How Theaters Are Integrating Esports

TNL Take: This week Australian theater chain Hoyts formed a partnership with Gfinity to bring dedicated esports spaces to its locations starting with Sydney's Moore Park. The league will have city-based franchises competing in 3 titles: Street Fighter V, Counter-Strike and Rocket League.

Last year The Next Level looked at the rising opportunity between theaters and esports. Since then, there have been further inroads made and let's examine the latest trends.

 

/01 BRANDS

Coke.jpg

By far the biggest brand taking advantage of esports in theaters is Coca-Cola. For the past few years they have held theater viewing parties for the League of Legends Finals and Overwatch.

Coke is not slowing down in 2018 with the Smite World Championship which took place last month. As Coke is a pouring partner within the theaters and if the ROI is there, expect more of these viewing parties going forward - and hopefully more brands. 

 

/02 DEDICATED ESPORTS FACILITIES

chinese-theatre_Amanda Edwards.jpg

Similar to Hoyts, the TCL Chinese Theatre in Hollywood is launching an esports facility within the complex.

The facility will serve a dual function: as a MX4D Motion EFX movie theatre in addition to serving as the "first immersive spectator theater hosting competitive esports tournaments".

The CEO of TCL Chinese Theatre had some interesting comments as to their future goal by stating a "global network of immersive MX4D esports theaters" which could be linked together to form a movie theater/esports platform. 

I'm still not sure if the MX4D experience is needed for esports and little expansion has been announced since the announcement.

Another announcement was made in November when Landmark Cinemas in Peoria, IL opened an eBash Video Game Center which will have numerous PC's, Xbox's and PS4's.

What's even more interesting is that Landmark Cinemas was previously showing independent movies on Blu-Ray which was costing them more than bringing in revenue.

Pricing ranges from $4/hour to $15 for the day, which is very fan friendly.

 

/03 SUBSCRIPTIONS

Last month, Cinemark unveiled a monthly subscription program named Movie Club offering 1 ticker per month at a discounted price of $8.99, 20% off concessions and the ability to roll over unused tickets every month.  For comparison, a recent outing for 2 to "The Last Jedi" cost me $50+ in Brooklyn.

The subscription model for movies could easily translate to esports. Substitute movies for esports events, offer a subscription model for esports only or offer a combined package for both movies and esports. Many ways this could work.

 

Again here's why esports in theaters works:

/01 REAL ESTATE ROI

"Historically 70-75% of a theater's business is done Friday through Sunday, so they are relatively inefficient operations Monday through Thursday," said Eric Handler, senior equity analyst for MKM Partners.

In addition, using the Coke minimum ticket model, theaters can determine what content will be most lucrative.

/02 MULTIPLE LOCATIONS

Can't make it to NYC, LA, Vegas or DC to watch your favorite eSports event, now the content is increases by an order of magnitude. It also provides a...

/03 COMMUNITY BASED EXPERIENCE

Instead of watching an eSports event by yourself at home, you can join other fans and watch together.

/04 MONETIZATION

Look at the new revenue streams now available to theaters:

  • Tournament Fees
  • Sponsorships and Advertising revenue
  • Food and Beverage

Just think of this scenario: "Enjoy your time Bobby, Mom and Dad are going to be at the bar right outside"

TNL esports Podcast 016 featuring Andy Babb from Super League Gaming, which hosts events at theaters around the country.

Amazon + Ticketing + eSports = Opportunity

AMAZON + TICKETING + ESPORTS = OPPORTUNITY

Amazon + Ticketing + eSports = The Opportunity (Photo: Benjamin Faust)

Amazon + Ticketing + eSports = The Opportunity (Photo: Benjamin Faust)

Amazon + Ticketing + eSports = The Opportunity (Photo: Twitter)

Amazon + Ticketing + eSports = The Opportunity (Photo: Twitter)

There's definitely a huge opportunity in taking on Ticketmaster alone, which generated $1.6B in revenue in 2016 per BTIG's estimates.

But let's look at how Amazon can turn this into an eSports opportunity.

 

WHO WOULD THEY BUY?

The Ticket Fairy's Investor List (Photo: Crunchbase)

The Ticket Fairy's Investor List (Photo: Crunchbase)

There are plenty of ticketing startups that Amazon could look at. After I sent that tweet, a former MLG colleague of mine alerted me to the The Ticket Fairy.

Just Twitch COO Kevin Lin, Justin Kan and Emmett shear - the co-founders of Twitch - and Y Combinator, which invested in Twitch and gave the incubator a massive return.

This isn't a guarantee that Amazon/Twitch will choose The Ticket Fairy but the investor list overlap is pretty amazing.

 

WHAT COULD THEY DO?

TwitchCon 2016 (Photo: Twitch)

TwitchCon 2016 (Photo: Twitch)

TWITCHCON

TwitchCon is the easy first option, the massive event that Twitch has held for the past few years celebrating their influencers, fans and platform.

 

TWITCH PRIME

Amazon's Twitch Prime Move Is Genius (Photo: Twitch)

Amazon's Twitch Prime Move Is Genius (Photo: Twitch)

Now let's go deeper and what I consider one of the most brilliant moves that Amazon has done with Twitch:  Twitch Prime

Remember, Twitch Prime is all about driving Amazon Prime memberships overall, as the latter automatically gives you access to the former and increased value to the Prime platform - I don't even want to know how much I've spent using Amazon Prime Now with 2-hour delivery in NYC.

 

EVENTS

In March, Twitch announced that streamers would get a cut of any game sold through their channel. 

Now imagine this scenario.

Any developer based event that Twitch drives the ticketing platform can be further deeply integrated with both Twitch Prime and Game Sales. 

It can go even deeper than that.

What if you got an Exclusive item via Twitch for attending that event that Amazon just sold you a ticket for?

Overwatch Loot Box Via Twitch Prime (Photo: Twitch)

Overwatch Loot Box Via Twitch Prime (Photo: Twitch)

 

EVENT PLATFORM

Matcherino's Events (Photo: Matcherino)

Matcherino's Events (Photo: Matcherino)

Last month, I analyzed Matcherino's $1.5M round and how that platform helps event organizers crowdfund prize pools and help distribute the winnings.

How does Matcherino work?

Matcherino With Twitch Login (Photo: Matcherino)

Matcherino With Twitch Login (Photo: Matcherino)

Oh you just use your Twitch login and connect your PayPal account.

See it now.

 

THE ESPORTS TICKETING OPPORTUNITY

Amazon's potential move into ticketing is them disrupting another industry - when will the first Amazon health care facility open?

What's the accretive value to Amazon overall to get into ticketing? Ill let the Wall Street analysts do the math on that one.

 

But there's a huge play between Amazon, Twitch, eSports and ticketing.