A decade ago, most people would scoff at the idea of making money playing video games. Fast-forward to 2019 and the eSports market, which was worth less than $100 million in 2010, is topping $1 billion for the first time. The trend is accelerating according to Statista, which predicts the market will reach $1.79 billion by 2022.
The popularity shows in the numbers. 70% of Americans play video games. 54% of those gamers are male and 46% are female. 52% of U.S. gamers are college educated.
In short, gaming is no longer a niche market or for children; it has entered the mainstream.
Technology has turned the whole video games industry on its head. Originally, the primary revenue generator was game and console sales. The advent of the dotcom age flipped the script to make advertising the biggest source of revenue. With mobile now the preferred gaming platform, ads and in-app purchases are dominant with the new revenue stream of ads and ticket sales from eSports leagues and venues.
Today, the gaming business is as competitive as the physical professional sports. Teams recruit players and put them through some rigors to make sure that they not only have the skills, but the attitude and other attributes to make a team a winner. It’s certainly understandable with prize packages going up into the millions of dollars for an event.
To lend a little color to just how big the business is getting, consider that Fortnite developer Epic Games committed a stunning $100 million for Fortnite tournament prize pools from 2018-2019 and media giant Comcast (NASDAQ:CMCSA) is spending $50 million to build an eSports arena.
In addition to people filling an arena, another 650 million are expected to be watching eSports online by 2020. Only the NFL has more viewers in America than eSports.
Bookies haven’t overlooked the popularity of eSports. There are now online eSports betting sites where people can lay down wagers on online gaming.
Live Current Media Inc. (OTCQB: LIVC) is hoping to capitalize on the boom by taking a unique angle within the eSports market. The Vancouver-based company, first known for its domain name business, has climbed into the eSports ring, last month announcing its plans to develop Boxing.com FEDERATION.
Boxing is wildly popular worldwide. For 45 years, the biggest fights were broadcast by the premium cable network HBO. Last year, though, HBO bowed out of the business, effectively turning over the reins to sports streaming service DAZN when middleweight champ Canelo Alvarez left HBO and signed a 5-year, 11-fight deal worth a minimum of $365 million with DAZN.
Think about that. There’s so much money in boxing that DAZN, which only launched in September 2018, was able to make Alvarez the biggest contract in sports history. Not even the mega-contracts of Major League Baseball’s Bryce Harper ($330 million), Gerritt Cole ($324 million) or Manny Machado ($300 million) measure up, and those contracts were for 13, 9 and 10 years, respectively.
Even with its popularity, boxing has its issues. It’s splintered with no single league, more than 15 different governing organizations (i.e. WBC, IBF, WBA, etc.) and a haphazard scheduling system. Worse yet, the best fighters often don’t ever face each other because promoters can’t seem to work out fight terms. The unspoken fact is that promoters often don’t want boxers to fight the best challengers, only to accept winnable fights.
Live Current Media is modeling its new game to exemplify what boxing should be. The difference is the fights will be fought by gamers on computers.
Boxing.com FEDERATION will have nine different weight classes. Computer algorithms will handle rankings. Title fights will be chosen and scheduled by Boxing.com, but there is a challenge system within the game that allows non-title fights to occur at any time.
Fighters can’t just aim for the champ. A player can only challenge a fighter ranked within 100 places from their own rank. Only fighters who are online can be challenged and they must accept the challenge or drop in the rankings to the spot of the challenger. If they accept the challenge and lose, they only drop one place but get an L on their record. Rankings will be automatically adjusted monthly to promote activity and discourage inactivity.
Just like in the real world, fighters will start in an amateur league to hone their skills. Gamers can play for free and hold amateur belts as they prepare for the pro league. There will be no cash prizes at this level.
The top amateurs will automatically move up to the professional league and that’s where things get serious. The virtual fighters can earn cash prizes for getting into the top 10 in their weight class. There will also be title belts for champions in each weight class for each country in the world, just as there is in real boxing. These champions will also receive cash prizes for winning their belts.
Boxing.com FEDERATION is in the programming phase with plans to launch in Fall 2020. Even with the launch more than half a year away, Live Current looks to have a competitive edge with a dearth of competition in the eSports boxing space. Given the way connected gamers have embraced fighting games like Tekken and Street Fighter, a high-end boxing digital boxing league should command significant attention, especially with the right marketing strategy.
Elsewhere, Live Current is developing SPRT MTRX, a mobile gaming app where players bid on the final scores of professional sports such as NHL, NFL, MLB and NBA. This isn’t a betting game like Draft Kings or Monkey Knife Fight where players must deposit money to play. It is a free-to-play model that generates revenue through advertising – like the popular game HQ Trivia ($10 million in 2018 revenue, $100 million valuation after six months of operations).
Events are organized as "Challenges" and cover multiple games over one night, one weekend or full seasons. Players use a unique system for bidding on scores, with cash and prizes going to the player who scores the most points for winning games.
Players can follow along on multiple leader boards that can be split between all players and favorite players, creating a social aspect to the game.
Revenue for the payouts and for the company will be generated through short (three-to-five-second) video ads before bidding results are shown.
SPRT MTRX is operational currently in beta mode with plans to finalize the app for a launch next winter.
Online tech has been the pathway to success in the past for management, including CEO David Jeffs growing Communicate.com from a $1 million company into a $40 million company.
Last month, Live Current hired the venerable Dmytro Dvinyaninov as Director of Technology. Dvinyaninov is being tasked to provide oversight as well as accelerate development of Boxing.com FEDERATION. Previously, he founded OpenCal, an online appointment scheduling and booking software company that was acquired in September 2011 by Groupon (NASDAQ:GRPN) as the foundation for its Groupon Scheduler offering.
With an average daily volume of less than 2,000 shares and a market capitalization of $1.4 million, Live Current Media (OTCQB:LIVC) seems to be underappreciated and overlooked for a company at the forefront of bringing boxing to eSports while looking to a proven model to tackle the hot online gaming market.
These are tremendous market opportunities and the next six months or so should be a defining period for the company, particularly with boxing.com FEDERATION, which could make a big splash in the industry.
