eSports Wars: The Empire (Twitch) Strikes Back - Part 2

ESPORTS WARS: TWITCH STRIKES BACK - PART 2

eSports Wars: The Empire (Twitch) Strikes Back - Part 2 Photo (Lucasfilm)

TNL Take: In Part 1, I looked at the war that Twitch was facing between YouTube, Facebook, Twitter and a host of other players and startups.

Now let's look at how Twitch is fighting back.

Also for the record, "The Empire Strikes Back", is still the best in the entire Star Wars series. Don't @ me.

Twitch has long ruled the gaming live-streaming and eSports space. Although companies like Azubu, Hitbox and MLG (Disclosure: I used to work there) tried to take on Twitch, none of them got close to Twitch’s scale.

With further irony, Azubu acquired Hitbox in January... and then promptly ran out of money.

Amazon bought Twitch for ~$1B back in 2014 and looked like they were going to cement their stranglehold on live-streamed gaming content. However, starting with Activision-Blizzard’s bargain basement acquisition of MLG, things started to ramp up in 2016 with a full court press in 2017.

As I first mentioned in "The eSports Media Evolution" in The Next Level 061 last year, we are starting to see the bifurcation of eSports content across multiple platforms.

eSports Media Evolution (Photo: The Next Level)

For example, here’s what and where you’re going to need to go for Exclusive eSports content now:

  • ESL Counter-Strike Pro League (English) = YouTube
  • Heroes of the Dorm = Facebook
  • ESL TBD Tournaments = Yahoo eSports
  • Rocket League Championship Series = Twitch
  • ESL Weekly eSports Show = Twitter
  • ECS/FACEIT Counter-Strike League = YouTube

Then there are deals like Call of Duty (MLG.tv + Facebook) or ELEAGUE (Twitch + Twitter), which are shown on multiple platforms.

In addition, multiple startups are tackling the opportunity of turning passive viewing into engagement viewing.

So will Twitch sit back and let others write big checks, take their content and for startups to steal their audience?

Not a chance.

Let me be clear though: Twitch is still the undisputed leader when it comes to audience size and scale. It’s challenging to get viewers off of a platform they’ve used for potentially many years and move to another one without significant feature improvements.

When I’ve analyzed events that are shown on multiple platforms (Twitch + Facebook + YouTube Gaming), Twitch wins by a 10X factor sometimes.

Here’s just one example: While this weekend’s Call of Duty World League had about 40,000 viewers on MLG.tv on Saturday, it had ~400 viewers on Facebook – where MLG has 1.2M likes/followers.

That's a fraction of a fraction of an audience.

Here are multiple ways that Twitch is striking back.

 

VIDEO ON DEMAND (VOD)

Twitch Video On Demand (Photo: Twitch)

Twitch has primarily been a live-streaming service. But as I pointed out last year, YouTube makes a ton – the majority – of their money off VOD. Twitch finally addressed Video On Demand.

Counter To: YouTube

 

AMAZON GAME STUDIOS, STREAM+ AND IN GAME CURRENCY

Amazon Game Studio's "Breakaway" With Lumberyard Technology (Photo: Amazon)

The eSports live-viewing experience has to date been a passive experience. A “lean back” experience similar to TV.

If you look at MLG’s EVE (Enhanced Viewing Experience) with it’s fantastic live stat feature or group polls, it’s more of a “lean forward” experience. A few startups – like Genvid and Proletariat – are looking to take making eSports viewing more engaging.

And so is Twitch.

