Esports and Casinos: MGM's Bet

TNL Take: As casino’s continue to see a dwindling return on gambling revenues and how to get the millennials back in the door, they’re looking at esports to help grow their business.

Today we’ll take a deeper dive into MGM and where the chips are being placed.

 

01/ DEDICATED GAMING AREA

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Opened in late 2016, MGM spent $2M+ converting the former Rainforest Cafe into LEVEL UP, a dedicated gaming and esports entertainment lounge.

The 12,000-square-foot gaming area opened with standard fare like pool and foosball but also includes a laser golf course using AR technology and a VR experience. 

In 2017, MGM made several moves to incorporate gaming and esports further into LEVEL UP which we'll get to below.

 

/02 ESPORTS EVENTS

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MGM properties have hosted a slew of esports events including the 2016 League of Legends Spring Finals and MLG Las Vegas, both at the Mandalay Bay Resort and Casino. In early 2017, Dreamhack Masters Las Vegas featuring 16 teams and a $450,000 prize pool was held at the MGM Grand.

Recently, the MGM National Harbor in Maryland held the Rocket League Season 4 Championships.

To date, no one casino has held as many big esports events at their locations as MGM properties have.

 

/03 SKILLED BASED GAMING

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While slots contribute to a casino’s bottom line, they’re not being played by the younger audience. So what do you do? Combine video games and gambling — sorry skill based gaming.

In February of 2017, MGM installed Konami's first skill-based gaming machine, Frogger: Get Hoppin’, within LEVEL UP with a $2 minimum wager. MGM has also held free entry tournaments around Frogger as well.

In may, MGM Resorts International announced a partnership with Gamblit Gaming to bring two more skill based gaming titles to LEVEL UP — Gamblit Poker and Cannonbeard’s Treasure.

While the jury remains out on the monetization potential for skill based gaming, there’s clearly a need for the casino’s to bring back millennials to the table. 

 

/04 ESPORTS VENUE

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Things start to get bigger now. 

Allied Esports and Esports Arena announced to build an esports venue at the Luxor Hotel and Casino; which it makes it the first permanent dedicated structure on The Strip when it opens this year.

The former nightclub is being turned into a 30,000 square foot arena, which will include daily gaming stations and more uniquely, food made by renowned chef Jose Andres.

This partnership shows that MGM is committed to esports in Vegas and that the a permanent space can service both daily clientele as well as larger events at broadcast quality.

 

/05 INVESTMENT

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Late last year, MGM made a seed investment into Foundry IV, led by Tobias Sherman formerly of WME | IMG. Foundry IV is a new game studio that's looking to create the next big esports hit along with new revenue models.

"As a leader in the entertainment industry, we are focused on the continued evolution of esports and its importance as a strategic initiative for our company," said Rick Arpin, SVP of Entertainment for MGM.

MGM's involvement in Foundry IV could be used for anything from esports gambling, viewing parties to regional events. 

 

MGM has made plenty of bets across the esports ecosystem and will be exciting to see what else 2018 has in store.

Esports Performing Well On Twitter

TNL Take: It's been over 18 months since we predicted Twitter entering the esports space. Since then Twitter made a large push with ESL, Dreamhack and Intel Extreme Masters in March of last year.

How did they perform?

Very well actually according to data released by Twitter. Of the Top 10 live streamed events in 2017, 3 of them were esports related and considering the Top 2 were related to the US and UK elections; they could have ranked higher. With how much live streamed content Twitter broadcast, 3 in the Top 10 is impressive.

2017 Top Twitter Live Video Events (Photo: Twitter)

2017 Top Twitter Live Video Events (Photo: Twitter)

Twitter also quietly signed a deal last September with Riot Games to become Twitter Australia’s partner with League of Legends.  

The partnership saw 2 live streams for League of Origin and the Oceanic Premier League Grand Finals, as well as 10 live broadcasts via Periscope Producer. 

Why does esports work well on Twitter?

As expected, esports skews younger which works well with Twitter's audience consumption of sports events. Twitter has done deals with everyone from the NFL, MLB to the PGA and NASCAR.

The esports audience - from teams, pros to the viewers - use Twitter extensively. One of the biggest audience drivers to Twitch comes from Twitter; it's why you see those promoting a Twitch stream is live primarily use Twitter as their current social platform of choice.

