Identifying new business opportunities in the esports ecosystem

so it's an honor to come back your pocket gamer so this is uh my third presentation of Pocket Gamer and I cover basically all the West Coast first time in Vancouver a second time in SF and I'm glad to be in Seattle today and so lots change in eSports since I got into in early 2016 and you know right now obviously it's very exciting time for eSports your great presentations and great talks from chopper and Chris and you know aside from you know seeing that the likes of riot and Blizzard grow their eSports business there's also a lot of new business that are popping up and each year there's always new things and you know if you don't follow esports and you know every other week you're just seeing absurd I guess if you click on the slide yeah so every other week you're seeing

you know new businesses new news new opportunities new games that are popping up and so it you know from outsider's perspective oftentimes I get asked ok so what's happening these was where the opportunities and right now it's a very hard time for eSports obviously we're getting to the point now we're getting mainstream media coverage we're getting non-endemic investors that are it really into you know this hype that's building up for eSports you know people see over watching ESPN and I'm wondering okay is this a next big thing so no the talk that I want to talk about today is with all these opportunities if I was to start a new business or to acquire a business in eSports where would I start looking well whatever where the opportunities and let's be realistic here we would all don't have a couple hundred million dollars to start the next League of Legends so we're talking about realistic business opportunities and what's what are some of the ways in which we can go about to identify some of these opportunities so you know I'm not sure how familiar of the audience here today is with eSports so this is a

challenge I always have but either someone is learning about eSports from scratch and you can talk about you know how big the market is no I'm gonna go straight into you're talking about the opportunities and I'm gonna reference a lot of things that you guys can google and find online as well so you know if I go a little bit too quickly and skip through a couple slides there please apologizing in advance so did you start with if I was to enter eSports um you know from day one I have to understand a landscape I have to know exactly what kind of companies are in eSports and and basically have a good overview of the ecosystem so you can find us online I've referenced some the some of the third-party slides that I put up here so this is done by Conway ventures so and keep in mind that this is an overview based on how they interpret eSports you know just hearing the problem chopper talking about some of the opportunities and some of the things that you know are missing such as you know advertising

companies specific to eSports you know you'll find that they're not they don't really belong in any category here so you know just you know keep in mind this is really just a high overview and how I would interpret looking at you know this kind of overview map is thinking about where do I come in you know what are some of the underserved opportunities for one and what are my competencies of within within this landscape so sticking with the macro you know one of the other things I like to look at is really trying to think about you know what are some of the upcoming opportunities right and what can I do to what I call ride the wave so two examples our site here is on the under streaming side of the business so I don't know how if you guys are familiar with two businesses that recently got listed whoo yeah and do--you so they're basically the twitch of China and honestly they have twitch to thank for the business because you know years ago they were struggling with funding obviously back then LOB's live

streaming wasn't making as much money as it is now so what happened was twitch got bought up by Amazon for 1 billion dollars so that made it very easy for them to have that story to tell that a look twitch has just been valued at 1 billion I think for the China market we can be very that you know at a percentage of that right and so that gave them the funding to continue on their operation and now both companies are listed and you look at eSports teams as well I mean for the longest time they were having a lot of problems just to find a value but on eSports caught on TSM raised 25 mil cloud9 raised 50 mil and so all these other tier 1 and tier 2 teams have a much easier time to raise money for themselves because all you need to do is point at a direction and say hey look this guy is getting as much money so you know as a business you know I want to be able to identify with Resnick's wave when you're where is that you know if I'm not gonna be the leader of that way from how can I catch that wave and you guys just sharing something that's I'm very on macro and I'm gonna share these very objectively here these aren't my bullet points this is actually

taken from a white paper from eSports research in new zoo and eSports conference call a sports bar so they and this white paper identified 5 trends to watch in 2019 so I remember that my previous two presentations I gave I gave my own predictions of where eSports is going and I can tell you that my predictions have been off so I'm not gonna give my predictions these are the predictions from new zoo and East Coast borer so you know just kind of quickly going through them they talked about a trend from online to offline so I personally believe in this and the platform that I'm building out for pique actually concentrates on you know this opportunity from you know of growing that presence offline they talked about opportunity with um you know eSports and traditional eSports adopting each other's strategies they talk about influencers you're being more involved outside of eSports and becoming broadcasters even for traditional sports changing competition into entertainment you know new eSports formats being on

