05/18/23: Google’s latest Search Lab product could spell disaster for a myriad of gaming organizations and industries

 

Medias First Morning Read
Thursday May 18, 2023

Good morning! It’s Thursday and this is your early morning Esports and Gaming brief.

Google’s latest Search Lab product could spell disaster for a myriad of gaming organizations and industries that rely on search engine optimization and Google’s current layout to drive traffic, generate programmatic revenue and ensure discoverability for their product. Generative AI is the hottest topic in tech right now, and rightly so: The ability to aggregate institutional knowledge from many places and put it in one spot can save time and create more efficient workflows for businesses. But after decades of organizations honing best practices to build an SEO-friendly site, Google’s latest design fills the first page of a search result with an AI-generated answer to queries, with only three web pages getting a tiny block of real estate on the right side of the page.

This is a massive problem for media, marketers and businesses that have KPIs contingent upon clicks – and most, if not all, companies have some element of their business that relies on discoverability. A search for “What is Counter-Strike 2” that returns an AI answer above the first scroll instead of the official webpage for CS2 isn’t just a bad user experience, it’s an bad product for developer Valve, who would typically be able to leverage that search into downloads of its product. That’s not to mention the media organizations, esports teams, product review websites and more that created content around CS2 and are now lost in the shuffle even more than before thanks to Google’s lack of transparency about how its search algorithm works.

To put it frankly, everyone loses if this product goes through – including Google, which will be relying on a relatively untested technology to provide the right answers every time despite sites being able to pay their way up the ranks. The “AI snapshot,” as Google is calling it, is transformative in all the wrong ways and could become another example of industry-wide hype inspiring a dramatic overcorrection and bad practices by big businesses.

COMPETITION AND GAMING NEWS

Amazon Games is taking another stab at massive multiplayer online games and plans to work with Middle-earth Enterprises to produce a Lord of the Rings MMO. Amazon’s gaming efforts have been shaky so far; the company previously produced New World, an original IP MMO that received mixed reception and ultimately couldn’t break through in the hyper-competitive genre featuring titles like World of Warcraft, Final Fantasy XIV and more. The yet-untitled Lord of the Rings game is in early development, according to the studio.

A Mobile Legends: Bang Bang tournament has set the record for all-women tournament viewership with 1.37 million peak viewers of a recent event in Southeast Asia. The 32nd SEA Games brought together women’s teams from around the region to compete in one of the most-viewed esports in the world; MLBB, a mobile-only title, drew 4.27 million peak viewers for its world championship in January 2023, making it the most-watched event of the year in terms of peak viewership not including Chinese platforms. Indonesia vs. Philippines drew the record number, with the women’s tournament averaging around 305,000 viewers across almost 21 hours of play.

Legend of Zelda: Tears of the Kingdom is an early favorite for Game of the Year recognition, with the title being regarded as one of the most transformative games in recent memory. TotK drew nearly universal praise from critics, with 9/10 or 10/10 ratings abounding for Nintendo’s latest role-playing game hit. Nintendo announced it sold 10 million copies in the first three days since release, while GamesIndustry.biz reports the title is the second-biggest Nintendo release ever in the U.K. TotK also sold a record-setting 500,000 physical copies in France during its launch weekend, according to La Figaro.

South Korean and Chinese teams are once again dominating the League of Legends international stage at this year’s Mid-Season Invitational, with South Korea’s T1 and Lee “Faker” Sang-hyeok, regarded as the greatest League player of all time, showcasing some of their best international play in years. China’s JD Gaming has also torn through its competition to set up a showdown between the two organizations going into today. It appears that Europe and North America are once again well behind the competition, and that’s unlikely to change anytime soon.

SPONSORSHIP & ACTIVATION

Burger King has partnered with Chinese esports organization Weibo Gaming to make Burger King a sponsor for Weibo’s content, according to a report from The Esports Advocate. Weibo Gaming’s deal will give Burger King placement in content from its League of Legends Pro League squad, including social media activations (Weibo, the team’s parent company, is the No. 1 social platform in China), though the fast food chain will not get placement on Weibo Gaming’s jerseys, according to TEA.

Subway is getting in the game, too, via a partnership with 100 Thieves to become the “official sandwich” of the esports organization. Subway’s deal with 100 Thieves will make it a primary partner for the company’s League of Legends Championship Series team, and Subway will also work with 100 Thieves to refresh its LCS training facility in Culver City, California. Subway-branded jerseys will make their way to the 100 Thieves VALORANT and LCS teams as well.

Esports tournament organizer BLAST has launched a health-focused campaign alongside healthcare company Novo Nordisk to promote positive habits for gamers. Novo Nordisk, which focuses on pharmaceuticals for diabetes, obesity and other health concerns, partnered with BLAST for “Away From Keyboard,” which will feature event activations, a documentary series and other initiatives to promote healthy habits both during and after play.

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.

Download the Full Report Here

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YOUGOV LIVING DATA INSIGHTS

Atlanta FaZe is the most popular CDL team

The 2021 Call of Duty League (CDL) winners – Atlanta Faze – are the most popular team among CDL fans in the US (based on data for seven participating teams). Nearly a fifth of CDL followers in the US say they are fans of Atlanta FaZe. Florida Mutineers (13%), New York Subliners (12%) and LA Guerillas (11%) follow, each of them supported by more than a tenth of CDL fans.

