Nov 24, 2023

23rd November 2023 | By Nick Brown On the road to ICE, iGB will prep you for the biggest show of 2024 with this new series covering the latest developments since 2023's show. The current status of the esports market will no doubt be a key talking point at ICE 2024. We all saw esports surge during Covid, with the likes of virtuals, Belarusian football and Armenian ping pong proving to be the mainstay in live content – alongside FIFA, Dota2 and League of Legends. That initial surge two years ago has never quite recaptured its momentum and it disappeared from the mainstream, with a big dip in 2023 and, at best, a plateaued market. This year, therefore, has been all about the uppers (Rivalry), the downers (Entain and Esports Entertainment Group) and a big fight over data (Bayes and Grid). Esports: the downers ahead of ICE 2024 Let’s start with the downers. Entain has been up to plenty… and also not a lot. No stranger to flashing the cash, Entain arguably put plenty of eggs into one basket when they acquired Unikrn, the industry’s first dedicated esports operator back in 2021. Entain and Unikrn ENTAIN: EXPECTED TO HAVE BEEN THE BIG PERFOMER THIS YEAR Nothing has happened since then and, less than 12 months after the relaunch, Entain has seemingly applied the brakes to this effort. “This is to ensure that our business is structured as effectively as possible and so that we can best deliver on our strategy and growth plans,” Entain says. Conclusion: interesting indeed. There might be some excitement on the way, however. In June Entain acquired Tiidal Gaming NZ , who own esports betting developer Sportsflare, for £7.9m. Nothing has been announced since then, but they are definitely one to watch as there is no doubt some sort of plan in the works. Esports Entertainment Group Next up is Esports Entertainment Group (EEG), another who seems to have bet it all on black. In its Q1 2023 report released this week , the company posted a staggering 71.9% fall in revenue to $2.7m, which makes for dismal reading. Arguably, the company has been in trouble since May 2022, when it admitted “doubt” it could stay in business for another year. ESPORTS ENTERTAINMENT GROUP: NOT OUT OF THE WOODS YET Like any brave leader, he has given the company a radical revamp throughout 2023. Just like with EPSN BET’s launch , we think we’ll see something similar one day with an esports-style focus, offering a fully closed entertainment platform spanning betting and content. With its net loss widening despite significant cost savings , we haven’t seen anything change just yet. Igelman remains upbeat however and we might just see a 2024 rebound. Esports: the uppers ahead of ICE 2024 This super-cool brand has definitely picked up the Entain and EEG slack and surged ahead. That’s certainly the opinion of Pinnacle, who were one of the main investors in its 2023 £5.9m financing round . RIVALRY: THIS YEAR’S BIGGEST PERFORMER Catering to this audience is clearly bearing fruit – with 80% of its customer based claimed to be under 30. By engaging its millennial and Gen Z audiences with its “down with the kids” approach, its campaigns have been crammed with internet-speak, memes and sought-after influencers. This seems like a very good idea given its “unique learnings regarding betting behaviours” about Gen Z. Translated into plain English, they likely mean that Gen Z doesn’t have a lot of money to spend. Esports: the data battle Last up is the big fight going on at the back end. This one’s all about data and between the two big-name suppliers Bayes and Grid. These are the only two providers on the B2B side that offer original source data. A bit like with Genius Sports and Sportradar, but with esports. So, what’s the issue? In short, we have third-party suppliers offering operators non-official data. This is easy to offer – as esports tournaments, such as Blast, or ESL (Esports League), are open source, one can simply log on and offer data directly. The demand for third-party data is clearly there, as it’s much cheaper for tier two or tier three operators competing with very low margins. ESPORTS TOURNAMENT DATA WILL BE A DEFINING TOPIC OF 2024 But using this data is not legitimate and, in the eyes of the courts (most of the time), not legal. The legal fight continues, such as the one that’s been covered between Bayes and Panda. The market is yet to find a proper equilibrium and the ongoing fight over official data provision will no doubt continue. The big question for this year and indeed the next is actually defining esports data and who has the right to use it. Until then, expect plenty more litigation – and likely a big barrier to further market growth. 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