the rise and the battle for branding and advertising so you know these are some of the opportunities that they pointed out but again these are kind of very underserved person how do you interpret is so jumping into you know kind of my you know the the juicy part of the presentation is you know personally I went for this experience you know when I found the peak and you know basically I went to the drawing board and I sat down and disgusted at emia what are some of the opportunities that we can tackle them eSports so you know these are some of the ways in which I approached them identifying the business opportunity that I wanted to tackle and just you know applies across all sectors and you know it even applies outside of eSports so you know I hope that as you guys look at the points that I'll be making you know you guys kind of you know switch on your brains and think about okay what are some of the things that I can take away from from these bullet points as well so the first opportunity that I want to talk about is you just basically

thinking about X for eSports and this is in a very easy way to approach your bringing about a new business opportunity so some of the examples I've cited here you know ESP eSports pool basically is fantasy about betting for eSports you have a gamer sensei taking the model for one-on-one training but for eSports and panas core which is a company that it concentrates on providing data and statistics for eSports tournaments so basically what you want to think about is and what are some other technologies platforms and services that worked well in other industries that can be applied for eSports so the pros for this is it's very easy concept to explain right you go to an investor you go to you know your management or whatnot and tell them that I want to build it X for eSports and there's potential to leverage off existing technologies that you might already have in building this new product the cons I've listed here the business models often simplified and are you trying to fit a square peg into a round hole or maybe whatever you want to

build for eSports there's really just no market no need for it second opportunity I want to talk about is filling the holes in the ecosystem and so as I was you know what I'm watching Christmas presentation I think you know gen vid fits here you know the the slide that Chris had about filling that hole it's exactly the point that I want to make here yeah identify current and upcoming needs an ecosystem at the top a new solution to follow to fill that need so examples I've cited here yes be gaming you know you'll be hearing from David a little bit later in the panel no you know you have your great games and you have viewers but the East was very experienced for the longest time have been you know very subpar if you go back to youtube and watch eSports tournaments alone you know five six seven years ago you know it looks like it was it's heavily dated the production value is me and so I think you know companies like ESP have stepped up the game and they said that you know we're great at making

good high-level production you know we've done the World Series of Poker you know let's take that experience and bring it to eSports and would slow de da de da GG so know nowadays we all hear about how much influencers like ninja I'm making so mega bucks are being spent on eSports and you know how haha the influence is literally overnight started to come and so much money I know it's really for the help of agencies because agencies have helped them communicate the value that they bring they have proper management that brings the opportunities and deals to them so your prior to you know that professional agencies like loaded GG there was that hole to fill in which if I was at brand if I was a game how do I communicate with his influence just to get the best value so I and finding that business to meet a few fill that hole and meet that need but there are some cons of course we're taking this approach you know you do need to require a deep understanding about the esports ecosystem right you

can't just go in and say that I'm gonna feel whole again if there is no need for that opportunity I'd like to talk about is the instruction of new technologies so I would say this is the riskier one but it's also the more sexy one right applying layers of emerging technologies and into eSports so examples here blockchain and you know right now I'm actually really interested to hear about blockchain gaming obviously that's you know year after year has been evolving so quickly but blocking eSports you know there's a lot of platforms that are making use of blockchain for you know gambling platforms for payouts for skins with dream team being one of them and emerging technologies like ARV are so hot oh is a Japanese they are a sports league that you know you probably seen the videos on YouTube it looks a lot you know really amazing really cool I've actually not looked too much into this but again applying that new layer of

technology to create a new demand but the kind of this are obviously it's a you know high risk being that first mover to the market and usually because it's a new technology requires you know quite a bit of time and investment opportunity I like to talk about is you're basically creating a new demand so you know once you're able to understand the audience and understand the need of the market you know create a unique product or service into the ecosystem that has potential for high adoption so you know when I was first um you know gave this talk in 2016 there was no such thing as battle royale you know there was h1z1 yes there was somewhat of a genre that was you know up-and-coming but you know that's how fast eSports has grown there's literally a new gaming genre that has yes swept nation you know gotten the attention of you know parents and kids are like

and I mean if you really have that vision to create something new you know build a new new gaming genre I'm making into eSports and peripherals right you know this is something that before gaming streaming and eSports became a big thing you know you wouldn't think about having gaming chairs you wouldn't think about these kind of cool peripherals that Razer would come up with but because they had that vision of okay we want to build a brand for gamers you know they they you know took something like had headsets keyboards you know something that's been around for 30 40 years years and made it into something that that seemed new and that targeted a new segment of gamers and final opportunity I want to talk about is you know and this is a very simple one improving on existing products identifying successful products and services in the market that has areas for a significant improvement and offer and competitive product with that improvement so interesting thing is as I

