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05/11/23: Microsoft sidesteps console wars; Fortnite joins Olympic Esports Series; FIFA 23 sales soar

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Medias First Morning Read
Thursday May 11, 2023

Good morning! It’s Thursday and this is your early morning Esports and Gaming brief.
Microsoft Head of Gaming Phil Spencer made waves last week in addressing Xbox’s third-place spot in the console market, the failure of the publisher’s latest original IP and the challenges in shifting consumer perceptions after the decades-long “console wars.”

In an appearance on the Kinda Funny Games XCast, Spencer, who has been at the helm for Xbox for nearly a decade, said the Xbox Series S and Series X are likely going to finish this console generation’s sales race in third place behind the Nintendo Switch and Sony’s PlayStation 5. That said, Microsoft isn’t interested in “out-consoling” the competition, Spencer said, as the company is focused on cloud gaming and subscription services such as its Game Pass offering as differentiators in the market.

For those to shine, though, the Xbox needs great first-party IP – and recent release Redfall, one of the few exclusive next-gen Xbox releases alongside Halo Infinite, has been nearly universally panned by critics and the general audience. Spencer is right in saying users’ platforms of choice are pretty firmly established after two decades of back-and-forth between console industry titans. However, while it’s difficult to get a person to shift from one console to another because of high-quality IP, it’s not as difficult to see established fans shifting their preferences due to a lack of faith in the company’s ability to create exclusive content that makes owning a specific console worthwhile.

Microsoft’s efforts to bring in high-caliber studios like Bethesda Softworks and Activision-Blizzard were supposed to help shore up some of its IP concerns. But after the slipup with Redfall, delays to the much-anticipated Starfield and major roadblocks to Microsoft’s purchase of ATVI, the company’s game software business is looking shaky, regardless of Xbox’s competitive deficit in the hardware department.

COMPETITION AND GAMING NEWS

Dota 2’s world championship, The International, will return to Seattle this year. Seattle was home to The International from 2014-17, and the tournament’s first stop in the city coincided with the meteoric rise of its prize pool due to developer Valve’s innovative in-game cosmetic crowdfunding initiative for The International. The event will take place from Oct. 14-29 at Climate Pledge Arena.

Fortnite will be featured in the Olympic Esports Series, though probably not in a way people who play the game expect. The battle royale title will turn into a digital version of shooting sports, with 12 pros from the Fortnite Champion Series competing during Olympic Esports Week from June 22-25 at the Suntec Centre in Singapore. “A specially designed Fortnite Creative Island made to reflect sport shooting competition will put the target aiming accuracy of sharp shooters to the test, navigating the specially-designed, in-game environment as they compete to become an Olympic Esports Series winner,” the Olympic Esports Series said in a statement. A total of 10 games are now represented in the competition.

Danish esports organization Copenhagen Flames has filed for bankruptcy, CEO Steffen Thomsen announced. The Flames, which were established in 2016 and had a surprising rise to the top of the Counter-Strike: Global Offensive scene in recent years, saw sponsorship dollars fizzle as many organizations have in a retracting esports market. “It is no secret that esport clubs have been and are struggling financially, and especially the past 6-9 months have been absolutely horrendous for us in terms of securing partnerships of any kind,” Thomsen said in an emotionally charged statement. “We wanted to build a sound business. A club which didn’t rely on anyone else’s money. It has always been our most important goal and our mission. We succeeded to some extent when we delivered our first positive annual financial result in 2021, but unfortunately it did not last.”

Sales of FIFA 23 eclipsed the lifetime sales of FIFA 22 in just six months, developer Electronic Arts announced during its earnings call Tuesday. The news was one of multiple highlights for the game publisher, which also revealed Apex Legends’ peak active users rose 20% between Seasons 15 and 16 of the game and a total of $7.4 billion in revenue for the 12 months ending March 31, 2023. EA will hope to build on that soccer-based success despite a massive upcoming shift in the IP. With its partnership with FIFA coming to an end, EA is banking on the first edition of EA SPORTS FC, which releases in July, to take up the mantle as EA’s biggest money-maker.

SPONSORSHIP & ACTIVATION

Gaming peripherals brand HyperX will retain naming rights for Las Vegas’ HyperX Arena through an extension of HyperX’s partnership with venue operator Allied Esports. The HyperX Arena, located at the Luxor Hotel & Casino, serves as a local hub for esports, with tournaments, activations and other events centered \at one of the Las Vegas Strip’s most distinctly designed properties. HyperX parent company HP will also continue to provide hardware for the venue.

PlayStation has announced the India Hero Project, an initiative targeted at supporting game development in India. The project will focus on independent game makers in the country and provide resources, including a minimum of $100,000 in funding and support from PlayStation Studios, to publish their titles. The incubator program began accepting applications in April 2023, according to the India Hero Project website, and is open to companies of any size that are based out of India.

Betting platform Rivalry has signed five Brazilian Counter-Strike content creators as it continues to expand its footprint in the region. The new additions are part of Tribo, a Counter-Strike: Global Offensive content creator group that boasts 2.7 million followers across social media and streaming platforms, according to a statement. Rivalry will facilitate multiple campaigns alongside the Tribo influencers to “engage the Brazilian CS:GO community,” the company said, including an activation during the ongoing BLAST.tv Paris Major.

