#1136 – The Growing Influence of eGaming

The movement in the eSports and Skill Gaming scene has continued to gather momentum, including after the suspension of the international lockdown measures with the end of the Global Health Crisis. Many observers expected that the interest in streamed eSports would have subsided, but many now are seeing the entertainment move to a new phase of adoption. And now we chart some of these developments. 

Emergence of Skill Gaming

There are some questions that have risen to the surface about the once fabled new concept of “Skill Gaming” (first reported in 2014). The concept of offering videogame play with a gaming/wagering element had been promoted as the next big thing only a few years ago – and had seen incredible investment, with even major amusement brands licensing their content to be incorporated into these systems. By 2020 the shine had come off the concept, with the failure to deliver any of the promised gaming business revenue on test. 

The failure of a number of these proponents being able to achieve gaming licenses was partly due to the less than stellar records of senior executives associated with the operations. While some would like to use the coverall of “killed by COVID” to coverup the failure to deliver by Skill Gaming, it is more than obvious that this concept in the proposed iteration was a busted flush – and those associated are keen to brush the debacle under the carpet.

Prominent names in the Skill Gaming revolution included GameCo, Gamblit Gaming, and Synergy Blue, to name just three of the most hyped – which have seen major upheaval, executive restructuring, headquarters closed, and abandonment of location testing on casino floors. Operations such as GamesCo had raised over $35m from operations such as Forest Investment Group and signed licensing agreements with BANDAI NAMCO to use prominent IP such ‘Soul Calubur’ – but eventually have suspended plans, at least temporarily. Meanwhile, other companies, such as Gamblit Gaming, who also licensed BANDAI NAMCO IP such as ‘PAC-MAN’, have pivoted their activities, now focusing on their online mobile and desktop gaming activities, having temporarily closed their headquarters and turned to working remotely. The concept of skill-based videogame gambling seemed not only to fail the regulatory challenge, but just plain failed to deliver. 

An example of the casino industry’s continued love affair with the integration of video amusement within their facilities was seen with the announcement that Caesars Entertainment would be opening, in their Bally’s Las Vegas casino resort, a new entertainment venue called (imaginatively enough) ‘ARCADE’. This will represent an 80-amusement machine location, comprising classic and modern amusement pieces, covering a 7,000-sq,ft. location that had previously been occupying the ‘Caesars Sportsbook’ area. This development is part of the rebranding and modernization plans for the casino into the ‘Horseshoe Las Vegas’. This is the latest installation of an amusement offering on the casino floor, following the development of ‘Level Up’ for the MGM Grand casino opened in 2016. The casino operation is looking at a means to capture the entertainment and videogame audience back into their venues – and several modernizations plans for Las Vegas operations are in progress, including some element of location-based entertainment. 

While Skill Gaming may have failed to find its footing at this point, there are other aspects of the gaming culture that are attempting to make inroads into the casino scene. In June it was announced that developer Deco Esports had launched a prototype gaming kiosks station. The system was demonstrated at the ‘Casino Esports’ conference and presented a turnkey platform that could be deployed onto casino gaming floors, to offer wagering and competitive eSports, generating new revenue from video gaming. 

Regarding the consumer aspects of Skill Gaming, it was announced that Skill-based betting platform Players’ Lounge had raised $10.5m. This raise was led by Griffin Gaming Partners, along with Comcast Ventures, Samsung Next, True Capital, and others. This investment will grow the operation’s platform which allows players to bet against themselves in “challenges”. There are plans to create a mobile app based on the platform.  The Skill-based eSports scene is having more success.  

Esports Choppy Waters

The eSports sector has been seeing a lot of turbulence in recent months – some of this can be linked to its association with Crypto Currency and the NFT market. However, a lot of the developments can be seen to be the continuing growing pains of the platform, to return some of the vast investment made into the sector previously. It was reported that EBET (formerly known as Esports Technologies), was undergoing major restructuring, revealing that it had laid off a significant number of employees and ended key strategy advisories. At the same time, Sharpr media reported that EBET was also shifting the business focus away from eSports Betting and will instead be focusing on its international casino gambling business involvements. The corporation had invested considerably in the eSports space but was now moving on – eSports betting seeming incredibly volatile at this point.

It was also revealed, during August, that Allied Esports had posted a net loss for the second quarter of $7.4m (this was up from net loss for the same period in 2021 of $6.3m) – as reported by Hitmaker.net media. The eSports management and organization group held some 91 events and was heavily promoting its business, as seen in our reporting of the ICE’22 eSports arena presentation at the event. The company had also been one of the first to roll out an NFT-based “global rewards program” for its player-base. Back in June it was also reported that Canadian gaming and esports company Enthusiast Gaming had seen a net loss for the first quarter of some $13m. Meanwhile, at the same time, it was reported that entertainment and eSports company FaZe Clan had reported first quarter (for the end of June) losses of some $9m. The losses, in many cases, were blamed on marketing costs and restructuring of their management operations – it is expected that many other such reporting can be expected.  

