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04/06/23: Fortnite reinvigorates the metaverse; CLG faces layoffs and uncertainty; EA leads console publishers

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Medias First Morning Read
Thursday April 6, 2023

Good morning! It’s Thursday and this is your early morning Esports and gaming brief.
Creatives are starting to tap into the true power of the Unreal Editor for Fortnite, and the maps, gameplay and other creations have inspired industry experts to reexamine the potential of the metaverse.

Epic Games released a public beta for the Unreal Editor tool alongside a Game Developers Conference announcement of its Creator Economy 2.0 initiative, which provides incentives for island creators who see high engagement with their created content. The mix of additional ways to develop in-game and monetization of content has led to a waterfall of new content built on the Unreal Editor for Fortnite, from recreations of portions of AAA game titles to full game ecosystems in unexpected genres like horror titles with user-generated monsters, environments and more.

Between Fortnite’s sandbox and that of similar games like Roblox, the strongest potential for metaverse adoption now clearly lies in two mainstream game platforms that already exist. While wholly original IP could come out of experiments in these titles, any conversation about the metaverse that doesn’t reference the potential of these tools is an incomplete one.

COMPETITION AND GAMING NEWS

Asus is creating a competitor to Valve’s Steam Deck known as the ROG Ally, the company announced. The company’s first handheld gaming console will reportedly outperform the Steam Deck, Valve’s handheld PC gaming system, with access to a 1080p resolution and 120Hz display performance. The system does not yet have a release date or price tag, but a pre-order signup is available on Best Buy.

E3 has officially been canceled following a lack of interest from publishers and developers. Once one of the biggest events in gaming, E3’s fall from favor points to multiple industry trends, particularly that of game companies claiming control of their own narratives. Digital showcases allow companies like Nintendo, Sony and Microsoft to self-publish their biggest updates and give their game centerstage without having to compete with rival publishers. To that point, E3 “simply did not garner the sustained interest necessary to execute it in a way that would showcase the size, strength, and impact of our industry,” according to an internal email received by IGN.

Counter-Strike players are purchasing more cosmetics than ever as the upcoming release of Counter-Strike 2 continues to spark interest and drive longtime fans and newcomers to the current release, Counter-Strike: Global Offensive. Cosmetic items will transfer between the games, and between the beta for CS2 and 2023 marking some of the highest-ever playercounts for the title, there are plenty of buyers and sellers on the market for Counter-Strike’s “cases,” and CS:GO publisher Valve gets a cut of the case sales made on its platform. According to CS:GO Case Tracker, nearly 40 million cases were opened in March 2023. February 2023, for context, drew nearly 28 million opens.

Pokémon GO’s latest microtransaction change has sparked ire among its player base and might lead to an exodus of players from the 2016 mobile hit. The controversy surrounds developer Niantic’s decision to raise the price of and lower the frequency with which players can use “Remote Raid Passes,” which were created and gained popularity during the COVID-19 pandemic. Players in less populated areas as well as those with medical conditions that make playing augmented reality games more difficult to play have since latched onto the remote passes as a way to interact with a community they might otherwise not be able to reach, and the majority of Pokémon GO players use remote passes to take part in raid content overall as well. Players have planned a boycott that will take place today to encourage Niantic to reverse the price change for remote passes, though Niantic’s vision of the game being used to get players out and about in their communities conflicts with the idea of remote participation.

STREAMHATCHET
MONTH IN REVIEW – SONS OF THE FOREST

The horror survival game released in early access on the 23rd of February 2023 and in a month since its release has generated over 39 million hours watched across Twitch, Youtube Gaming and Facebook Gaming.

133K unique channels have live streamed the game during that time period, and the game hit a peak viewership of 909K during the first two days. It also hit #2 by hours watched on the live streaming charts on its second day of release with 7.45M hours watched. It was behind only the Just Chatting Twitch category, making it the most-watched game in live streaming that day.

Read more about Sons of the Forest on our Blog

SPONSORSHIP & ACTIVATION

BLAST has brought in a trio of alcohol brands to sponsor its premier Counter-Strike: Global Offensive event, the BLAST.tv Paris Major. Absolut Vodka, Ballentine’s Scotch and Jameson, all owned by parent company Pernod Ricard Group, will take part in both digital and onsite activations at the Paris Major, which begins this weekend.

Brazilian esports organization FURIA is partnering with virtual racing peripheral company VRS to bring the VRS logo to FURIA cars in racing sim competitions. FURIA will also use VRS hardware when competing. FURIA fields a RENNSPORT virtual racing team in ESL R1, which will be the focus of the VRS partnership.

Talon Esports continues to reel in sponsors, and its most-recent partnership has brought it into the gambling space. Talon will work with 1xBet, an online sports betting company with a controversial history in the sports and competitive gaming spaces. Despite its past reputation, 1xBet continues to be a major player in global sponsorship for teams in both spaces. This deal will give 1xBet another avenue into Dota 2, which has been a focus for the company and is one of Talon’s best-performing teams.

Riot Games’ Europe, Middle East and Africa Masters circuit has broken off another deal with KitKat, which will return as a partner for the League of Legends event in the Spring and Summer seasons. EMEA Masters, a feeder program for the League EMEA Championship, will enter Year 3 of its partnership with KitKat, which has also partnered with the LEC and several other regional leagues.

