EWD: News for Week of 4/25/22-5/1/22
Topics: Partnerships, FaZe, OpTic, Valorant, Metaverse
Partnerships
FaZe Clan x Current
FaZe Clan signed a long-term partnership with Current, a U.S. financial technology platform. The partnership will give FaZe creators new tools and resources to creatively engage with fans using Current’s mobile banking products. Current will be named the official fintech partner of FaZe Clan.
This partnership will launch with Current sponsoring the finale episode of “Road to FaZe1,” the weekly livestream show that airs on FaZe Clan’s Twitch channel and gives fans a behind the scenes look at the FaZe1 global recruitment challenge. On April 28th, the top 100 finalists are narrowed down to 20 during the finale episode. The top 20 finalists will be announced live and awarded $1,000 on Current, including $250 to give back to their own fans. According to the press release, the winning creators will send the money to their fans instantly using their Current ~tags and in addition, all FaZe fans have the opportunity to win $500 each on Current by entering the code ‘FAZE1’ in the Current app.
Adam Hadi, VP of Marketing, Current said:
Over the past decade, we’ve witnessed FaZe Clan revolutionize gaming and internet culture as true innovators in the creator space. With this new commitment to each other, we’re able to work together to create meaningful cultural moments and produce content that’s not only engaging but also improves their fans’ financial lives, which furthers our mission at Current.
In the past, FaZe members Swagg and Rug collaborated with Current for promotions via money giveaways on YouTube, Twitch and Twitter. The ‘Road to FaZe1’ episode kicks off a more broadened Current partnership with the whole organization, which includes custom content and future Current experiences for FaZe fans.
Kimball's Take:
This is a great move for both FaZe and Current. Current is aware that marketing their innovative financial technology (AKA fintech) platform to an online-first generation of FaZe fans is a great way to have consumers switch to Current for financial services. Having that association with an organization of that magnitude will hold weight and influence for younger fans who are deciding on what debit card to get. My guess is Current wants to be on the top-of-mind for Gen Z and millennial consumers, and that's why we've seen them promote or do partnerships in the gaming space.
I've seen Current partner with a couple noteworthy streamers in the last several months. Streamer and pro player for OpTic Gaming Seth "Scump" Abner and content creator Louis "LosPollosTV" Sammartino both had sponsored streams with Current. Additionally, YouTube superstar MrBeast has done a $150K giveaway in the past with Current. These promotions not only drive attention and awareness to the Current mobile banking product, but doing it via money giveaways are probably the easiest way to incentivize fans to physically sign up on the app. We've seen other mobile banking service apps such as Venmo promote giveaways on social media called "#VenmoItForward" where if you share the post, tag a friend, and post your Venmo you have a chance to win some money.
ESL Gaming x Nielson
ESL Gaming and information, data and market measurement firm Nielsen announces a 3-year renewed partnership. This multi-year extension aims to enrich research standards in esports and evaluate brand partnership integration. According to the press release, the agreement enables ESL Gaming to regularly report monetary valuations to brand partners and advertisers based on Nielsen’s industry-leading Quality Index (QI) Media methodology.
Although the new agreement extends the already existing relationship that started in 2019, the scope of the partnership has been expanded to track more events per year and more broadcasts per platform and channel. Covering a total of 17 events, the collaboration focuses on four main areas:
Media & Sponsor Valuation: Measurement and tracking of media value for brand and media partners across major live-streaming platforms and broadcast languages.
Utilizing standardized metrics for esports viewership measurement and benchmarking across all relevant global and local live streaming platforms.
Community & Fan Analytics: Esports audience research analysis - both quantitative and qualitative consumer insights and analytics;
Mobile gaming & esports: Assessment of ESL Gaming’s new Snapdragon Pro Series, including evaluating broadcasts and partner integration directly within the corresponding mobile games.
Timo Krueger, Commercial Director Esports & Gaming, Nielsen Esports said:
We are working closely with ESL to understand better their challenges to provide the best and most beneficial data around partner valuation and fan/consumer behavior in a rapidly developing entertainment industry around the world.
Kimball's Take:
Smart of ESL to renew and expand their business relationship with a data and analytics firm that's so credible such as Nielson. One key takeaway I got from this is that Nielson has an industry-leading media methodology for quantitatively measuring the success of a partnership. In my sponsorship classes at UMass Amherst, we always talked about how to accurately measure and assess the ROI/outcome of a partnership based on money going in and value coming out. It's really a challenge to measure the media value of a partnership in a digital-forward space, so hearing about Nielsen’s Quality Index (QI) sounds like an amazing tool to have accessibility to in the gaming and esports industry.
