How Lessons From Esports Past Drives Esports Future with CEO Aaron Fletcher


This audience. So Eric go through the companies you found it quite a few there are plenty of starts across this industry. What advice can you give to some one of the first steps of fouling their own Esports or gaming company that you wish you do when you were starting out darn raised before you have Mom don't do anything until you have markets it it's it's that's it. That's purely it. I guess there's two things and don't be a dick but the the biggest one is definitely until you have some formal Market 5th and you can find out if you go to market fit pretty quickly just talk to people ask questions find the right people finding users find those things find out how much they willing to pay find out if they're willing to basically walk or use your product find out all these sort of things and grow that first before you start thinking. Oh, this is amazing. This is going to work cuz I think there's there's and and then I guess the other one actually is learned from birth. Past experiences and a lot of people don't do that, especially with a t Sports because the history have a have a chat to someone like either myself or have a chat like don't talk to someone who's a consultant that's been in the year in in the game two years talked to someone who's being in the industry for twenty years because they will tell you a lot more valuable information than someone who's been in there for two years and only knows about the currency because the current scene it's all about raising this big money about raising this big capital and you don't get the history of like the companies like the raised a hundred million dollars and went broke over six months. You don't have seats need a CDL or CTS. I think it is that raised a hundred million dollars as well and we're broke after a year-and-a-half. You don't have all of these kind of things and we're play verse was as an example before they became what they raised what they are now off and that that you kind of could find on the internet even though I know the history there and there's a lot of other companies like that that you'll that you you only get from the perspective of people that have actually been in the industry because people have a game Get it either scrubbing the internet or it's just hard to find anything that isn't relevant now absolutely agree. It's the same advice. I give to student journalists. I talked to quite a few classes about hey, what could you do any sports journalist? What if we want to get involved in this space? And the first thing I tell them is get to know the history of the space get to know everything that happened with Major League Gaming from 2002 to 2010. That's where the start get to the creedy sports Association how this developed in Asia and that will guide your accurate reporting on this space if you understand what happened long before you probably got involved in it that was the case for me cuz we got a school, you know, I was in the 2015 2016 range was like, oh massive Madison Square Garden League of Legends. This is crazy thing off you go back in time and you're like, okay, let's look at the Madden tour bus as like an example of where it's these things that happen is sports over the time that I think are really crucial job. Like understand how we got to the place where at today and then helped give you those guiding lessons to make sure that the same mistakes aren't made. Well MLG an ESL at two really good examples of understanding their Acquisitions why they happened what happened with the issues they ran into especially MLG with God Frank cuz they had a whole pile of litigation issues with God frag when they did their acquisition why they got acquired by Activision and wage. It's it's an interesting story. That's probably better for another time. But in terms of those sort of things and that history that was kind of built there is actually really important because getting a quiet is a skilled gaming platform different platform broadcasting platform any of those by a publisher is a huge problem from both illegal Nightmare and a whole pile of other things because the skilled gamer is 18 plus as well as the tournament system requires 18 plus or Parental Guidance cetera, et cetera. So it becomes a Minefield on those sort of things and then you've got ESL same thing going through their acquisition and the different times they are now with mods. This group and and the difference in the kind of the company structure cuz everyone says he s l and they see these companies and they're like, they must be making it a billion dollars and I'm like, yeah doesn't look like that. It may seem like that from the outside cuz they're doing these large events and they're doing these things. But in terms of the revenue is not driven as much as you kind of think from that. It's really driven through the Publishers. Yeah, if you're done if you're not the publisher gave and you work a t sport chances are the money is not flowing your exactly there's only a few Outlets the kind of work and I've been in basically every single facet of that because I used to run events with the young. I used to run a lot of those sort of things with them for a long time. Actually u c l e s w c w c g a lot of the events around those and running those Live Events is is great. But it's like a break even marketing cost. It's not a it's it's what you'll use to fuel income elsewhere. Not what you're used to make money lost leader marketing basically at this point. Yeah, exactly. That's it's a funny industry to be it especially as we look at where these Sports organizations are going. This is totally off topic. By the way. Just the I had em for this wasn't for a podcast but I talked to Jason Lake in Andy Miller Jason Lake complexity CEO Andy Miller NRG CEO for audience. I do you do that. They were basically talking about hey, we're going to make Revenue eventually with our religious the Publishers of Olives. That's that's what we're counting on to make money in the mean time. We're going to keep building our brand up in whatever way we can we're to keep trying to capture feds. But really we just need to log get to a point where Publishers need us to enter the game because that will bring fans that will bring the marketing there looking for and then the Publishers have to reward us for doing so and that's kind of just walk the biggest eastwards organizations in the world see this space right now and that's it tells a lot. I think it will you actually have a look at most of these Sports organizations or actually converting from competitive Play De comme Recreation almost all right, converting over to that for Revenue basis cuz I've talked to a lot of these guys you have come like you've got Team Liquid as an example of trying to push in the text side of things cuz we've talked to him a few times about what they're doing for Thursday. We also consulted with the guild who raised with David Beckham, or they paid David Beckham to re it was it was a debacle. It was a drastic they they they are doing a good job. I think they really heavily like ninety percent of the money that they raised is purely attack. It's not to do to build out the team and build out anything on that account on the arm competitive site is secured purely build out both the content side as well as a Tech play on them because of the end of the day all this content and everything that they're creating in these fans and these users they need to figure out a way to monetize them and monetizing them generally comes through like merchandise. It comes through tourneys to come home a brand deals. And unfortunately, if you're the best game in the world, it doesn't mean you have a massive following you may not be entertaining to watch. So therefore content creation becomes king for this and which dog And fuels Brands which in turn fuels everything else and like I just talking to so as as Consulting with IDC, I think like probably a couple of weeks ago. I was I was talking to them cuz they're doing metro sports at the moment and it was a pretty interesting conversation cuz they're one of the first companies that isn't Yuzu that isn't that they're doing it. They're doing Esports Revenue a very different way. So Esports Revenue right now is off late. It is how much so it's like one point two billion or something. It's basically nothing compared to the publisher revenues like a hundred and sixty billion. So and that's where most of the revenue from E Sports is actually going. So what they're doing is they're doing a bottom-up kind of approach and looking at all of these other things that are kind of skewing it. So right now Esports revenue is calculated with just brands that are paying for events and advertising and all the way around that around which basically whereas they're looking at it from the other side of things and they're like, look, there's all this gambling Revenue that's also generated on top of Like betting on these matches and all this this looking that's that's showing any sports revenue and you've got companies like skills that their revenue alone for skills is bigger than the revenue of every single e sports team exists in the world in his voice. That's

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