In this chapter of the ESI in Katowice we take you through what was discussed during the panel Esports Investments – Where is the Value?
Seasoned investors and influential figureheads like Leonard Langescheidt Principal at BITKRAFT Esports Ventures, Hicham Chahine, CEO of Ninjas in Pyjamas and Arnd Benninghof, CEO of MTGx took to the stage in company of moderator Christopher Hana Co-Founder & CEO of The Esports Observer.
The panel instantly got to the point by highlighting where they see the value in esports.
For Hicham it is by bringing the fans closer to them through content. This means building a brand that can live outside of its original environment. But also all the business that can be build around the team brand.
Arnd recognised the mistakes made in the past and their decision to invest and partner with the esports endemics because they acknowledged they couldn’t do what they set out to do alone. He said: “We traditionally try to explain the future by looking to the past” Arnd said. “VR will change the game, esports is going to change the media landscape. Esports are super disruptive”.
“Gaming is everything traditional media wants to be”
For Leonard, just before explaining why team investments aren’t for them due to the fact that “not many, if any know how to monetise” and also that they want to avoid any conflict of interest, said: “Kids don’t spend the same way their parent used do. They spend on digital goods but are suspicious of big brands and poor products. We’re trying to leverage the competitive nature in people. We believe in the power of brands, but remain very selective in how we activate the brand due to the diversity of esports in general.”
Christopher was quick to react to the Leonard’s remarks and asked if teams can compete without multi-million investments.
Hicham was the first to reply:
“Money isn’t the hardest thing to raise. But If I was still a VC, I would never invest in a team”
“I don’t see a threat from VC-funded teams as they are playing catch up with those that have been around for quite some time like NiP”, Hicham added.
Following on, the panel agreed that the market is currently over-hyped and that it is important to build a stable ecosystem for the future.
Talking about the future, Hicham believes that revenue will depend on the types of teams and their partnerships, the broadcasting rights, revenue sharing with leagues based on popularity, merchandise and apparel and how all these parts of the company feed back into the team to keep it relevant.
He also added that high quality content that large non endemic companies find attractive is where the opportunity for growth lies and this will drive larger sponsorship deals but insists they should be for short timescales, a couple of weeks max.
MTGx’s Arnd was very clear when he states that “Open is healthier. More teams based on performance, more games with great zero to hero storylines is what makes stars and moments that brands want to be attached to. When the traditional brands see the opportunity then we are there.”
The panel then concluded on the mistakes they have made in the past and offered some free advice as a parting gift to the community at large:
Arnd:. “Our streaming platform was a mistake. We didn’t have the authenticity or credibility.”
Hicham : “Check the numbers. Especially those about engagement.”
Leonard: “Content is never enough. You need products and services.”
Esports Insider says: It’s hard to argue against the view that esports are over hyped at the moment and that investing in a team requires a fair amount of due diligence. Understanding how teams monetise in a closed ecosystem is fairly straight forward as everything comes from the top down, hence making it close to impossible to know truly how valuable it is compared to non franchised teams.