#1166 – Competitive Gaming Under the Gun!

The reality of technology trends to generate serious revenue has been placed under the microscope in recent months, as the “Crypto and Techno Winters” are felt through layoffs and business restructuring. There are a number of these elements that touch the entertainment scene, which we will now investigate.

Competitive Gaming Under Pressure

Concerns regarding the rigidity of the eSports sector have been in serious doubt as the sector seemed to be in freefall with the closure of teams and the abandonment of event operators. What has been seen as one of the most important impacts in the sector came with the news that Counter Logic Gaming (CLG), one of the largest eSports communities, was linked to rumors that many of its employees had been laid off. This news came just as owner Madison Square Garden Sports (MSG) was in the final stages of selling the operation to NRG Esports. 

NRG Esports is reported to have paid an undisclosed sum for the CLG operation and remaining ‘League of Legend’ (LoL) entertainment group. This operation is the only component of CLG that had not seen mass layoffs of their staff. NRG is an eSports organization running competitions based on popular leagues, with full Twitch and streaming support, and is expected to add the League of ‘Legend Champion Series’ (LCS) community too their ‘Rocket League’ and ‘Overwatch’ streams. For many observers, it seems that a gold rush of acquisitions of popular leagues is being undertaken, towards establishing a supported and profitable business model away from much of the hyperbole that surrounded the sector.  

In other news surrounding eSports development in the market, Savvy Gaming Group, a subsidiary of the Saudi Arabian government’s Public Investment Fund (PIF) – an investment operation we have reported on numerous occasions in The Stinger Report – has once again stepped in to invest in the eSports and immersive technology scene. It was announced in April that the group had invested $38b towards growing the Saudi territories’ investment in videogaming and eSports competitive entertainment.  

The impact of the decline in the eSports sector has been felt across the international markets, one of the fastest growing markets of Asia. Several developments have befallen the Chinese eSports community, ranging from several leading eSports teams being restructured following prominent departures or ceasing operation completely. News is circulating of the departure of popular players from teams, or the complete closure and disappearance of once prominent eSports leagues in the territory. However, sources in the sector seem adamant that the competitive entertainment is still a viable draw in the country.

The funding infrastructure that supported the eSports boom was linked in some part to blockchain and crypto currencies. As crypto has started to falter, the funding seems to have vanished from eSports and has seen the cracks revealed in the competitive gaming ecosystem.

One of the latest victims of the current “Crypto Winter” was revealed with news that the Australian banking and trading regulatory commission (ASIC), had cancelled the license to trade of Binance Australia – at the time one of the world’s largest crypto exchanges. This was the latest license removal for the crypto service. This has seen a curtailing by some in their eSports investment as funding is now restructured. Regarding crypto and the blockchain, the slippage in investor interest in this scene was revealed. Recent media coverage reported that blockchain-based game development has seen a drop to 20-percent of venture capital raised in the first quarter, compared to other years.

Not All Gloom for eSports!

Not all investment has abandoned eSports projects, however. It was announced in April that a $20m Series A round of investment had been secured for Goals, a company developing series of soccer-based games for eSports adoption. One of the investments of this round included backing from soccer team Tottenham Hotspur.

Regarding crypto investment, we see sportsbook and crypto casino developer Stake.com announce their increased investment into the eSports scene, with a partnership with Oddin.gg – an end-to-end eSports B2B betting platform. The ecosystem created to allow the ability for members to wager on the eSports events through a platform supported by a crypto-gambling leader.

Likewise, the full rendering of the ‘Six Flags Fiesta Texas’ eSports environment was revealed. Called a “first-of-its-kind” venue branded ‘ESIX Gaming’, the operation has partnered with Coco-Cola to create a competitive gaming campus. This includes dedicated playing terminals (50 stations), event stage, Coke VIP lounge, and broadcast studios. All with its own bar and restaurant support. The design was developed in collaboration with UTSA’s registered student organization, ‘Roadrunner Gaming’, towards attracting players and developing the needs of the eSports local community.  

Not just in North American, but also in the Southern Hemisphere, we see investment in new spaces for the competitive society. It was announced that Sydney would see the largest eSports venue in that hemisphere to date. Covering over 2000-sq.m. and expecting some 400,000 visitors in the first year, ‘Fortress’ is the latest in the venue chain to open in their territory. Comprising eSports stations, competition stage and entertainment, the new venue has opened in the Central Park Mall in Sydney. The operation is hoping to tap into the Australian gaming audience, who made the gaming industry, in this territory, over $4b last year. 

This continued investment and support of eSports was reflected by Esports Entertainment Group (EEG) who, in a press statement, revealed they had sent a letter to their shareholders stating that, even though they are undertaking ongoing restructuring of their business to enhance operation efficiency, they were extremely confident in their ability to establish a dominant position within this high-growth industry and drive long-term profitability. EEG is a business-to-consumer (B2C) iGaming operator who operates under a Malta Gaming Authority (MGA) license. Their restructuring had seen the layoff of some 158 full-time employees, with the aim to lower operating expenses by over $4m. But, according to a statement released, the corporation still felt that the eSports betting landscape was their specific focus towards establishing EEG as a leader in this rapidly emerging market. 

