional Danish Dota 2 player Johan Sundstein has achieved approximately USD 3.8 Million in winnings. Notably, Sundstein is the original founder and captain of OG, an eSports team that won USD 25 Million from The International 2018 Dota 2 tournament. While becoming a top competitive player requires serious dedication and time commitment, there are many other players who have also achieved fame because of their personality or their early entry into the market. Recognizable players such as Timothy “Timthetatman” Bater and Michael “Shroud” Grezesiek have gained a reputation through Twitch, a popular streaming platform. The two streamers began streaming at an early stage and have since risen to the top. While the two have competed professionally in various tournaments, it is estimated that they net most of their earnings via Twitch as well as sponsorships. According to Mediakix, based on Twitch metrics, Timthetatman nets approximately USD 2.7 Million a year. Meanwhile, Shroud previously played competitive Counter Strike for eSports team Cloud9, but since his retirement from the professional scene, Shroud has now become a full-time streamer. It is estimated that Shroud nets approximately USD 3.19 Million per year. Overall, the eSports industry is a diverse marketplace that appeals to both high-ranking competitive players and casual players. Regardless of the market appeal, both spectrums of the industry are growing at an astonishing rate because of its rising publicity. According to data compiled by Infoholic Research, the global eSports market is expected to triple by 2025, reaching a value of USD 3 Billion. Additionally, the market is expected to exhibit a CAGR of 20% during the forecast period from 2019 to 2025.
2019 has already become a lucrative year for professional gamers. For instance, Epic Games announced a USD 40 Millionprize pool money for its first ever Fortnite World Cup. Through investments and fundraising, Epic Games was able to hold to one of the largest tournaments in eSports history. During the qualifier stages, Epic Games paid out a total of USD 1 Million to top players. And for players that make it past the qualifiers, they have a chance to compete for the grand prize of USD 40 Million. Moreover, Dota 2’s The International tournament made headlines recently after Valve announced that the prize pool will be more than USD 30 Million, smashing its previous record-breaking payout of USD 25 Million. The majority of the prize pool money is derived from crowdfunding. While sponsorships and brand deals are projected to account for a substantial amount of the revenue within the eSports industry, one top industry expert believes that main revenue driver will come from businesses that are centered around the fans. Steve Arhancet, Owner and Chief Executive Officer of Team Liquid, believes that businesses will invest into gaming companies because of the large, and growing, fan base. Newzoo’s eSport research study highlighted that each viewer is projected to bring in around USD 5.45 in revenue per capita this year among a total projected audience of 454 million. Despite the large audience, businesses are more than likely to invest into an organization that is at the top of the leaderboard. In return, organizations can use the investments to recruit more professional players. Likewise, gaming companies have also invested some of their revenues back into the company to promote tournaments for players and viewers. For instance, Riot Games, creator of League of Legends, and Valve have released special in-game items that players can purchase. Ultimately, the revenue generated is funneled back into tournaments to provide players with a larger prize pool. “That is what will eventually drive revenues. You want to be able to invest in [companies and brands] that can generate substantial revenue in [the] future, so ask yourself: Who owns that fan relationship?” Arhancet told CNBC. “You can say that the gamer is playing the game and they have developed [a] relationship with the game, but I would argue that the teams have the biggest arsenal to create that relationship and drive revenue per capita.”
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