Along with the Twitch Prime announcement, Amazon made a slew of announcements including Twitch integrated games, Stream+ and an In Game Currency. Here's how they all fit together:

  • Amazon has gone on a Gaming hiring spree with industry veterans John Smedley (Ex-Sony Online Entertainment) to head their San Diego studio and Louis Castle (Ex-Command and Conquer) to run their Seattle based studio and work on another game, Crucible.
  • Stream+ provides viewers the ability to earn coins simply for watching a stream which leads to..
  • Using these coins for purchasing in-game items or "polls and wagering" aka Gambling - my guess is that these coins will be universal across Amazon Games
  • Lumberyard is Amazon's technology that enables integrated Twitch streaming for their upcoming games - that's a no brainer
  • The first game to include all of this is Breakaway which also includes: 1/ A broadcaster feature that notifies players when someone in their game is streaming, 2/ Customizable real-time stats and 3/ Ability for the broadcasters to create a community/social network for their viewers...which leads to the next product

Counter To : A whole lot of companies

 

TWITCH PULSE

Twitch's Social Platform Pulse (Photo: Twitch)

This month, Twitch launched a Twitter competitor called Pulse — an updating feed that collects photos, images, and text from Twitch users. 

FYI: Twitch is not bigger than Twitter but it's a good product.

I don't see Pulse as the biggest threat to Twitch but rather Discord, the extremely popular voice/text group chat startup. More on that later.

Counter To: Twitter (Sort Of), Discord, Facebook

 

TWITCH CHEERING

Twitch Launches Cheering Donation/Tip Feature (Photo: Twitch)

If you’re not one of the top Twitch streamers who can rely on Advertising or Sponsorships to monetize, you primarily rely on either Subscriptions or Donations/Tipping.

For a long time, Twitch’s tipping platform was handled by startups like Twitchalerts and Streamtip. With the launch of Twitch Cheering in June, they added another revenue opportunity for their platform – although I disagreed with their 29% revenue cut and thought a Branded Bits feature to sell to Sponsors would work well.

 

TWITCH CLIPS

Twitch Clips Highlights Feature (Photo: Twitch)

For years, there were several startups in the space that focused on eSports highlights directly on the Twitch platform: Plays.tv – which raised shockingly $15M from the 49’ers and the Nets Jeremy Lin – Dingit.tv, Oddshot, Forge and others.

Twitch Clips now provides the same features.

Counter To: Those guys above

 

TWITCH PRIME

Twitch Prime (Photo: Twitch)

I’m a huge fan of Amazon and Amazon Prime, their Free Shipping and access to Amazon's content via a monthly subscription.

Fun Fact: Amazon’s market cap is ~$400B and ~90% of US purchasing is still done offline. #Runway

Last October, Twitch launched Twitch Prime, which is the smartest move that Amazon had done to date.

Anyone who is a member of Amazon Prime automatically gets access to Twitch Prime. The features include:

  • Free Games
  • Exclusive In-Game Items
  • Game Discounts
  • 1 Free Twitch Streamer Subscription per Month
  • Ad Free Experience

Counter To: More accretive to Amazon/Twitch than a counter

 

TWITCH GAME AND ITEM SALES

Twitch Game and Item Sales (Photo: Twitch)

Twitch Game and Item Sales (Photo: Twitch)

Game publishers finally realized that Twitch was a phenomenal Marketing tool because they had 1) The right audience 2) Showed off the actual product 3) It’s Free and 4) Again, it’s Free.

Amazon is already one of the top game retailers in the world.

Peanut butter, please meet jelly.            

Last week, Amazon announced a Game and Item Sales revenue sharing product with their streamers. If a viewer buys either the game/in game items that a Twitch streamer was playing, the streamer gets a 5% cut.

Maybe that should be a higher revenue share but still a great move.

Counter To: GameStop, Steam, Future features from YouTube/Facebook/Twitter

 

TWITCH VOICE

Twitch Acquires Curse (Photo: Twitch)

Twitch acquired Curse last August and outside of their websites and media team – which recently did the Buffalo Wild Wings BDUBS Bowl on Twitch (Disclosure: Versus Sports EA Madden Athlete is playing in this event) – they also got Curse’s voice technology.

Discord is currently the fan favorite and has raised almost $30M. Now combine this feature with the next one.

Counter To: Discord, Teamspeak

 

TWITCH DESKTOP APP

Twitch's Desktop App (Photo: Twitch)

Take everything I've said above and see Twitch integrating into their recently announced desktop app. Voice, chat, in game integration, etc.