So, while we are seeing a serious cooling of interest, eSports is still receiving serious investments – such as the announcement that Mysten Labs had raised over $300m to launch high-end games on their ‘Sui Layer 1’ blockchain platform, creating a dedicated development community to supply the best games within this blockchain-powered ecosystem. This indicates serious competition towards establishing a standard platform for developers to adopt. 

What we are seeing is a land-grab breaking out, as recognition of crypto, along with bitcoin and NFTs, slow down. Investors are now scrambling to look towards their returns from competitive gaming.     

A Question of Home AR Shooters!

While talking about competitive gaming using new tech, we have seen a build-up to the launch of a range of Mixed Reality (MR) headsets, with the prosumer ‘Meta Quest Pro’, and ‘Apple Reality Pro’ – as well as previous abortive investments into the consumer AR scene by Magic Leap. As well as incorporating the inclusion of MR (pass-through) elements onto existing VR headsets, such as the Meta Quest 2 and 3, pass-through tech allows a headset to capture real-world visuals, while incorporating virtual elements that interact with the space represented in real-time. To prove the interest in these respective platforms, the systems have the ability to play shooting games within the user’s home, with targets and opponents represented virtually and superimposed over the real-world visuals, in what some have called “AR Shooters”.

A recent demo video that has been circulated on social media, demonstrates a First Person Shooter (FPS), with the user wearing a Meta Quest Pro, running around the rooms of their friend’s house, shooting realistic assailants represented virtually, but interacting within the space with objects in the rooms – while the player shoots at them with his virtual sidearm. The video is meant to be demonstrating a new game in development for these new MR platforms. However, it also illustrates, by its realism, an alarming similarity with bodycam-videos that have appeared on the news channels of police officers defeating recent school shooters in America. And this raised questions regarding the practicalities of this entertainment experience for consumer usage.

Many of our readers may not be familiar with a similar situation from the amusement industry’s history. Back in the 1980s, the boom in lasertag equipment had seen the establishment of this amusement venue platform, with many FEC operators including this new competitive shooting experience within their facilities. As with all popular fashions, developers considered creating a consumer version, riding the wave of popularity. Toy manufacturer EnterTech launched, in 1986, their ’Photon’ – a home-play version of the original 1985 commercial system that ushered in lasertag’s popularity. The toy came with ‘Photon Phaser’ guns, player helmets and targets. But, after an initial successful Christmas sales period, by 1989 the toy range would be discontinued. Another manufacturer, Worlds of Wonder, also launched their own line of toy laser guns, and also end ended the range ignominiously.

As the head of the Lasertag Association explained, the core reason for the failure of consumer lasertag systems was the fact that commercial FEC-based arenas offered an “otherworld” experience, with wholly themed play spaces including effects that far surpassed the mundane playing of the home system. The sophistication of the commercial weapons vests and scoring surpassed anything a toy replica could offer. The robust play of the lasertag game and durability of the home toy systems was another factor – constantly breaking, with no significant battery life compared to the commercial, these factors soon saw interest in this toy diminish. All this was further compounded by alarming bad publicity. The 1987 fatal shooting of a teenager by a San Bernardino County sheriff’s deputy broke onto the news. The teenager was shot while playing in their backyard with their friends, while using the Worlds of Wonder lasertag gun system. The shooting incident took place, as the deputy responded to a report about “a person with a gun”. This was just one of a spate of incidents that were reported during this period, adding to the souring of the idea of home lasertag. 

Now jump forward some forty-decades and we are once again confronted with home shooting experiences, vying for popularity against the commercial entertainment alternative. Numerous demonstrations, over the last few years, have attempted to herald these new “AR Shooters”. One of the first being promoted was the ambitious claims of ‘Dr. Grordbort’s Invaders’ – an AR shooter that had players wearing the ‘Magic Leap One’ headset and using a controller to shoot at hordes of robotic invaders. Co-developed between Magic Leap, working with creative team, Weta Workshop, the original grandiose claims of the game when previewed in 2015, were greatly tempered when finally released in 2018 – eventually side-lined, and released only as a free Beta game app.

Now with 2023, we see the latest attempt to establish AR/MR headset technology in the mainstream. Meta has added the capability of MR pass-through to their Quest 2 and Quest Pro headsets and this is also planned for the soon-to-be launched Quest 3 system. Meanwhile, the technology giant Apple is suggested to be about to present (in June) their new MR headset platform. All this, while at the same time, the popularity of the commercial entertainment space has been for multiplayer VR free-roam arenas – dedicated spaces that place the player into a virtually created “otherworld” space, able to shoot hoards of the undead, aliens or combatants. 

At present we do not have a dedicated AR equivalent for this space, but it is suggested that many of the consumer game developers working on “AR Shooters” will soon realise the limitations of a consumer release and pivot towards deploying their game for commercial application. And then we can expect to see a brand-new entertainment experience focused for success on location-based entertainment. All this while the original lasertag experience continues to be as strong as ever – and finding new markets internationally.