The NPD Group reported this week that U.S. consumer spending on video games is down 5% year-over-year in the third quarter at $12.34 billion. With my purchases of Madden NFL 23, Xenoblade Chronicles 3 and a raft of indie games like Wurdweb on Steam in recent weeks, I'm doing my part. -- Jason Wilson
FTX’s financial woes threaten biggest sponsorship deal in esports
The largest sponsorship deal in esports history could be in jeopardy as FTX is staring at the possibility of bankruptcy proceedings. California-based TSM just last year signed a 10-year, $210 million naming rights dea l for its League of Legends and Valorant teams. That deal had been negotiated directly between TSM founder Andy Dinh and now-embattled FTX founder & CEO Sam Bankman-Fried.
TSM had planned to use the funds from the FTX sponsorship to attract star players with better salaries, add teams in more esports leagues and open offices in locales like China, Europe and South America. The original deal signed last year saw FTX.US partner with TSM in relation to the U.S. market while FTX.com partnered with the team internationally.
Worry about the FTX-TSM deal comes amid news that Binance backed out of a deal to acquire FTX, which is having major financial difficulties. TSM would be far from alone in feeling such a sponsorship pinch, as FTX has major deals with the Heat (arena naming rights), MLB (including umpire patches) and the Mercedes-AMG Petronas racing team in F1.
Should FTX’s deal with TSM collapse, it would be the latest within esports. Crypto.com had signed a deal to be the global crypto partner of the Twitch Rivals esports league, but Crypto.com leadership decided earlier this year it would look to end the pact. Both companies agreed to dissolve the deal by the end of this year. --Kevin Hitt
Earnings analysis: Antitrust still a worry for Microsoft
Three of the biggest publishers in esports and gaming -- Activision Blizzard, Electronic Arts and Take-Two Interactive-- reported earnings this week, and the takeaway is that despite Microsoft’s pending attempt to acquire Activision Blizzard, the least console-focused of the big video game companies, the FTC (in the U.S.) and European Commission still have antitrust concerns.
Sports games are vital for EA and Take-Two and major contributors to their revenues. The genre is popular with console players and, consequently, console revenue has been the biggest income source for EA and Take-Two (thanks to Take-Two's acquisition of Zynga, mobile revenue became the largest revenue stream in Q3 for the first time in the publisher’s history) over the last year. But Activision has been struggling to generate revenues from the console market ever since hitting record highs during the heyday of the pandemic in 2020.
The comparison between Activision’s declining console revenue and EA and Take-Two's impressive performance exposes dynamics that Microsoft potentially considered when deciding to acquire Activision. For example, the inferior performance of Activision's console and PC revenue could be seen as an indicator of why the company is eager to complete Microsoft’s proposed acquisition, which will bring Microsoft's cash reserves, popular Xbox console and Game Pass subscription plan and extensive library of games. Under Microsoft's infrastructure, it would be easier for Activision to revive its own console and PC revenue streams.
If Activision’s acquisition is approved and completed, it sets a precedent and could tempt corporations in the same field, such as Sony, Netflix or Amazon, to bid for EA and Take-Two. --Tobias Seck
League of Legends grand finals viewership up 13.5% year-over-year
Last weekend’s League of Legends Worlds Championship saw solid growth on YouTube and Twitch over the 2021, despite intense time zone struggles.
During group and play-in stages of the tournament, Worlds saw some of its worst numbers in years due to North American time zones. The latrer rounds proved to be a rebound phase. The grand finals between T1 and DRX, a marathon that went over six hours, notched a 13.5% increase over the 2021 grand finals.
In terms of total hours watched, 2022 notched 23.2 million viewer hours. 2021’s grand finals between DWG KIA and Edward Gaming saw around 13 million viewer hours. Both series were best-of-five competitions that went to five games, so they’re easier to compare when it comes to viewership than a 3-0 sweep vs. a gritty 3-2 win.
According to numbers gathered by Esports Charts, 141 million hours were watched across the entire tournament, down 18% from 2021’s 171 million hours. --Hunter Cooke
Speed reads
- Sources tell SBJ that The International, the annual championship for Dota 2 and the esports event with the biggest prize pool, will return to Seattle in 2023.
- Knights Arena of Pittsburgh’s Knights Gaming will organize events and tournaments in 2023 for Valorant Challengers and Game Changers in North America.
- Dude Perfect player skins and apparel and Hugo Boss apparel are coming to PGA Tour 2K23 in November along with the Top of the Rock course in Ridgedale, Mo.
- Complexity, which has ties to the Cowboys, is now a partnered team in the Halo Championship Series.
- Swarovski has made the trophy for the Fortnite Championship Series.
- 100 Thieves signed popular Valorant and Apex Legends content creator “iiTzTimmy,” who averaged just over 10,000 viewers per Twitch stream over the past calendar year.
- Sports Illustrated has a partnership with video game publication GLHF, creating the brand’s first video game vertical.
- Microsoft’s hit shooter franchise Gears of War, whose small esports scene sunset this year, is getting a Netflix series adaptation,notes The Hollywood Reporter.
- Riot Games has reorganized League of Legends tier-two leagues in North America.