Evil Geniuses Renews 4 Partnerships
According to an Evil Geniuses (EG) LinkedIn post, they have announced that LG Electronics North America, Anheuser-Busch's Bud Light, Secretlab and Elysian Brewing Co have all extended their partnerships with the organization. No other details have been provided, nor has any press releases been made available to read. I'll summarize the 4 partners previous deals and how they came to life below:
LG and Evil Geniuses announced their initial partnership on June 4th, 2020. LG was named the Official Gaming Monitor Partner of EG. LG UltraGear monitors were installed and utilized throughout the competitive practice and streaming rooms at the EG training facilities in Seattle and Los Angeles. The LG monitors were also featured in the team’s digital content, and Evil Geniuses players highlighted key features of the monitors through exclusive online LG UltraGear streams. Lastly, the LG UltraGear logo was integrated on the EG jerseys.
On March 4th 2021, EG announced that Bud Light is its newest partner as the official beer of Evil Geniuses. The press release stated that this partnership will be an "ongoing content mash-up" across EG and Bud Light's social channels. As part of the deal, EG and Bud Light gave fans access to in-game communications of their League of Legends team in a content series called "Evil Intercepts." Additionally, some of the biggest names on EG’s roster took turns broadcasting on “Bud Light Streams” hosted on Bud Light’s Twitch channel.
On July 21st, 2020, EG partnered with Secretlab to provide exclusive Evil Geniuses-branded chairs and equipping its esports teams with quality performance gaming seats. At the time, CEO of Secretlab Ian Alexander Ang emphasized EG's ability to grow into even more of an esports powerhouse in the future with their re-entry into Counter-Strike: Global Offensive and the League of Legends Championship Series. With EG's recent 2022 LCS Season Spring Finals victory, he was certainly not wrong with that statement nearly 2 years ago.
On March 25th, 2021, EG partnered with Elysian Brewing to become the first official craft beer of Evil Geniuses. According to the press release, "The two Seattle-based organizations share a passion for cultivating community and will tap into partnership opportunities locally, as well as domestically and internationally across Evil Geniuses’ global fanbase." The partnership spanned across EG's social media and content channels, as well as EG’s “LiveProud” platform. One of the marquee activations was a custom video content series called ‘Open Space,’ a multi-part episodic series showcasing EG's roster of talent.
SCUF Gaming expands OpTic and Envy partnership
Controller brand SCUF Gaming has renewed and expanded its 10-year partnership with esports properties OpTic Gaming and Envy Gaming. The renewed partnership will make SCUF the official controller of Envy’s Call of Duty League team OpTic Texas. The new deal also gives SCUF the "right of first refusal" as the official controller partner for any controller-based esports teams the organization may add in the future.
SCUF will additionally receive jersey logo placement for the OpTic Halo, OpTic Texas, and Envy Rocket League teams. Diego Nunez, VP of Marketing at SCUF parent company CORSAIR said:
Witnessing the growth of these brands over the years has been thrilling, and we can’t wait to continue this journey together, working side by side to provide gamers access to the best professional gaming equipment on the market.
Speaking of CORSAIR, the announcement also revealed that the sister company to SCUF under CORSAIR, Elgato, will sponsor the organization. The livestreaming equipment brand will supply OpTic and Envy influencers with its products. Both SCUF and Elgato plan to collaborate at live events and on various content campaigns. This includes the launch of product collaborations and limited drops, such as the new OpTic Gaming controller.
Kimball's Take:
For one, it's really impressive that SCUF, OpTic, and Envy has maintained a 10-year long partnership in the gaming and esports. This even includes when Envy and OpTic were not merged entities. Additionally, seeing SCUF get the right of first refusal to be a controller sponsor for any new controller-based teams that are brought on is fairly interesting.
Lastly, the nearly 10 minute video with Envy CEO Mike "Hastro" Rufail, OpTic Texas President Hector "H3CZ" Rodriguez, and COD Esports legend Seth "Scump" Abner going back-and-forth on some iconic moment in their team's history was truly amazing. The 2 teams prior to being merged were the most long-running and storied organizations in Call of Duty esports, so the video idea was simply perfect.
Other News
Riot Games Announced an Overhaul of its Valorant Esports Structure
Riot Games announced a huge overhaul for its Valorant esports leagues structure starting in 2023 and beyond. In Riot Games new format reveal, they highlighted 6 major changes that they believe will create an even better player and fan experience and propel Valorant to become the #1 competitive FPS in the world. They layered it out in a pyramid visualization:
Path to Pro (bottom of Pyramid): There will be a new in-game competitive mode that "every player will be able to envision their personal path to pro." The new system will go beyond a ranked playlist, and thus, will provide the opportunity to qualify for domestic leagues in their region.
