Embarking on novel initiatives can be intimidating. Yet, how would esports figure out how to be profitable without any exploration, particularly in the cut-throat entertainment and sports domains? This is a time for innovation in esports, not merely a replication of strategies from other domains that may not necessarily apply. A shift from traditional paradigm directed by inventive leaders could pave the path of success.
Under the leadership of founder and CEO, Andy Miller, NRG Esports is breaking away from the sluggish North American esports landscape by consistently investing and amplifying their endeavors. Miller, who also had invested into NBA’s Kings previously, always found himself to be somewhat iconoclastic and continues to believe in the potential of esports.
Over the past year and a half, Miller substantiated his belief by obtaining a slot in Riot Games’ North American League of Legend circuit (LCS) from Counter-Logic Gaming and participating in another Riot rivalry – the Valorant Champions Tour (VCT).
Miller expressed his preference to associate with Riot considering their deep investment and long-term vision for esports. He reflected on the valuable experience with LCS and Valorant while recognizing their significance in structuring NRG’s presence on an international platform necessary for business expansion.
Revenue Diversification
The business model of NRG includes new streams of revenue to fuel its progress. According to Miller, they earn platform revenue from Youtube and similar platforms, and also perform well in attracting both usual esports sponsors and fresh entities to the industry. Apart from this, their sources of revenue constitute merchandise sales, digital sales of in-game elements, and esports tournament winnings and event prize money.
Miller highlighted the primacy of securing more sponsors and magnifying digital item sales for NRG. The team has enlisted some substantial non-traditional sponsors like Kia America, Carvana, and Spectrum. The latest addition to their sponsor list is Panda Express which will sponsor NRG’s Rocket League team, a leading name in the history of the Rocket League Championship Series (RLCS).
Digital sales, as per Miller, remain primarily unexplored and hold the likelihood of surging the revenue for esports organizations as they are part of a larger landscape.
The potential of pushing profit margins could depend on an increased exposure to the vast audience. Digital items are perceived as future revenue makers by Miller who wishes for more publishers to invest in them thus initiating co-operations with esports organizations and their players to advertise those elements. He identified it as an influential revenue pathway for the industry, especially since esports doesn’t involve conventional revenue sources like arena or tickets sales and food sales.
Panda Express is now a part of NRG Esports’ non-traditional sponsor team
Recently, two major mobile games, PUBG Mobile and Honor of Kings, announced considerable payouts for their esports scenes, each offering $3 million in prize pools for the upcoming Esports World Cup in Saudi Arabia.
Sam Braithwaite, VP of game ecosystems at ESL FaceIt Group (EFG), pointed the sizeable part of global gamers prefer mobile gaming. Often these games incorporate profit-making esports qualification circuits which generate revenue for the publishers to invest back into their esports environment.
However, North American esports establishments are finding it challenging to monetize on mobile despite its potential to draw vast audiences. Duran Parsi, a lawyer and ex-head of collegiate esports for EFG, mentioned the rapid expansion of esports in Asia. Simultaneously, he highlighted the challenges faced by organizations hesitant to commit to extending their scope there.
Some of these barriers involve the recruitment of proficient operations staff which demands language fluency and other skills. The procurement of such staff could exceed preset budgets, making such ventures infeasible for North American organizations, as per Parsi.
But the question remains, can North American teams afford to be observers? Mobile gaming’s growth isn’t only evident in increasing prize money but also in rising viewership and participation. PUBG Mobile, Garena Free Fire and Arena of Valor have been popular mobile games for years in regions like Southeast Asia and Brazil where players find phone gaming easy and affordable over PCs and consoles.
The impressive prize pools and viewership of mobile esports competitions are now challenging traditional PC and console games, suggesting a possible considerable shift in the esports domain.
As noticed by Braithwaite “The growing player base of games like Mobile Legends: Bang Bang and Brawl Stars is leading to huge prize pools which might surprise North American fans unfamiliar with mobile esports culture but not surprising for fans from other parts of the world. He expects the audience growth in Snapdragon Pro Series mobile esports league to continue and pay off in the future.”
- ESL FaceIt Group, a Saudi-owned company, is axing 15% of their employees.The move is outlined by co-CEOs Craig Levine and Niccolo Maisto in a company message to support their ambition of company growth and profitability. ESL FaceIt organizes international esports competitions for games provided by Valve, including Counter-Strike and Dota 2, as well as games offered by Activision Blizzard, including Overwatch, StarCraft II and Call of Duty Mobile.
- Ubisoft’s video game publisher might have successfully decoded how to make esports ventures profitable for all parties involved, writes Digiday. This comes following the “achievement” of the latest Six Invitational competition in Brazil. It is marked as the year-end championship for the Rainbow Six Siege.
- Tumi is expanding its partnership with F1 team McLaren Racing to include the McLaren Shadow esports team, reports Esports Insider. The deal includes the McLaren’s Extreme E team and Tumi’s widened product range in collaboration with the sim racing team.
- League of Legends Champions Korea League (LCK), managed by Riot Games, is switching to “pre-recorded matches for the remining week following multiple cyberattacks,” states Dexerto.