But as all things, eSports seen has seen lows, as well as major highs. Along with corporations failing to hit targets and announce first-quarter losses, there have been several new funding raises. One example saw Oddin, an eSports odds providing service, announcing they had achieved a $4.5m raise that included main investors Genting Ventures and Velo Partners. The company will be using the raised funding to expand their partnerships, such as the newly established agreement with Esports Entertainment Group.

For the eSports betting scene, the market has flourished as an aspect of the online gambling scene. During 2021, it was estimated (by the likes of Venture Beat news media) that the global sports eSport betting market would see total wagering reaching up to $8b, seeing the revenue achieving a 7-percent growth on previous estimations. It is these kinds of phenomenal numbers that have seen the activity for the casino and land-based gaming market to have a share of the eSports betting landscape. Much of the future growth in this sphere was also seen as circling around AI applications to chart odds modelling and wagering technology, including the latest sports betting apps.

Regarding the deployment of Sports Betting into the mix, the hospitality sector saw the opening of a brand-new concept that married sports betting with a social entertainment venue model. It was announced that the first ‘Sports & Social DraftKings’ would open near the end of the year in Michigan. The original ‘Sports & Social’ chain of social entertainment venues offers a mix of sports games, amusement, pin bowling, and extensive food and beverage offerings. With the new concept, the idea now includes a sports betting element, with patrons able to wager through a mobile sportsbook app at the venue – an app developed by DraftKings, a digital sports entertainment company. This is the first of a planned rollout of the new venue concept with this betting environment and we will be following the reaction to this new approach to sports betting in an entertainment location.   

Emerging new Territory of Saudi

One of the new areas of the global landscape that is looking to embrace eSports is that of the Kingdom of Saudi Arabia (KSA). The Arabian Peninsula has been undertaking major investment across infrastructure and business, following guidance from its leadership, and has been one of the first to look towards incorporating a dedicated plan to embrace eSports across its social and leisure activities.

The Stinger Report owners were invited to play their part in shaping the narrative and attend the conference ‘ThinkTech Talk 2022’ – held in Riyadh, the capital of Saudi Arabia. The conference was part of the Gamer8 eSports and gaming event, one of the largest in the world. The addition of the conference is supporting the eGaming sector and sharing technology and business investment plans from across the globe and focused on Saudi investment. The whole gathering, held in a dedicated ‘GameDev Zone’, was presented by sponsor Nine66, along with others.

The event was also organized by the Saudi Esports Federation, and had built the Gamer8 event to focus on the four key pillars of offering a live entertainment from music and festivals, a professional eSports gathering and “Next World Forum” – bringing international speakers and presenters to the forum as a component of the event. The specially selected location in Riyadh had been transformed into a festival and entertainment hub. Temporary structures were constructed, that offered the amenities to support the ambitious events. Gamer8 was created by Gamers Without Borders, as a global gaming and eSports festival, held over an eight-week period during the summer season in the area.     

Travelling especially to the ThinkTech event, international speakers included the heads of several investment firms focused on eSports and gaming funding. This also included representation from the British Esports Association. At the same time, local executives presented to give insight into the efforts they have undertaken to drive the market. The keynote presentation, by Spider Entertainment, offered a glimpse at the wider aspects of eSports in a location-based entertainment (LBE) environment, and how gamification in all its elements is being applied to the Out-of-Home Entertainment landscape with the latest technology. It is this focus on the future of festival and social entertainment that is seeing great investment within the KSA.

The well-attended forum was also televised, and streamed internationally, and allowed the global sector to understand the place that Saudi can play in defining the eSports landscape. Investment has already been made by the Saudi Arabia’s Public Investment Fund (PIF), in several major videogame publishers and service providers, from their $28b funding reserve. These include the support of Nintendo, Embracer Group, Activision Blizzard, Electronic Arts, and Take Two, to name a few of their investments. Along with this, the PIF has supported eSports operations directly and looks to grow its presence in this scene. Many leading corporations are looking to have corporate representation in the Kingdom. Also, within the KSA, there has been the incredibly investment and development of the NEOM project, to develop a “Smart, Innovative & Sustainable City”. Within the plans for this metropolis for the future, the consideration of entertainment and leisure have been factored into designs, and the far-reaching concept of eGaming has also been added to the latest planning. 

The emergence of eSports in Saudi is marked by other international investments being made, concerning the three key legs of the technology. First being its application for sports and recreation, secondly as the foundation of educational process, with many colleges and schools running eSports courses towards growing the new teams for the future, and lastly as a mass audience entertainment, with a growing following, streamed, and live events. It is expected that the closer support from governmental and corporate alignment to define the future of eSports and e-Gaming, in general, will play a major part in the future international investment in entertainment.