While this announcement didn't get the press as the previous features, if Twitch is able to build a one-stop-shop for everything within an app - that could be big.

Dear Twitch and Amazon, thank you for finally working together.

Grab the popcorn - this should be a fun battle to watch.

eSports Wars: Twitch vs. Everyone Else - Part 1

ESPORTS WARS: TWITCH VS. EVERYONE ELSE - PART 1

TNL Take: 9 months ago, I looked at the various companies, startups and platforms going after the eSports market in The Next Level 010: The War On Twitch.

How quickly things change.

When you're on top of the mountain, unfortunately the only place to go is down. Pre-Amazon acquisition, if you wanted to watch any eSports content, you pretty much went to Twitch.

Things started to change in 2016.

TNL Infographic 007: eSports Media Evolution 2016 (Infographic: The Next Level)

I steadfastly hold to my opinion that one of 2017's biggest eSports themes will be about broadcast and media rights.

Here's what's happened so far this year:

TNL Infographic 031: eSports Media Evolution 2017 (Infographic: The Next Level)

TNL Infographic 029: 2017 eSports TV Ratings (Infographic: The Next Level)

This past week, we saw another Exclusive broadcast deal, between FACEIT which brings their Counter-Strike based ECS (eSports Championship Series) to YouTube.

Not only did the ECS launch last year on Twitch, this is the 2nd Counter-Strike Exclusive for YouTube Gaming after it's January deal with ESL's Pro League.

This is interesting for a few reasons but let's recap what I said last year about YouTube and eSports:

The Next Level 010: The War On Twitch (Photo: The Next Level)

The Next Level 010: The War On Twitch (Photo: The Next Level)

YouTube basically didn't need live eSports considering how much many it's makes off VOD eSports and Gaming content - cough....Pewdiepie....cough.

Here's why I believe YouTube is making this move now.

/01 COUNTER-STRIKE ESPORTS VIEWERSHIP

If you go back over the last year, Counter-Strike has been in the top 3 eSports games by Hours Viewed and #1 for half of the year.  If you're selling ads - you need eyeballs and engagement.

 

/02 COUNTER-STRIKE EXCLUSIVES

Now that YouTube has both ESL's Pro League and ECS - and considering that ELEAGUE Season 3 hasn't been confirmed yet and IEM/Dreamhack CS events are also on Twitter now - Google has almost a virtual lock on Counter-Strike Exclusive content.

 

/03 ECS REVENUE SHARING AND GOOGLE SALES

I'm just going to quote directly what FACEIT's Chief Business Officer Michel Attisani told Forbes:

"ECS is co-owned by the teams participating and there is a revenue share in place. This deal will bring great stability to the scene, and will give us the opportunity to really focus on developing the product, while the YouTube and Google sales team will take care of commercializing the content. That’s not just in terms of pure advertising but also in terms of sponsorship and brand integration. When you talk about Google, it's the best sales force in the world when it comes to digital"

 

/04 YOUTUBE TV AND ESPORTS CONTENT

TV Channels On YouTube TV (Photo: YouTube)

YouTube's new Live TV subscription service for $35/month has a ton of great content from channels like ABC, CBS, NBC, FOX, ESPN, 2 and 3, THE CW, FS1, BTN - if the last few sound familiar, they've all broadcast eSports content over the past year.

However there's another potential for eSports and Gaming content: YouTube Red Originals.

YouTube Red Originals will be included in YouTube TV's content package which contains a lot of gaming content.

Offering exclusivity, distribution, content, studio production and monetization - makes YouTube and eSports a lot more compelling than potentially other platforms.

Twitch isn't going to sit back and let YouTube, Facebook, Twitter and other emerging startups just take what they've built over the past few years.

How is Twitch going to strike back?

I'll cover that in Part 2.