TEAMS

Riot Games has complied with North American League of Legends Championship Series teams’ requests to end the mandate that they field a Tier 2 organization as part of their participation in the LCS. The move could have a dramatic impact on the amateur scene in North America, known as the North American Challengers League, with the LCS Players Association claiming “as many as 70 players, coaches and manager will lose their jobs overnight” following the May 12 announcement. The LCS participants’ request to remove the NACL team stipulation, Riot said, will be effective for the Summer 2023 split and, teams hope, will “unlock more operational and financial flexibility” amid a bear market for esports organizations. Teams including TSM and Immortals have already cut ties to the NACL, while Team Liquid has reaffirmed its commitment to the Tier 2 scene and announced it will retain its roster.

FaZe Clan posted a $14 million net loss in Q1 of 2023, the gaming organization announced in its quarterly filing. FaZe, which has been in the news frequently since September for its woes since entering the public market, focused its shareholder letter on adjustments to the business in an effort to ease concerns and showcase its strategy for turning the organization around. The strategy, however, seems old hat and hinges on other businesses’ success rather than its own product. “We are focusing on community engagement and producing short-term content to capitalize on the resurgence of live events,” FaZe said in the letter. “Live competition has bounced back, and the industry is seizing on pent-up demand for live experiences. We believe we are well-positioned to benefit from this trend, thanks to our strategic efforts during the pandemic to maintain engagement and stay connected with our fans via key streaming platforms.”

European esports organization Heroic has sold to Norwegian investment fund Krow Bidco AS at a $5.25 million valuation after struggling to stay afloat throughout the past year. Despite the success of its Counter-Strike: Global Offensive squad, Heroic’s operational costs and a lack of sponsorship dollars cut into the organization’s capital in what’s becoming an all-too-familiar story for mid-sized esports organizations this year. Last week, another CS:GO stalwart, the Copenhagen Flames, announced it was ceasing operations because of a lack of funding and sponsorship interest as well.

XSET co-founder and chief business development officer Clinton Sparks has left the company, according to The Esports Advocate. The esports lifestyle organization has seen several executive departures this year and last, with XSET chief experience officer Rob Martin stepping down in January and former co-founder and chief operating officer Marco Mereu leaving in 2022 to start a new esports organization, M80 . XSET has not yet announced a replacement for Sparks.

INDUSTRY

About 23% of gamers play on mobile, PC and consoles, according to a report from Newzoo that shows more players than traditionally expected are platform-agnostic. PC and mobile have the most overlap, with 25% of players on one platform also engaging with the other, while PC and console players who don’t play on mobile are the least plentiful at only 6% of respondents. The report also showed geographic preferences for each platform, with PC being the preferred way to play in most of Europe, consoles controlling most of North and South America and mobile dominating the Southeast Asia market.

Square Enix saw a 6% dip in sales year-over-year, according to its annual report, but expects a 5% increase this year thanks in part to the widely anticipated release of Final Fantasy XVI. Square Enix, known for that franchise as well as its expertise in role-playing games overall, had a touch-and-go year with both Octopath Traveler 2 and Forspoken, the latter of which was expected to be a marquee title for the developer, underperforming consumer expectations. Final Fantasy XVI, however, seems like a sure thing as the next piece of an internationally renowned franchise; the title will likely sell regardless of quality (to some extent).

The European Commission has approved Microsoft’s acquisition of Activision-Blizzard and in doing so took some of the steam out of the U.K.’s Competition and Markets Authority for its prior ruling that the deal was anti-competitive. In its decision, the EC noted that cloud gaming exclusivity, which the CMA cited as the primary reason for its choice to reject the deal, is neither as developed as suggested by the CMA nor dramatically affected by the merger. Microsoft’s promise of a decade of free licensing for its cloud service assuaged any concerns the EC might have had about a cloud gaming monopoly. “The commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation,” the EC said in a statement. The CMA fired back in a surprising statement defending its decision. “Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years,” the U.K. watchdog said. “While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision.”

Riot Games CEO Nicolo Laurent announced his retirement after 14 years with the game publisher. Laurent, who spent the last six years as CEO of the company, said his departure will allow him to focus on family and relocate to France, his native country. Riot global president A. Dylan Jadeja will take on the top position at Riot after a transition that will take “a few months,” Laurent said. “I’ve been here for more than 12 years, and in many ways, Riot is my home; a home I’m deeply invested in, fiercely protective of, and grateful for every single day,” Jadeja added. “It would be disingenuous for me to suggest that I have all the answers and an action plan already defined. In fact, I’d argue that this would be inauthentic to who I am and how I work. Over the next few months, my intention is to use this transition window to listen and (re)learn. … I’d like to take stock of where we are and get a deeper understanding of what’s working and what we can do better.”

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TRIVIA
Mobile Legends: Bang Bang has come up a lot lately, so let’s see what you know about it. What is the name of the developer of MLBB? (Email [email protected] with your answer, and be sure to include your name, company and city).

Answer to our last trivia question
What holiday takes place on May 14? Answer: Mother’s Day. Kudos: Tom Moore | Kalt Productions, Los Angeles; David Westberg | SAG•AFTRA Federal Credit Union, Burbank, California; Creed Heilskov | ImOn Communications, Cedar Rapids; Michael Goodman | Radio One Atlanta, Atlanta; Barb Throm | Stealth Creative, St. Louis, Missouri

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