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Nobody invested in Walmart because they only sell footballs and grass stain remover to the NFL

July 10, 2019

 

A lot of people understand one part of the esports ecosystem - the part that resembles the NHL, NFL, and NBA.

 

However, there are 2 parts, or models, within the esports ecosystem:

  1. Team-driven Esports Model - teams play games, organized in leagues, distributed on platforms to fans - same as the NHL. This esports model accounted for $149m in prizing in 2018 and about 10% of the gaming viewership on the #1 and 2 esports distribution channels - Twitch and YouTube Games. Only 10%, what is everybody else watching?

  1. Player-driven Esports Model - a larger part of the esports ecosystem has gamers playing games, organized or not, distributed, or not, on platforms to fans. The players may earn revenue by streaming and/or competing for $500,000 in daily prizing or $182M in 2018. The gamers playing games, organized or not, distributed, or not, get way more views and more prize money.

Fundamentally, other than viewership and share of market, the differences are: 

  • level of organization of gamers

  • venue, travel, TV production, and salary costs are very high in one model and not the other

  •  

"Nobody invested in Walmart because they only sell footballs and grass stain remover to the NFL."

 
One More Thing - esports achieve high production costs for free
 

Achieving high production quality with low costs (free) is super easy with esports - not with sports. 

We don’t know how to produce and distribute sports at a high quality for a very low price (free) - esports we do. 

 

The vast majority of Fortnite viewed on Twitch is not up to a camera or production crew. Fortnite production quality is mostly up to the game developer. You don’t need a 100 person crew to stream LeBron playing Fortnite to tens of millions of fans. High quality production and distribution is free, has massive reach, and excellent engagement and LeBron doesn’t have to be good at the game and he doesn’t have to leave his house - a huge advantage in LA traffic.

 

 

 

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