For myself, Twitter chat is also an "easier" experience than Twitch chat. Based on the algorithm, I see tweets first from those I follow/follow me and those in my social graph. As the chat is built around tweets, it makes it easier to follow the conversation than a firehose of emotes. 

Laura Froelich, Twitter's Global Head of Sports Partnerships, told SportTechie a key stat last month: The Halo world championship was livestreamed on Twitter, Facebook and Twitch; with a total audience of 13 million - of which 10.2 million came from Twitter. 

Some further stats would provide greater insight but there's a clearly appetite for esports content on Twitter's platform.

What does 2018 have in store for Twitter?

Considering how much of Twitter's audience overlaps with esports, coupled with last year's live video performance, expect more partnerships for this year. While the majority of Twitter's esports broadcasts have not been exclusive to the platform - you may see one in 2018.

Facebook Expands Even Further Into eSports

FACEBOOK EXPANDS EVEN FURTHER INTO ESPORTS

Facebook Pushers Further Into eSports (Photo: Facebook)

Facebook Pushers Further Into eSports (Photo: Facebook)

TNL Take: In June of 2016, I wrote in The Next Level 010 about "The War On Twitch" that the biggest threat to the live streaming service was Facebook's entrance with their new partnership to offer 1-click streaming of all Blizzard's PC games directly to Zuck's massive platform:

From The Next Level 010, June 14, 2016 (Photo: The Next Level)

From The Next Level 010, June 14, 2016 (Photo: The Next Level)

Facebook then obtained the exclusive rights to Blizzard's "Heroes Of The Dorm", previously held by ESPN, and here's what else they've added to their eSports content:

 

JANUARY: EUROPE'S POWERHOUSE G2 ESPORTS

Top European team G2 eSports - who is at 4:30PM on Sunday currently tied with the world's best League of Legends team at the League of Legends Mid-Season Invitational [Edit: They lost]  -  announced they will start streaming non-exclusively on Facebook beginning in February.  

G2 content will include gameplay broadcasts across multiple titles, behind-the-scenes footage from events and VOD content.

 

APRIL: 76ER'S OWNED TEAM DIGNITAS

Philadelphia 76'ers Owned Team Dignitas (Photo: Team Dignitas)

Philadelphia 76'ers Owned Team Dignitas (Photo: Team Dignitas)

Philadelphia 76ers owned Team Dignitas signed a partnership to live stream on Facebook - although non-exclusive as well and they will continue to also stream on Twitch. 

Content will include team practices, fan interaction and a peek into their daily lives.

Team Dignitas fields 6 teams and currently has about ~800,000 total Fans and Followers on Facebook.

Team Dignitas Fans and Followers (Photo: Facebook)

Team Dignitas Fans and Followers (Photo: Facebook)

 

MAY: ESL EVENTS AND EXCLUSIVE CONTENT

ESL and Facebook Streaming Partnership (Photo: Univision Deportes)

ESL and Facebook Streaming Partnership (Photo: Univision Deportes)

This is the biggest deal to date since the initial Blizzard announcement last year.

ESL announced on Friday a massive streaming partnership with Facebook that includes:

  • 5,500 total hours of content in English, French, Spanish, Portuguese, Polish and German
  • 1,500 of which will be Exclusive to Facebook
  • Content includes: Counter-Strike competitions from ESEA (ESL’s subscription-based platform for amateur, semi-pro, and pro's), an exclusive 30min Counter-Strike show as well as their events like ESL One and Intel Extreme Masters 

Now if ESL's deal sounds kind of familiar...it is.

In March, ESL signed a deal with Twitter to also broadcast ESL One, Intel Extreme Masters along with Dreamhack; as well as an exclusive 30min "eSports Sportscenter" show.

That also shouldn't be a surprise as Dreamhack parent company - MTG (Media Times Group) - also owns a 74% stake in ESL.

 

WHATS NEXT?

As Facebook is just entering these waters, there are numerous ways they could eventually take the lead:

/01 SCALE: Facebook should hit 2 Billion users by the end of Q2 this year. Over half of those users are daily. Which also leads to...

/02 MOBILE: 85% of Facebook's revenues comes from Mobile. As the rest of the world comes online, this is how they're going to access content - not via a PC or console. Facebook stopped reporting Mobile only user numbers but I'd guess it's ~1/3 of their total users.

/03 MONETIZATION: Ads, Donations, Subscriptions, Virtual Currency, Sponsorships, Influencer Campaigns - the list goes on

/04 VR: As VR eventually gathers more audience and others are trying to build VR platforms on top of Twitch or create separate ones, Facebook already has the hardware end with Oculus. From both playing and viewing, the experience potential is endless.