Exclusive: Hank Baskett and Denial eSports Talk About Their Partnership

Exclusive: Hank Baskett and Denial eSports Talk About Their Partnership

Ex-NFL Player Hank Baskett Becomes Co-Owner of Denial eSports (Photo: Denial eSports)

TNL Take: Over the past two years, almost 50 Pro Teams and Leagues have invested in eSports. Here's who's joined the party so far in 2017:

TNL Infographic 030: 2017 Pro Sports eSports Investment (Infographic: The Next Level)

As usual, European soccer clubs continue to dominate and in the US, the NBA is leading with both teams and the upcoming NBA2K ELEAGUE.

We even saw the 2nd Pro Hockey team with Delaware North - whose Chairman owns the Boston Bruins - partner with eSports team Splyce.

Notice a big US sport missing?

Not one NFL team has made an eSports investment to date, although the Dallas Cowboys have been rumored to make a move.  While NFL teams haven’t jumped into the pool, several NFL players have.

The most recent is Hank Baskett, former NFL player for the Vikings, Eagles and Colts , who last week became the co-owner of Denial eSports. PS Congrats Robby

Outside of the co-ownership announcement, no other details were given about the partnership. However, Baskett has been involved in Gaming and eSports for a while now.

There seems to be a continuing trend: Denial, Splyce, and Rogue, which have all seen investment, were all established in the past three years.  It will be interesting to see what happens to the “ relatively old” eSports teams that haven’t reaped the rewards yet.

I use the term “ relatively old” because measuring time in eSports is tough. Do you start counting over a decade ago when it first started or the last two years as it’s gone mainstream?

In 2014, Baskett was co-owner of GAEMS, which makes a portable console/monitor system, and minority owner of eSports squad Team EnVyUS. He also said how eSports is similar to playing in the NFL.

After all the global Pro Sports team investment and NBA’s upcoming ELEAGUE, the NFL remains quiet.

I think I may know why….but we’ll save that for later


I spoke with both Hank Baskett and Denial eSports Co-Owner Robby Ringnalda about their recent partnership:

HANK BASKETT

Former NFL Player Hank Baskett (Photo: SB Nation)

TNL: Hank, congrats on your recent involvement with Denial eSports. What made you choose them?

HB: It all started with Robby reaching out to me on Twitter.  Over the years I had heard a lot about Denial as I was always doing my best to keep up with eSports.  I grew more and more interested in Denial as he spoke.  Once he finally asked if I was willing to be a part of the organization as Co-Owner I didn’t hesitate.  To be part of one of the original organizations was an opportunity I could not pass up, especially due to the fact that I was the first person that Robby had reached out to in regards to ownership.

  

TNL: You’ve had an interest in Gaming and eSports for a while now. In 2014, you became the co-owner of GAEMS. What’s so enticing about the space for you?

HB: I have always been a gamer and dedicated to sports.  I was fortunate to play 5 years in the NFL so that gave me the opportunity to understand what it was like to be a professional athlete.  Once I stumbled upon eSports I saw something that I thought would be a game changer in regards to professional sports and how they are seen both nationally and internationally.  A true global sport that brings athletes together from every continent across the globe.  Football for instance is not followed in foreign countries as it is here in the US. Overwatch and League of Legends are just a couple titles of the many out there that have teams representing countries near and far.  I believe that video games have changed drastically over the years.  By this, I mean there are so many games out there that everyone can find that one game that truly sparks their inner gamer.

  

TNL: You were one of the first athletes to see the eSports opportunity.  Over the past two years, we’ve seen an explosion – 35+ Pro Teams, Team Owners, and even a Poker player.  Do you see more professional athletes making direct investments because they see everyone else doing it?

HB: I do believe that with the growth and awareness of eSports there will continue to be those that jump into the culture because it is seen as the thing to do.  However, I feel that some of those that have invested and ones that may invest in the future will do it because of their passion for gaming and the eSports industry.  I mean, who can blame them, the growth of eSports has become widely covered in the media while the industry I believe hasn’t event reached it’s infancy stages! 

