TNL eSports Startups 008: Gumbler Grabs $5.5M For Real Money eSports

TNL ESPORTS STARTUPS 008: Gumbler

TNL eSports Startups 008: Gumbler (Photo: The Next Level)

TNL Take: The Market Opportunity between Gaming, eSports, Casinos and Gambling is enough to make any Venture Capitalist salivate.

The risks are clear though.

Just ask the Legal team for DraftKings/Fanduel or Valve with it's massive PR mess around Counter-Strike Gambling.

This week the UK Gambling Commission brought its first prosecution against Craig “NepentheZ” Douglas and Dylan Rigby, who have been charged with promoting a lottery and advertising unlawful gambling site which used FIFA Coins.

Even with that, Venture money continues to flow into the space. Last week I wrote about Real Money platform Rumblemonkey which launched publicly after raising an angel round.

Yesterday, Swedish startup Gumbler announced a $5.5M investment for their Real Money skill based gaming platform.

TNL eSports Startups 008: Gumbler (Photo: Gumbler)

Gumbler claims players of the Mobile game Mad Skills Motocross 2 have won a total of €650,000 in 2016 with an average revenue of €45 per paying player each month.

TNL eSports Startups 008: Gumbler (Photo: Gumbler)

Gumbler is not just looking at Mobile as an exclusive platform with upcoming PC support.

Interesting to also note that Gumbler VP Simon Sunden is the former Head of eSports at MTGx, the company that invested in ESL.

Finally, what is in the water in the Nordics?

Over just the past two months, I've covered four Nordic eSports investments:

Sweden: Znipe Raises $1M

Sweden: Strife Raises $1.5M

Sweden: Team NiP Worth $12.5M

Finland: Critical Force $4.5M

 

Winter maybe coming in the North but eSports investment is heating up.

 

OK. I even hate myself for that line.

TNL eSports Startups 007: Rumblemonkey Rolls Out Real Money Platform

TNL ESPORTS STARTUPS 007: Rumblemonkey

TNL eSports Startups 007: Rumblemonkey (Photo: The Next Level)

TNL Take: Rumblemonkey recently came out of stealth at PAX West for their Head-to-Head real money eSports platform. Rumblemonkey has raised an undisclosed amount of Angel funding.

Rumblemonkey Real Money Platform (Photo: Rumblemonkey)

At PAX West, Rumblemonkey debuted a Hearthstone 1v1 game for real money with proceeds benefiting charity.

Rumblemonkey at PAX West (Photo: Rumblemonkey)

Real money "platforms" for eSports are not unique and there are plenty of other startups in the space.

Founder and CEO Jacob Rapaport did tell me an interesting tidbit. Rumblemonkey offered both a $5 and $100 option to play.  Rappaport said they saw a "significant" portion of the audience choosing the $100 option with Rumblemonkey's Twitter announcing $1,000 generated in a single day.

Outside of the usual Skill Based Gaming vs. Gambling conversation that inevitably comes up, is the standard issue of building a product on someone else's IP:

 

You ultimately need Publisher support.

Microsoft's Beam Buy Is More About Minecraft Than Twitch

Microsoft's Beam Buy Is More About Minecraft Than Twitch

(Photo: Microsoft)

TNL Take: 7:17 AM conversation with an 8 year old.

"Dad, stop please."

What about this?  Instead of just watching Stampy, you can actually tell him what to do and interact with him. Wouldn't that be cool? 

"You're blocking the iPad." 

This company Beam is going to do that. You're going to like it.

"Dad! I'm watching Stampy!"

 

He had no idea what I'm talking about.

You have no idea what I'm talking about.

Here's the deal.

 

When I was a kid way back in that Mesozoic Age called The '80's, my TV consumption primarily consisted of morning and afternoon cartoons inside of a big, black box.

For my young son today, his "TV" is 99% Netflix or YouTube on an iPad and 50% of that are Minecraft videos hosted by the ever affable Brit, Stampy Longnose or Stampy Longhead or Stampy Cat.

You don't need to bother to look him up.

This is 25 year old Joseph Garrett as his Passport says and I'd estimate that he'll bring in $5M this year on Minecraft related content and Sponsorships.

(Photo: DailyMail UK)

 

My son is obsessed with him

 

You went through that to give you a sense of the massive audience reach and engagement potential of Microsoft's purchase of live streaming service Beam yesterday.

I included Beam in my "War On Twitch" article in June and this will require a much longer dive - and will be added to the pile of article updates needed.

Beam is a live streaming service like Twitch and many others but the one distinct feature is the ability for the audience to direct the streamer during gameplay - go this direction, use this weapon, go on this quest, etc.

 

Here's a few quick points on the late news from yesterday:

 

/01 Seattle

Beam is based there. And so is Microsoft.

 

/02 Team

By my quick estimate, Beam went from Beta in January, to winning TechCrunch Disrupt in May, to an acquisition by Microsoft in August.

8 months.

Should tell you how the team executes right there.

 

/03 Cost

Beam had only raised $420K in seed funding outside of the Disrupt prize money. I'm just going to throw out a $10M acquisition price just for comparison sake.

Microsoft bought the In Game Advertising startup I worked for Massive Inc. for about $200M.

In 2006.

In 2010 - they closed the business.

 

Also nice return for the investors in Beam.

 

 

/04 First Minecraft.  Then Twitch and eSports

In the near term, this is going to be about integration into 1st party Microsoft games like Minecraft and the upcoming Sea of Thieves, which is all about multiplayer gameplay.

Long term, there are much wider implications across eSports, broadcasting and distribution.

 

What does this mean for other startups and companies in the live streaming space?

 

Activision-Blizzard has MLG.

Disney has BAMTech.

Microsoft has Beam.

China has 100+ live streaming services.

 

Prediction: EA and PlayStation as the next - and maybe last few - big Buyers in the live streaming and eSports space.