G2 Esports’ partnership with CS:GO cosmetic gambling site CSGORoll inspired controversy last week due to the nature of the partner and G2’s choice for the face of its announcement: Counter-Strike pro Ilya “M0nESY” Osipov, who just recently turned 18 years old. CSGORoll is an unregulated site where players can buy, sell and trade in-game skins for weapons. Counter-Strike has a messy history with gambling, with multiple similar websites being shut down in past years and ongoing regulation attempts in Europe and the MENA regions, where CS:GO is most popular.

STREAMHATCHET
ESPORTS LIVE STREAMING TRENDS REPORT

Our latest quarterly report offers a detailed outlook into the past and current state of the esports live-streaming market, and its relevance to the popularity of streaming platforms, esports organizations, tournaments & creators. Key takeaways include:

Esports live-streaming hours watched continue to grow year over year and are up 15% this quarter, despite a decline in overall live-streaming viewership.

Twitch and YouTube continue to dominate the space for esports live-streaming viewership, making up 62% and 30% of the market, respectively.

2023 Tempest Awards

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YOUGOV LIVING DATA INSIGHTS
Esports fans are big on brand loyalty programs!

American esports followers are noticeably more receptive to loyalty programs than the US population on the whole. They are nine-percentage points likelier than the overall population to feel that loyalty programs are a great way for brands to connect with audiences. They are also 21 percentage points likelier to say they spend more with brands they are a loyalty member of (76% vs 55%), and are 26 points likelier to recommend these brands (76% vs 50%).

TEAMS

VALORANT player Tyson “TenZ” Ngo is returning to the Sentinels starting lineup after missing four games with a finger injury and illness. The North American star will replace substitute Jimmy “Marved” Nguyen in the lineup after three weeks away from competition and hope to turn around the team’s fortunes after a disastrous 2-5 start to the VALORANT Champions Tour Americas. Sentinels will need to win both of their remaining VCT matchups and get some help from other teams to climb from eighth in the standings and land in the six-team playoff field.

Veteran League of Legends standout ??Dennis “Svenskeren” Johnsen is retiring and moving on to coaching, the former jungler announced. Svenskeren, who represented North America five times at the League of Legends World Championship and helped Cloud9 to a Worlds semifinal in 2018, came to North America in 2015 after three years in the European pro scene. He played for TSM, Cloud9 and Evil Geniuses at the League Championship Series level and was most recently on the TSM Challengers roster. The 27-year-old Denmark native expressed his interest in coaching opportunities but has not yet signed on with a team.

Ninjas in Pyjamas now holds the record for most maps played at Counter-Strike: Global Offensive Major tournaments, according to HLTV. With 139 maps played, NiP eclipsed the previous record held by Natus Vincere. Only one other team, Fnatic with 124 maps, is in the triple digits, with Virtus.pro recording 99 maps and Astralis at 98 to round out the top five teams.

INDUSTRY

Unity, a game engine software developer, is cutting 600 positions in a third wave of staff reductions in the past year. According to a company filing with the U.S. Securities and Exchange Commission, the upcoming reduction of 8% of Unity’s workforce will include restructuring of pieces of the business to attain “long-term and profitable growth.” Unity had previously eliminated a little more than 500 roles through layoffs in June 2022 and January of this year.

Super League Gaming has expanded its metaverse-focused studio suite with the addition of MELON, a development studio focused on creating in-game activations for brand partners. MELON has primarily worked in Roblox, according to a statement, and previously worked with the NFL, Chipotle, PacSun and other brands to build digital experiences. “With Super League and MELON operating as an integrated company, we can provide brands with the full spectrum of crawl, walk, run alternatives designed to achieve targeted business objectives,” MELON co-founder and CEO Josh Neuman said in a statement. “We now have best-in-class execution capabilities at all levels under one roof, with the infrastructure to scale far beyond what we thought was possible.”

SONIX, a Swiss gaming audio software startup, is expanding operations to the U.S. and opening an office in Boston. SONIX hopes to differentiate itself in the market by focusing on providing the highest-quality communications systems for competitive gaming, with ultra-low-latency as the focus. “From our new base, we can continue to grow with our European partners and clients while expanding to teams, venues, studios and consumers across the States,” SONIX co-founder and CEO Nicolas Abelé said in a statement. “The Boston area offers top engineering talent, a history of innovation especially in the audio sector, and an increasingly robust startup scene. It’s also the home of a rapidly growing esports scene with teams, venues and collegiate clubs that are going to love SONIX.”

Sony is closing in-house studio PixelOpus, the companies announced Monday. PixelOpus, known for its creative take on storytelling and art styling, produced two titles under the Sony banner: Entwined (2014) and Concrete Genie (2019). The studio is scheduled to shutter on June 2. “As we look to new futures, we wanted to say a heartfelt thank you to the millions of passionate players who have supported us, and our mission to make beautiful, imaginative games with heart,” PixelOpus said in a statement on Twitter.

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TRIVIA
This one might save our more forgetful readers a headache: What holiday takes place on May 14? (Email [email protected] with your answer, and be sure to include your name, company and city).

Answer to Our Last Trivia Question
What date is Legend of Zelda: Tears of the Kingdom scheduled to release? Answer: May 12. Kudos: Tom Moore | Kalt Productions, Los Angeles; David Westberg | SAG•AFTRA Federal Credit Union, Burbank, California; Michelle Bergmann | Mediassociates, Sandy Hook, Connecticut

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