Only a few years ago, the idea of thousands of people paying good money to watch somebody else play a video game would’ve raised a few eyebrows.
Audience numbers soaring
In an era when the likes of Sky PLC (LON:SKY) are seeing traditional sports viewership numbers fall, esports is one of the few ‘sports’ that is growing (and pretty quickly, too) its fan base.
In fact, analytics firm Newzoo reckons esports will generate more than £1bn in global revenue by 2020, while the audience is expected to almost double to 600mln people in the same time-frame.
Like traditional sports fans do with their football or rugby teams, people – generally the younger generations – are paying money to watch their favourite video games being played by their favourite esports teams.
Publishers aren’t naïve when it comes to the opportunities that this surging demand has created, neither is Gfinity.
The company – founded Neville Upton – has only been around for a handful of years, but in that time, it has already built up a strong reputation in the industry as the ‘go-to’ esports competition promoter and host.
Big name partners on board
Several big names have hired Gfinity to be its event partner and to look after the logistics of running a successful tournament, including none other than Microsoft.
The tech giant has partnered with Gfinity on numerous occasions, including for its Halo and Forza Racing championships.
More recently, Formula 1 has dipped its toe into the esports market as it looks to connect with a younger fan base. As you’ve probably guessed, it’s also using Gfinity to deliver the competition, which hopes to find the best virtual racer in the world.
Gfinity announced in April that it had extended its partnership with Formula 1 and Codemasters, the publisher of the official game of the FIA Formula One World Championship, as events partner for season two of the F1 esports series.
The company will manage tournament operations for the live events including the adjudication framework, which supports all competitive gameplay. It will also broadcast all the live events.
Gfinity Elite Series
It’s not just a partner though; Gfinity also has its own competition: the Elite Series.
The Elite Series kicked off last summer and the fourth season got underway in late March.
The flagship Elite Series sees gamers in professional teams compete at different games including Street Fighter V, Rocket League and FIFA 18.
There is also the Gfinity Challenger Series, which is for amateur gamers and acts like a feeder to the professional teams in the Elite Series.
The multi-season deal will run until 2020 and will give Domino’s an in-show presence throughout 80 hours of live broadcasts. The pizza company will also receive bespoke content, broadcast and digital assets, player shirt sleeve branding, social media activations, customer relationship management, ticketing and hospitality.
Facebook jumps on the bandwagon
Facebook has exclusive digital rights to stream a mix of live broadcast tournament action, including regular season games and play-offs, behind the scenes programming with team and players, weekly match highlights and special guest appearances from outside the esports world.
“Facebook is a leading global brand with over two billion people on the platform and this partnership brings to life their commitment to drive innovation and engagement in esports with their huge gaming community,” Upton said in a statement on the deal that was unveiled in March.
BT Sport and BBC Three – the online, ‘hip’ channel – have also previously signed deals to broadcast the Elite Series in London.
That can only be a good thing when Gfinity next comes to sit round the table with potential advertisers and sponsors.
Gfinity buys RealSM
Gfnity has expanded its business through the acquisition of RealSM, the company behind the fan-orientated sports media platform, RealSport.
The group agreed in March to pay around £2.4mln for RealSM, which provides sports fans with all the latest news from across the globe through its platform.
Gfinity is combining RealSport’s platform with its own premium video content and e-sports technology and said it sees scope for significant growth in RealSport’s user base across the globe.
“This deal will further help Gfinity continue to drive awareness and engagement in Gfinity and Elite Series brands,” Upton said.
First overseas licensing of Elite Series
The company has also branched out to Australia, debuting the Elite Series in the nation in June.
It marked its first overseas licensing of the series. The licence of the technology, format and brand of the Elite Series to Australia was made in conjunction with HT&E Ltd, a major Australian media group.
Gfinity plans to be in two further markets by the end of 2018.
What’s the competition like?
Rather than partnering up, you would assume that the big-name publishers would be more than capable of hosting their own events and act more as competition to Gfinity.
But that’s not quite how it pans out though, according to Upton.
“Some will probably try and say, ‘let’s do this ourselves’ but others will say ‘this is not our core skill, it is quite complicated so we want someone else to run it for us’.
“Making games is very different to running competitions and creating content. I think as we raise the bar, what you’ll find is that more and more companies will think ‘actually we shouldn’t be doing this ourselves’.”
Upton adds that there will always be some who opt to go it alone but is confident that the market is big enough for it to not really matter.
“The market is so big there are enough quality publishers out there who are looking for esports operators like ourselves to partner with.”
Gfinity has a couple of new faces on its board.
In July it appointed sports and media executive Graham Wallace to the newly created position of global chief operating officer.
Wallace has previously held senior executive positions with several sports and entertainment companies including Viacom, MTV Networks Europe, and IMG Media. He was also chief financial officer and chief operating officer at Manchester City football club where he led a business transformation programme between 2009 and 2013.
His appointment came two months after Garry Cook was named Gfnity’s new executive chairman to replace Tony Collyer.
Cook, previously a non-executive director at the firm, has an impressive CV, having headed up Nike Inc’s (NYSE:NKE) Jordan brand, before moving on to become the chief executive of Manchester City.
More recently, he has held several high-profile roles at the Ultimate Fighting Championship, a mixed martial arts series which many have likened to esports in terms of its structure and growth potential.
Revenue surges in first half
In the first half, revenues rocketed up 103% compared to a year ago to £1.8mln as the company continued to build commercial traction for its products.
The loss before tax increased to £7.7mln from £1.7mln last year but this reflected the group’s investments in the in the first two seasons of the Gfinity Elite Series, the expansion into Australia and in additional people and technology.
To support its investments, the company said in March that it planned to raise £6.7mln through an equity placing, which was approved by shareholders at the annual general meeting in April.