Domestic Leagues (2nd-layer pyramid): They will build off of their VCT Challengers model to cover more players in more countries and regions. The domestic leagues will be integrated with the in-game tournament mode mentioned above and will provide more accessibility for upcoming talent to make a name for themselves.
Game Changers (2nd-layer pyramid): In 2021, they had more than 40 VCT Game Changers events in providing opportunities for women in Valorant esports. In 2023, they plan to invest more into this league by adding more tournaments around the world, more training sessions for amateur talent, and continue the Game Changers Championship.
3rd-Party Tournaments (2nd-layer pyramid): Just like they plan on doing in this year's off-season, they will open up opportunities for 3rd-party tournaments. They expect to see many storylines take place during the off-season tournaments and ultimately believe 3rd-party tournament organizers can explore a "pre-season" window for teams to test new line-ups.
International Leagues (3rd-layer pyramid): In 2023, they plan on launching 3 international leagues in premier-level week-to-week competition on LAN and in studios with fans. At this level, they will introduce a long-term partnership model with a select number of teams in each league. The 3 leagues will be split up like this: America's (North America, Latin America, and Brazil), teams from Europe, Russia, Turkey, and MENA for another league, and Asia/Oceania (Southeast Asia, Korea, Japan, South Asia, and Oceania).
Global Tournaments (4th-layer pyramid): They plan on keeping global tournaments in 2023. The top teams from international leagues will compete at Masters and Champions events. Additionally, Game Changers will continue to have a Championship event. They also want to try and have a live audience at these events going forward.
Kimball's Take:
If the current announcements and future overhaul structure sticks, I think this is a slam dunk for Riot Games hopes of becoming the #1 FPS esport. Starting with the most significant change of having international leagues, no required entry or franchise fee for participating teams is very smart. We've seen other esports such as OWL and CDL by Activation Blizzard have a city-based franchised league with $20M+ entry fees. Although it creates sustainability and an influx of revenue for the publishers, it creates restrictions and limits the ability of esports organizations to enter into those respective esports. For example, the CDL struggled to field a 12th team and it wasn't until the near start of the 2022 season that Oxygen Esports bought into the league. Most importantly, no barriers to entry will help teams from underrepresented regions to participate in the league.
It's also great that Riot Games will further expand its Game Changers program for women striving to become esports professionals. It's a necessity for esports leagues to have an infrastructure in place that allows for women to get scouted, develop, and become superstars in the Game Changers Tournament series.
FaZe Clan's Planned $1B USD Public Listing in Danger
FaZe Clan's latest merger filing with the U.S. SEC revealed ongoing financial problems at the company, This news comes after FaZe Clan's plan to become a $1B USD public listeed company via a merger with SPAC (Special Purpose Acquisition Company) B. Riley Principal 150 Merger Corp. (BRPM).
According to BRPM’s amended S-4/A filing, BRPM indicated that FaZe fell short of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization projections) projections by $9.74M. This is because of less than anticipated transaction proceeds, increased revenue costs, a higher than expected cost for its content budget, and additional executive hires. In addition, the report stated that FaZe's financial performance in 2022 may differ from what was forecasted, and the results in future years may also be affected. According to Sports Business Journal, FaZe's company’s revenue and gross profits slightly exceeded expectations at $52.85 million in annual revenue ($50 million forecast) and $11.30 million in annual gross profit ($10 million forecast). However, FaZe’s bottom line turned out to be a lot worse than expected in 2021. Worth noting, 2021 financial results also revealed that almost half of FaZe's revenue was generated from brand sponsorships, which contributed $24.87 million.
According to SBJ's Kevin Hitt and Tobias Seck's article, this delay in its merger process with BRPM creates a major issue for FaZe Clan going forward. The company's business strategy and financial forecasts was based on the assumption of completing the merger by Dec. 31 this year. Additionally, the organization gained access to at least 75% of the proceeds from BRPM’s $173 million trust account and the planned $118 million PIPE (private investment in public equity) investment at or around September 2021 to finance its growth strategy. Instead, FaZe Clan’s audited financial statements have now raised substantial doubt about its capability to continue this merger. This means that it must generate sufficient revenue and raise additional funds to stay afloat.
SBJ also noted that the numbers provided in the initial merger filing reveals that the actual preliminary enterprise value for the post-merger company was set at $713 million and inflated by a planned cash position of $274 million. The $1 billion market capitalization was dependent on the completion of the now-delayed $118 million PIPE investment deal. The current FaZe Clan entity was valued at $650 million in total equity value on a pre-money, cash-free and debt-free basis.