2023 Esports & Gaming Business Summit

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In a recent study conducted by YouGov, 48% of esports followers prefer brands that engage with their fans online (i.e. social networks, apps, sites, emails etc.). At Esports & Gaming Business Summit, hear from streaming services, game publishers, brands and more on building brand relationships and activating the Gen-Z audience.

LEARN MORE

YOUGOV LIVING DATA INSIGHTS
Which car brands have American esports fans all revved up?

American esports followers are over three times as likely as the national population to rate Rivian positively (61% vs 17%). Suzuki Cars (69% vs 31%), Genesis (67% vs 33%), Lincoln (81% vs 50%) and Daihatsu (54% vs 17%) have also won a remarkably higher share of positive ratings from esports followers.

TEAMS

Counter Logic Gaming is the latest victim of a contracting esports market, with multiple reports confirming the company is pursuing layoffs and looking to either sell the brand or cease operations. CLG, one of the best-known brands in North American esports, is owned by sports holding company Madison Square Garden Sports Corp., the owner of the New York Knicks and New York Rangers. Esports content creator Travis Gafford first reported the news and said NRG Esports, another North American organization, is considering purchasing CLG’s spot in the League of Legends Championship Series.

TSM, a fellow legacy org in the LCS, might also be in trouble, though not to the level of CLG. According to the Sports Business Journal, TSM plans to trim its esports offerings and also might put its LCS spot up for sale. TSM CEO Andy Dinh responded to the report on Twitter by saying the organization is “committed to esports” and still plans to enter Counter-Strike in 2023, “which is a larger investment than all of the games we’ve left combined,” Dinh said. “TSM is always evaluating what esports ecosystems are best to invest in and will continue to enter and exit games.”

FaZe Clan reported a $53.2 million net loss in 2022, according to the company’s end-of-Q4 report. The esports organization’s woes on the public market are well-recorded at this point, and despite a 32% increase in revenue year-over-year, FaZe, like most esports organizations, remains unprofitable because of ramping costs. The company’s stock remains under $0.50 on the Nasdaq, and the company is at risk of being delisted if it’s unable to close 10 consecutive business days at over $1 per share prior to October.

In a final bit of dreary news, Astralis is also considering going private as the company’s Board of Directors conducts a strategic review of the business. Astralis, a Danish organization known globally for its success in Counter-Strike: Global Offensive, is considering delisting from public markets, according to a report from Dust2.us, alongside other solutions such as “a combination with another company, issuance of new shares, a sale of all or some of the company’s shares and/or assets, or a combination of some or all four options.”

INDUSTRY

Game platform Roblox will hide advertising units for players under 13 following an adjustment to its advertising standards. The onus for compliance is ultimately on developers and studios who create on Roblox, with the company including its new guidelines as associated language for the terms of use and community standards rules it enforces for all Roblox creations. Ad unit changes also include restricting the use of cryptocurrency or NFT advertisements, credit or financial service ads, multi-level marketing company promotions and charity donation advertising.

Activision-Blizzard has settled a lawsuit with the U.S. government following the Department of Justice’s claim that its attempts to institute a salary cap for the Overwatch League and Call of Duty League violated antitrust laws. Activision-Blizzard did not admit wrongdoing in its statement on the civil lawsuit, which was both issued and settled Monday. “We have always believed, and still believe, that the Competitive Balance Tax was lawful, and it did not have an adverse impact on player salaries,” the company said in a statement. “The tax was never levied, and the leagues voluntarily dropped it from our rules in 2021. We remain committed to a player ecosystem with fair pay and healthcare and continue to have the least restrictive player mobility compensation system across all of the major sports leagues.”

Street Fighter is next in line to hit the big screen following a string of successful TV and movie adaptations of games. From Riot Games’ Arcane to 2023 phenomenon The Last of Us, not to mention recent releases The Super Mario Bros. Movie and Dungeons and Dragons: Honor Among Thieves, game reprisals are a hot part of the entertainment industry right now. Street Fighter’s feature will be a live-action film, according to IGN.

EA is the most-popular game publisher on PlayStation and Xbox, according to a report by Ampere Analysis provided to GamesIndustry.biz. Behind popular titles like FIFA, Madden and Apex Legends, the company generates 16% of monthly active users across both console platforms, according to Ampere, and EA also held the title of most MAUs throughout the September 2022 to February 2023 study. Activision-Blizzard nearly surpassed EA following Call of Duty: Modern Warfare II’s release in late October 2022, but sports sims, coupled with “EA’s extensive catalog,” according to Ampere, kept it significantly ahead of the competition for MAUs, that outlier notwithstanding.

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TRIVIA
To cap off March Madness, the LSU Tigers won their first women’s basketball championship, and the UConn Huskies won their first title in men’s hoops since ____. (Email [email protected] with your answer, and be sure to include your name, company and city).

Answer to Our Last Trivia Question
Name the women’s basketball star whose standout 41-point performance against Louisville helped Iowa reach its second-ever Final Four. Answer: Caitlin Clark. Kudos: JT Ward | Spark Foundry, Chicago; Jim Himmel | TCB Media, San Clemente, California; Creed Heilskov | ImOn Communications, Cedar Rapids, Iowa; Andy Pittman | Baylor University, Waco, Texas; Matt Deprey | C-SPAN, Washington, D.C.; Tom Moore | Kalt Productions, Los Angeles; Dory Petsrillo | CoxReps, Dallas, Texas; Travis Wacker | ESPN Chicago/Good Karma Brands, Chicago; David Westberg | SAG•AFTRA Federal Credit Union, Burbank, California

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