One of the hottest sports today isn’t played on a field or court. It’s played on a computer. eSports, short for electronic sports, has exploded in popularity in recent years, changing how gamers play, people watch, and brands advertise to get in front of engaged consumers.
In 2019, eSports prize money topped $1 billion for the first time, increasing 10-fold from revenue in 2010, with expectations that revenue will keep accelerating to reach $1.8 billion by 2020. Competitions can have prizes ranging far north of $1 million, as the importance of attracting top talent is being felt.
It’s basic business to realize that as brands are opening their wallets wider for top advertising spots, competitions have more money to award in prizes, perpetuating the industry tailwinds.
To that end, companies thriving in the space are commanding premium valuations. Seeing the eSports market unfolding in 2014, Amazon (NASDAQ:AMZN) got into a bidding war with Alphabet’s (NASDAQ:GOOGL) Google for live eSports streaming company Twitch, eventually outlasting the search giant to buy Twitch for $1.0 billion.
To understand the breadth of Twitch’s domain and the magnitude of eSports today, consider that Twitch viewers streamed over 2.72 BILLION hours during Q2 2019, equating to more than 72% of all live hours watched on the internet during the quarter. That handily beats any claims that juggernauts like YouTube Live or Facebook Gaming can tout.
Those that think this is just some counter-culture phenomenon are behind the curve. The global fanbase is more than 450 million, many of which are now using live streaming as the latest communication tool. For Twitch, users viewed over 81 million hours of “Just Chatting” in December, which was 7 million hours more viewing time than the top game (League of Legends) and 23 million hours more than the second most popular game (Fortnite).
Tech company Live Current Media Inc. (OTCQB:LIVC) sees an opportunity in the booming eSports market with boxing, a wildly popular sport lacking a dominant presence in online gaming. The Vancouver-based company is building a new game that bridges shortcomings in actual boxing, effectively developing “Boxing.com FEDERATION” in the fashion of “what boxing should be.”
Despite its global popularity, boxing is often criticized for being highly fragmented – there are more than 15 different governing bodies – with minimal pressure put on fighters to take on top competitors. Often times promoters take the higher-paying risk-off approach to schedule bouts.
Not in FEDERATION. Computer algorithms will constantly update a player’s ranking. Management says the rules will be that a fighter can challenge anyone within 100 spots of their rank. The player challenged, must accept the fight or automatically swap positions with the lower-ranked boxer.
Upstart fighters can hone their craft in an amateur league until they are promoted to the professional level. Fighters won’t earn cash prizes as an amateur, but will earn cash payouts when they reach the top 10 in one of the nine different weight classes at the pro level.
Using the same advertising model as all successful online games, the awards for pros could ultimately get quite lucrative for fighters, without all the sweat in the gym.
While challenges will be a daily occurrence across all divisions, FEDERATION management will control when championship fights happen. FEDERATION will want to market title bouts between the world’s best boxers to maximize viewership and revenue. A properly advertised venue could attract tens of millions of viewers across the globe.
With no real competition in the space, Live Current Media – which is also developing a mobile gaming sports app called SPRT MTRX – finds itself in an enviable position. The company has its sights set on the opening round to begin this fall.