eSports Week In Review | Brand Investment On Pace To Double, US Investment Hits ~$100M, Tencent's Kids Gaming Limits

ESPORTS WEEK IN REVIEW | BRAND INVESTMENT ON PACE TO DOUBLE, US INVESTMENT HITS ~$100M, TENCENT'S KIDS GAMING LIMITS

eSports Week In Review. That's A Xbox Controller (Photo: Xbox)

eSports Week In Review. That's A Xbox Controller (Photo: Xbox)

TNL Take: What a week for eSports. The biggest news being finally some release of information on Activision-Blizzard's upcoming Overwatch League which The Next Level will cover next week and look at two areas that I don't believe have been fully analyzed yet.

This week, 2017 US eSports investment is almost $100M, 60+ brands sponsored eSports in the first of 2017 - which is on pace to double 2016 and China's Tencent's limitations on kids mobile gaming.

 

 

MONDAY 07/10

2017 US ESPORTS INVESTMENT HITS ~$100M
 

TNL eSports Startups 010: Super League Gaming Gets $15M From Media, Sports And Entertainment

TNL eSports Startups 010: Super League Gaming (Graphic: The Next Level)

TNL eSports Startups 010: Super League Gaming (Graphic: The Next Level)

AEG Invests In eSports Team Immortals (Graphic: The Next Level)

AEG Invests In eSports Team Immortals (Graphic: The Next Level)

Matcherino Raises $1.5M (Photo: Matcherino)

Matcherino Raises $1.5M (Photo: Matcherino)

TNL Infographic 050: 2017 eSports Brand Investment (Graphic: Jordan Fragen)

TNL Infographic 050: 2017 eSports Brand Investment (Graphic: Jordan Fragen)

Note: CenturyLink and SFR will be moved to Telco

 

THURSDAY 07/13

China's Tencent Imposes Limits On Kid's Mobile Gaming

Talking Tencent On China Global Television Network (Photo: CGTN)

Talking Tencent On China Global Television Network (Photo: CGTN)

 

Have a great weekend!

China's Tencent Imposes Limits On Kid's Mobile Gaming

CHINA'S TENCENT IMPOSES LIMIT'S ON KID'S MOBILE GAMING

Talking Tencent On China Global Television Network (Photo: CGTN)

Talking Tencent On China Global Television Network (Photo: CGTN)

TNL Take: I'm absolutely fascinated by Tencent.

They're the world's largest gaming company and dominate eSports.

Tencent's eSports Domination (Graphic: The Next Level)

Tencent's eSports Domination (Graphic: The Next Level)

They acquired the largest independent mobile gaming company Supercell at a whopping $10B valuation.

Tencent and Supercell (Photo: Tencent)

Tencent and Supercell (Photo: Tencent)

As Chinese and US legal laws are vastly different to put it mildly, it was very interesting to see Tencent take action themselves and limit kids mobile gaming time on their massive hit "Honour of Kings".

Before we get to the restrictions some quick stats on how big this game is:

  • Monthly users are estimated between 160M -200M
  • 2017 revenue is estimated between $1B - $1.5B
  • Tencent is looking at building a theme park around this game alone

These restrictions came from parents complaining about their kids "addiction" to the game and teachers annoyed by the distraction in schools - aka the Chinese fidget spinner.  Tencent's restrictions are pretty amazing for a Chinese company that's not required to do this:

  • Kids under 12 can only play for 1 hour and not after 9pm
  • Those between 12-18 can play for 2 hours

How does this game compare to the US? How does this affect Tencent's financials? Will other Chinese companies follow suit? Are there US examples of similar restrictions?

I chatted with Rachelle Akuffo with Chinese Global Television Network's on their "Global Business America" show to discuss this further.

eSports Evolution To Pro Sports Has Begun: Part 1

eSports Evolution To Pro Sports Has Begun: Part 1

2016 League Of Legends At Madison Square Garden (Photo: Riot)

TNL Take: I felt as if the first 6 months of 2016 saw a rapid acceleration of eSports investment and Pro Team involvement.

Comparing the speed in the second half of 2016 to the first half of 2016 would be like comparing Usain Bolt to Betty White.  I won't list the dozens of deals that have happened but you can see them all right here at The Next Level.

One of the big themes that I've been thinking about is not only why are Pro Teams investing in eSports but how will that transition affect the space going forward.

Now we're starting to see the early framework of how eSports and the Sports industry will mutually coexist.

RIOT'S MANDATE

South Korean Team SK Telecom 1. Yes, not a NA Team. (Photo: Riot)

As reported by Jacob Wolf of ESPN - who is a fantastic writer - Riot Games plans to require teams playing in North American and European League Championship Series to contractually employ their players and coaches in 2017.

What does that mean exactly?

What defines a contract in the US actually varies by state - I'm not even going to touch Europe.

So depending on what state a team is based in they could receive the following:

  • Healthcare
  • 401(k) plans 

The biggest negative is that teams will have to withhold taxes upfront like any contractual deal.

Well if teams still owe players $25,000 today, that should be a fun conversation.

This also means 14 teams out of the 20 (6 in NA and 8 in EU) will have to make these changes if they are true.

Riot Games is also considering doubling the current NA payment from $12,500 in North America to $25,000.  

What's this mean for the NA teams that now have to take on this responsibility? There has to be some built in stability for them as well.

Let me provide some perspective on 2015 revenues and salaries:

Riot: $1.6 Billion

Bus Driver: $27,000

Hopefully we will get some concrete info on Riot's potential plans soon but that's being poured right now to start the infrastructure needed for eSports.