 

This battle is far from over and will be interesting to see how other platforms react in addition to the massive Chinese market. Grab the popcorn.

Is It Time to Pay Attention to VR in eSports?

IS IT TIME TO PAY ATTENTION TO VR IN ESPORTS?

VR and eSports (Photo: HTC)

In addition to The Next Level Industry Guest eSports Podcast series, there will also be Industry contributions to tnl.media. The first in the written series comes from Corey Freeland, who works on VR/AR Content and Distribution Strategy at Ripple Collective.

TNL Take: Even if VR/AR/MR (or whatever comes next) only achieves 20% of its potential, it will be a massive transformation. As the PC revolution was overtaken by the Internet, which in turn was overtaken by Mobile, the VR industry could be even bigger.

 

/01 VR AND ESPORTS

Sliver.tv Integrated At ESL One New York (Photo: ESL)

A few companies are trying to make this happen:

  • VREAL: Raised $3.5M in Nov 2015 to become the "Twitch for VR". Focused on a true VR experience and not 2D viewing or AR.
  • SLIVER.tv: Raised $6.2M in Aug 2016. Sliver.tv is focused on taking existing 2D eSports content and transforming it for VR or 360 Video.
  • Boom.tv: Raised $3.2M in Dec 2016. (Edit: Currently writing about them) Boom.tv takes the 3D data from the game and allows streamers to call up multi-angle replays for viewers in 2D - however that can also be exported into a VR headset.

VR rights for eSports tournaments are starting to get nabbed up. SLIVER.tv launched at ESL One New York last year and recently announced it has signed deals with ESL and Dreamhack to broadcast several events in 2017.

It’s the first big VR rights deal in eSports and I predict it will be another year at least before VR makes it into enough homes to matter to most consumers. But since we’ve entered a phase of locking in rights; long term stake are already being decided.

 

/02 AUDIENCE SIZE

Various VR Devices (Photo: Google)

Usually the first question is if the audience is big enough to justify a lot of investment in a new technology. However, the hype may have gotten ahead of VR/AR.

(Edit: I asked a 200+ audience at a Gaming/eSports Conference in NYC during a panel who bought a VR device in 2016 and 2 people raised their hand)

Combining numbers posted by SuperData and my own research, there are roughly 6.5MM mobile-powered or tethered headsets out in the world and 85MM low-end models like Google Cardboard (though many of those have probably been gathering dust on bookshelves since they were assembled and tried out on day one).

Assuming a modest overlap of eSports fans and headset owners, there are potentially several million people positioned to watch an eSports event in VR right now - but a long way to match YouTube or Twitch's scale.

This will undoubtedly grow as big companies keep pouring money into new headsets and technology over the next few years.

 

/03 THE EXPERIENCE

DOTA2 In VR (Photo: Valve)

It's still early days and only a few examples have been shown.

SLIVER.tv streamed from ESL One and the experience was pretty decent from my experience. So far, the camera is stationary and the traditional broadcast stream is projected in 2D floating above the map. However, with a full field of vision, there is a lot of real estate to bring in useful and potential sponsorship opportunities within stats and digital elements to improve the viewing experience.

Valve showed off what VR viewing would look like in DOTA2 and can currently be viewed with an HTC Vive:

And at Key Arena during The International DOTA2 tournament, viewers saw the Athletes picking their players in AR:

/04 WHAT'S NEXT?

Companies like NextVR have been working - and spending - heavily to secure VR Broadcast rights for traditional sports. Their biggest deal was made recently with the NBA which allows them to stream live NBA games in VR headsets to anyone with a NBA League Pass.

-Since almost all eSports content is Free (if it ain’t broke), I imagine most fans will take the chance to pick up a headset and watch their favorite teams in a more immersive way over the next year.

 

-Companies like Blizzard, Riot, Valve, Activision and EA will want to develop in-house solutions once the audience is big enough and making it a more appealing option for brand investment as well.

-I predict this will become a new platform for sponsorship dollars before the end of 2017. (Edit: We will see 1 Brand Deal related to eSports/VR this year)

 

"Virtual reality was once the dream of science fiction. But the internet was also once a dream, and so were computers and smartphones. The future is coming."

Mark Zuckerberg, FaceBook Post, March 25, 2014