Kimball's Take:
To be completely up front and honest, there's a lot of financial language in the articles I read about with this situation that I'm not well-versed in. I highly suggest reading the SBJ and Esports Insider articles on this matter as they laid it out in much more detail.
Looking beyond the very detailed financial information, FaZe Clan’s plans to go public potentially falling apart is certainly not a good look for both the organization and the esports industry. FaZe Clan has been under a microscope since they announced this, and I believe that it could put more esports teams on notice about their valuation numbers being potentially inflated too. According to Esports Insider, they believe these increased costs will not stop the deal from happening (but it certainly could delay it)
Twitch Streamers ImperialHal, Hiko, Maximum and More Sign With UTA
United Talent Agency (UTA) revealed that they've signed Twitch streamers ImperialHal, Hiko, Maximum, and much more in recent months. Among them, they've signed Apex Legends personality Phillip “ImperialHal” Dosen; content creator for 100 Thieves Spencer “Hiko” Martin; Arthur Maxwell Smith (“Maximum”), leader of World of Warcraft guild Limit; and Brazil-based team LOUD Esports.
According to The Hollywood Reporter, the signings are a part of the agency’s push over the to bolster its gaming division. In the last 6 months, they've brought on 25 esports content creators, professional players and gaming organizations to its talent roster. Among UTA’s top gaming clients are NickMercs, Pokimane, FaZe Clan, Valkyrae and chess streamer Hikaru Nakamura. The agency represents game creators including Ed Boon (Mortal Kombat), Playdead (Limbo, Inside), Moon Studios (Ori and the Will of the Wisps) and Glen Schofield (Dead Space franchise, Call of Duty: Modern Warfare 3). In total, UTA has representation for 103 gaming creators and professional players on their talent roster.
Kimball's Take:
It's clear to this point that UTA leads the pack amongst sports marketing agencies that have talent representation in this space. Take a look at their full roster of creators here. Some sport marketing agencies such as CAA, Loaded, and WME represent big-name content creators such as DrLupo (Loaded), Ninja (CAA), TimTheTatman (WME), and Shroud (WME).
Logitech and Bretman Rock Host First Music Awards Show in the Metaverse
Logitech and Bretman Rock hosted the First Music Awards Show in the Metaverse called the 'Song Breaker Awards.' This music awards show took place on Saturday, April 30 on Roblox. According to Logitech's press release, The awards honor "groundbreaking creators shaping pop music through dance challenges, memes and trends they have created and shared on social media, especially on TikTok and YouTube, over the past year."
The immersive world is designed as a creator-centered, fun-first experience for the community to engage and play with their favorite creators. The host, Bretman Rock, is a digital entertainer who will be joined by multi-GRAMMY® Award-winning artist Lizzo. She also made her metaverse debut on the Song Breaker Awards stage. Other creators joining this celebration is MeganPlays, Twitch streamer Shroud, and musician Jaden Smith There was also a music performance by singer-songwriter GAYLE.
According to Logitech, the 'pre-show experience' on Roblox had fans taking a ride on a rollercoaster, collect 'Creator Coins', earn badges through gameplay to unlock special items, take a selfie XL photo with friends, hang out at the Creator Society Cafe and DEFY LOGIC Lounge, and buy exclusive merchandise like Pop Key hats, Litra Glow wings and Lizzo concert t-shirts for your avatar from the Logitech For Creators virtual store. Additionally, proceeds from all digital merchandise sales will benefit MusiCares, the leading music charity. Founded by the Recording Academy in 1989, MusiCares acts as a safety net supporting the health and welfare of the music community.
Meridith Rojas, Global Head of Talent and Entertainment, Logitech said:
This year, we pushed the boundaries as we continue to reimagine what a creator-focused award show could look like. In building this immersive program in the metaverse, we’re taking inspiration from the online communities blazing the path in web 3.0. It’s not a one-way conversation, it is a two-way experience bringing creators and their communities together to create.
Kimball's Take:
Everything about this virtual experience sounds purposeful and memorable for everyone participating in the creator-focused award show. Whether it be taking a ride on a rollercoaster, unlocking special in-game Roblox items, or buying exclusive merchandise for your avatar at the Logitech for Creators virtual store, Rojas and the Roblox team hit the nail on the head with this immersive program. I especially liked what Rojas said about their strategy and inspiration of building online communities in the metaverse. They could've easily just signed a bunch of big-name artist, had them perform, and be done with it. However, it's key to have a two-way experience for both the creators/musicians involved and communities that Roblox and gaming have curated over the years.