  

TNL: About 2 ½ years ago you said that “Within the next 5 years, eSports will become the first truly global sport”. We’re now halfway towards your prediction. How do you feel about that statement now?

HB: I think my guesstimate was pretty accurate.  You look at how many eSports tournaments are taking place globally.  You have more and more developers integrating new formats into their previously successful titles with the hopes of their games being added to the numerous titles already entrenched in the eSports world.  This is because the growth in the numbers of eSports followers.  eSports organizations have created massive fan bases, with fans continuously following their favorite teams as well as buying as much merchandise as possible.  Sounds very similar to other professional sports don’t you think! The growth chart at least for a few more years to come is going in one direction and that way is up!

  

TNL: I agree that eSports will become the first global sport. However, we still have issues with players/casters not getting paid, infrastructure problems, multiple leagues for the same game. What’s the biggest issue for you that eSports needs to overcome to become a global success?

HB: Those are indeed problems and I think that the industry as whole are working to fix those.  It will take time.  Anytime something is new and grows as fast as the eSports industry has there will be initial flaws.  The only way to fix these flaws or learn how to manage them is to do it as a collective.  Leagues, organizations, owners and players all must decided whether or not they want to grow as a whole or grow separately.  I personally feel that at some point though they will come together.  Look back at professional basketball.  We’ve had the ABA and now the NBA.  It will take time, because if it’s rushed it will have to be done all over again.  That would not be good because a major set back for eSports would be held against it from all the naysayers.  The opportunities are endless for eSports as a whole and I’m proud to say that I was a believer from the moment I found my way into it’s world and even more so that I am an owner.

Thanks for your time Hank.

 

ROBBY RINGNALDA

Denial eSports Co-Owner and CEO Robby Ringnalda (Photo: Robby Ringnalda)

TNL: Robby, first, congrats on the partnership with Hank for Denial eSports. How did Hank get involved?

RR: I messaged Hank about a year ago and wished him a congratulations for being one of the first NFL players to get involved in eSports with Team EnVyUs. To me it looked like an organic involvement because he loved gaming.

When we spoke, he said he was no longer involved with Team EnVyUs and we should get lunch next time I was in LA. Our talks went great, our ideas for eSports seemed to link up and by the end of the night - he was a Co-Owner of the organization.

 

TNL: Outside of financial involvement, what are some other ways that Hank will help Denial grow?

RR: Hank is going to bring the value of his rolodex and work on business development for Denial so we can start to connect the dots and continue to grow.

  

TNL: You and Ray have been running Denial since first starting. This year you added Robert Bowling from Infinity Ward and 2 more co-owners in the past week, why the rapid change?

RR: I originally talked to Robert Bowling last year about bringing him on and it seemed like it would work out so we moved forward. However, he got very busy with his charity and other companies so we both mutually agreed to discontinue his involvement with Denial.

Ever since the formation of Denial, l I have tried to run the company organically with sponsors being the main arm of support. With the recent massive investments from VC firms and Pro Sports teams I knew that I had to make a strategic effort to not fall behind. In this space that moves so fast if you don’t evolve you die.

 

TNL: You currently have teams in CS, Overwatch, H1ZI, Street Fighter, Smash 4 and Rocket League. Any plans that you can share in what areas or titles Denial is looking to grow next? 

RR: That’s our current roster and we just announced Vainglory. We want to get back into League of Legends in the next 6 months. We have had so many close failures getting into the LCS since the birth of Denial without the funding that the other teams have now. We think with these changes we have a great shot at re-entering the LCS.

  

TNL: The most important question of all – can you beat Hank in Street Fighter?

RR: Well I have been Pro Gamer before J I think in football, Hank has got me beat but I have some gaming skills left up my sleeve.

 

Thanks for your time Robby.

Exclusive: Chat With Andy Miller About eSports First City Sponsorship

EXCLUSIVE: CHAT WITH ANDY MILLER ABOUT NRG'S WASHINGTON DC SPONSORSHIP

Washington DC's Convention and Sports Authority Sponsors NRG (Graphic: The Next Level)

TNL Take: We still have a few weeks left in the 1st quarter of 2017 and eSports has already seen 25 brands invest in the space - for all of 2016 there was just over 50.