was looking for examples of this there actually weren't too many on eSports the one example at a site here again going to the battle royale John Rosso h1z1 was improve cat ibly the first to make battle royale into into a thing but there were a lot of problems with it the main thing being the game balancing at the balancing just seemed off it wasn't meant to be eSports ready so yeah no player unknown who was the guy behind the battle royale for h1z1 you know basically to them you know took on that problem but then made a new game which is pop G pop G is you know great it's still doing well but over time people you know start complaining about a lot of things that pop G as well and main thing being the game pace a lot of players would spend you know all the time you're looking for weapons campaign and you make all that effort all of a sudden you get a head shot at you die right so an apex legend

came along and I think you know the one that well it is the EA team but specifically you know the apex legend team look at a better world Jonna and thought about how can I make this game more fun more fast-paced and make it more rewarding for players so that it doesn't feel like I want to strangle myself every time I get shot right so the cons of this approach is that the product improvement has to be quite significant for people to adopt this new product so I come from the mobile gaming space before jumping into eSports and you know oftentimes hear people looking at a successful game like clash royale and say that oh I can't make clash Royale but better but how many games have actually come along and I've been better than clash Royale so a lot of times a lot of people tend to simplify the process of trying to make a product better and sometimes people also forget about that existing products especially nowadays in gaming it's very easy for the existing players to play catch-up as

well so a perfect example being epic and fortnight the game has don't continue to evolve and epic has spent a lot of effort into its LiveOps to update its content and to make sure that the game feels fresh so yeah you know you can spend all this time making a competing product like apex has but when the existing product has the power and has the ability to understand its audience like like epic does you know it's sometimes very difficult for you to come in and you offer a point what you would call a better product and on this no actually I want to share a case study which has nothing to do of eSports but it's a good example of as an entrepreneur and as someone that's trying to build a new product and you know what are you know some of the ways and some of the things that I look for to to try to execute this product and try to actually just companies so to give it a best chance to succeed so know the company that I've looked at is actually zoom so zoom is not the sexiest

company it's recently listed it's a video conference company and I'm sure you guys have you'll come across that you know beacon conference calls and whatnot and so they recently got listed on 15 a stack of New York Stock Exchange so there was a very good article written by Forbes talking about how zoom entered a very non sexy industry everyone thought was mature and it was very difficult for a new company to just kind of go in there and try to try to compete in but when you break it down and try to understand why they succeeded I should a lot of these things are applicable to you and anyone that's trying to start a new company and especially I feel like in eSports as well so zoom they've identified a pain point and so for videoconferencing basically the solutions were dated right and I'm assured sure that there's a lot of technology in eSports but were you know people just accept it as what it is right now but it's actually dated and then fire that new technology so again

going back to here and one of the opportunities I talked about earlier as technologies evolved there's always gonna be new opportunities that pop up so for a zoom there was um you know video conferencing on cloud there are industry experts so this is something I always look for in a founding team whether it's me building a team from scratch or I'm investing in a team you know I want these guys to know the industry inside out you know these aren't guys that are coming from you know doing crypto and I'm saying that I wouldn't go into eSports right nothing against crypto guys but but but yeah you'd probably hear a guy like trapper talk about his experience in eSports and you know this guy knows eSports inside out for galleries so I think this is something that there's something that eSports also lacks a lot of people in eSports tend to be young guys so once they've raised the ground they go crazy and they go partying you know I've been part of a lot of startups that I have that kind of culture as well but yet zoom practice figure out for Galilee their founder rarely traveled you know that he didn't take expensive trips across the world you know he

concentrated on building a good product with his team Lenya partnerships focused on product and building features that are meant for the user and I think this is something that you know I've seen a lot of you know eSports startups talking about how they are going to build this awesome feature and the question I was asked myself is what is this gonna do for the user and again going back to I'm your gen bit being a good example you know they have the viewer in mind Rito how it is our product gonna make the viewing experience significantly better and more engaging for the viewer and so no it's just taking a quote from zoom there they didn't reinvent the wheel and they just a lot less painful to turn and so what we're seeing is I would say the closest equivalent to this story would probably beat this court they're not he specifically built for eSports company but obviously they have a big presence in the eSports and gaming and I recently just on LinkedIn from you know one of the senior guys there that they've hit

their fourth year anniversary and they have now 250 million registered users and so I think you know a lot of the bullet points that listed here you know would probably apply to them as well and so you know this presentation was meant to be a kind of very high level objective overview it wasn't meant to you know sell you guys on where a certain direction or certain of business ideas and eSports might take off over others but I hope it you know this kind of gets everyone thinking about what are some of the potential opportunities and as technology evolves as the eSports scene involves as more and more money and more and more resources get poured in and most importantly as more as an audience for eSports grows I definitely hope that you know there's going to be more business opportunities and more success stories coming out for eSports [Applause]