2016: 50+ Brands Invested In eSports (Graphic: The Next Level)

While it's great to see blue chip brands renew like Coca-Cola, GEICO, Audi, Pepsi and Gillette; we've also seen new entrants like McDonalds, Dollar Shave Club, Samsung and Old Spice.

The brands come from across the usual spectrum - Auto, QSR, Beverage, Entertainment, CPG - however on Friday, eSports broke an entirely new category.

Events DC, the convention and sports authority for Washington DC, announced an exclusive partnership with NRG eSports.

Although the sponsorship is with Events DC, it's essentially with Washington DC.  While Vegas has seen many eSports events, tournaments and gambling legislation; Events DC wants to make the city an eSports destination as well.

Why would a city sponsor an eSports team?

Here are the reasons that Events DC mentioned with my added translation:

  • eSports Tourism: More tourists obviously equal more revenue
  • Industry Infrastructure: More jobs and more events
  • eSports Relevance: eSports is the hot new industry, platform and opportunity.   Aligning with eSports changes DC's brand from just a political city to becoming a tech city and becoming "cool" - same reason brands invest as well.

While I think this is fantastic for the industry, I wanted to know a bit more about the partnership. 

So I went straight to the source.

Andy Miller, co-founder of NRG eSports, gave me some further insight.

Andy Miller, co-founder of NRG eSports (Photo: Jay Watson)

TNL: Andy, congrats on the deal and thanks for taking the time to speak with me.  Over 50 brands invested in eSports in 2016. We’ve already seen 25 so far this year. However, this type of partnership with Events DC has never been done before. How did this happen?

AM: We met the Events DC folks at the White House when our Rocket League team was invited to play at the first eSports event ever held there. One of our investors, Justin Siegel, has a relationship with the DC team and we all sat down and started brainstorming on what a relationship might look like for 2017.

 

TNL: That's amazing. How will Events DC and NRG eSports work together to drive this sponsorship outside of the usual jersey logo?

AM: We are working through our plans now, but the idea is to use the NRG platform to introduce eSports fans to our nation's capital from a millennial perspective. DC has so much to offer and is an exciting place to live these days. NRG will bootcamp in DC as well as do events and local activations. 

 

TNL: Vegas has seen many eSports events, tournaments, and casinos getting involved.  eSports team Rogue is based there as well. Why do you think DC was the first city to work directly with an eSports team?

AM: The Events DC crew is a very forward-thinking group. They see the power of eSports and the mass engaged audience that is attached to it. They want DC to be viewed as progressive, tech savvy and a fun place to live and play. There has not been any major eSports events in DC and they want this to change. Sponsoring NRG is an authentic way to learn and become a part of the esports community.

 

TNL: You’re co-owner of the Kings which is based in Sacramento. NRG also has a house in LA. Any chance of DC NRG?

AM: We have a CSGO house in LA, but we have players all over. Our executive office is technically in NYC. No plans to be the DC NRG at this time. 

 

TNL: During our podcast, we talked about how your new Golden1 Center was technically designed to be a world class leader to host eSports events. Vegas recently opened a 200 seat dedicated eSports arena.  DC is going much bigger – a $65M 4,200 seat arena.  Are these new, dedicated smaller arenas a new trend?

AM: Yes. Makes sense. You need big arenas for championships, but eSports is 24/7 and fans want to watch their favorite players and teams where they live which means more frequent, but smaller events.

 

TNL: So which city do you think will follow DC next?

AM: We will see a bunch of announcements with Blizzard's Overwatch League I imagine. Should be some exciting news there in the next few months. 

TNL: Thanks for your time Andy.

 

ICYMI, here's the previous podcast with Andy Miller.

Soundcloud

iTunes

TNL eSports Guest Podcast 001: Andy Miller (Photo: The Next Level)