Cynopsis Esports 3/28/24: Riot shifts League esports strategy; Mid-major developers reign; Sentinels win big in Madrid

Medias First Morning Read
Thursday March 28, 2024

Good morning! It’s Thursday and this is your early morning Esports and Gaming brief.
League of Legends developer Riot Games is shifting its esports strategy to better support its franchise teams, including a minimum revenue share guarantees and opening up additional sponsorship categories for esports organizations. The changes, Riot President of Esports John Needham said in a statement, are similar to the way Riot operates its VALORANT Champions Tour ecosystem and should help teams “improve their cash position and refocus on long-term sustainability.”

Some of the changes include:
– Participating organizations in North America, Europe/Middle East/Africa, and South Korea will receive a fixed stipend for operating in the LCS, LEC, or LCK, respectively.
– Teams will also receive a share of revenue from League of Legends esports digital content sales.
– Riot will allow teams to access additional sponsorship categories that were previously not allowed to be represented by League of Legends esports competitors.
– Riot is making its competitive roadmap more flexible so teams can participate in third-party events that can act as additional revenue streams.

The changes will attempt to solve a persistent problem in esports: Teams – and leagues, as Needham noted – have an overreliance on sponsorship dollars, and as those have drifted toward other entertainment categories or dried up overall, organizations have suffered. Riot has seen an uptick in sponsorship opportunities in late 2023 and so far in 2024, Needham said, in large part because the value proposition of esports has not changed. “We believe the imminent demise of esports has been overstated,” Needham said. “Our community engages with the sport more than ever.”

COMPETITION AND GAMING NEWS

The Atlanta FaZe took home the Call of Duty League Major 2 title on Sunday with a win over rival OpTic Texas at the Broward County Convention Center in Fort Lauderdale, Florida. The tournament, hosted by the CDL’s Miami Heretics, featured a tough road to the finals for Atlanta, which pulled out two five-game sets going in the first two rounds to avoid a lower bracket run. From there, it was smoother sailing, with FaZe taking down OpTic 3-1 in the winners final and 4-1 in the grand final to earn $150,000 of the event’s $375K prize pool.

VALORANT Masters Madrid became the most-watched event in esport’s history, with more than 1.68 million peak viewers tuning in for the tournament final between Sentinels and Gen.G and an average audience of more than 671,000 people across the 10-day tournament. Sentinels, which won the event, boasted all five of the highest spots in peak viewership, according to Esports Charts, and the North American organization brought home $250,000 of the international tournament’s $500K prize pool.

Fighting game star and gaming accessibility advocate Michael “Brolylegs” Begum died March 19 at 35 years old. The Texas native had a rare medical condition, arthrogryposis, that mostly prevented him from moving his limbs, but that didn’t stop him from becoming one of the best and most well-known Street Fighter players in the world. Brolylegs developed his own way to play, using one wrist and his face and mouth to navigate the game, and his success served as an inspiration for his peers and a generation of gamers. “He was one of a kind and always will be the heart of our family,” Brolylegs’ family said in a statement. “He won’t be forgotten and to all those he inspired, he lives on through you.”

Gaming entertainment organization Misfits Gaming is continuing its investment in development with the launch of Misfits Interactive, a game studio set to release two titles later this year. Misfits Interactive leveraging user-generated content platform Roblox for its first offerings, Head of Interactive Chris Casanova said on LinkedIn. “We started this shift in strategy last year where I grew our game team from zero to dozens of awesome people in mere months,” he said. “With such a talented group of people at my side across our executive leadership team, investors, and all Misfits as a whole, I truly believe we will leave a legacy in the coming years.”

SPONSORSHIP & ACTIVATION

Ally Financial is deepening its partnership with Rocket League Esports to build more opportunities for women’s competition and support the overall Rocket League Championship Series. The expanded deal, which is part of an ongoing partnership between Ally and Rocket League’s esports circuit, will create the 2024 Star Chasers Showdown Series, featuring three women-only events and a co-ed tournament with a total $75,000 prize pool.

The Sentinels social media team put on a masterclass following the organization’s VALORANT Masters Madrid win, including leveraging the event hype to announce a new Sentinels-branded PC build alongside partner Starforge Systems. Sentinels, which reached more than 1 million followers on X (formerly Twitter) during the Masters Madrid final, took advantage of the hype on its social media channels and earned nearly 11 million impressions on X alone across 13 posts leading into the Starforge Sentinels PC reveal. With callouts to each of the Sentinels players and the organization’s history, the Sentinels social team leaned on nostalgia, stardom, and an emotionally charged moment to create an authentic reveal that garnered more than 582,000 impressions of its own.

Red Bull is leveraging a decade of Counter-Strike: Global Offensive for a documentary retelling the history of the esport during the height of PGL Copenhagen competition. “Memories of CS:GO – The Early Years,” produced by Red Bull Gaming and Red Bull Media House, released on the Red Bull Gaming YouTube channel on Tuesday ahead of the PGL Copenhagen playoffs. The 87-minute documentary, focused on “the golden years of CS:GO and its heroes,” drew nearly 100,000 views in the 24 hours following its release and highlights the power of longform storytelling, even for an audience notorious for its short attention span.

The new-look PlayVS scholastic esports competitive program is bringing middle schools into the fold starting in Fall 2024, the organization announced, with plans to reach around 68,000 total schools across middle and high school play. PlayVS, a North American institution that has rebounded from a troubled for-profit past to better align with schools’ needs, has not revealed the game offerings for middle schoolers but confirmed the program will be free to join.

2024 Sports Media Awards

Who will YOU sit next to?

Whether it’s our luminaries from Next 3, Harlem Globetrotters, Nickelodeon or CBS Sports, or our Brands of the Year CarMax and Toyota, there’s no shortage of big names that will be in attendance for this event. Join us for our in-person awards ceremony on April 11th in NYC, where host Colin Cosell, PA Announcer of the Mets, will be bringing the house down, joined by presenters Bonnie Bernstein and former NFL-player Nate Burleson. Interested in attending?

SAVE MY SEAT

YOUGOV LIVING DATA INSIGHTS
Heavy gamers more likely to be sore losers

More than a fifth of heavy gamers – defined as those who play on PC/Console for more than 14 hours each week – ‘definitely’ agree that they don’t have fun if they don’t win games (22%). By contrast, only 14% of light gamers – who play for between one to seven hours – say they definitely agree with that statement. This highlights the importance for game makers to straddle the fine line between keeping video games challenging without making them frustratingly difficult.

STREAM HATCHET INSIGHTS
Women shaping the streaming industry

In celebration of International Women’s Day, Stream Hatchet is shining a spotlight on some of the intelligent, charismatic women shaping the streaming industry.

Emiru and QTCinderella both grew their viewership by 18% in the past year, while rivers_gg had a massive jump of 111% (up from 11K in 2022). This is encouraging, showing that viewers are gradually accepting female streamers into the core streaming space across a variety of content types. However despite this growth, there’s still a long way to go in terms of diversity on streaming platforms. In 2023, just 10% of the top 1000 streamers on Twitch were women, with YouTube and Kick not faring much better at 12% and 13% respectively.

Read more about it in Stream Hatchet’s blog.

RISE OF THE MID-MAJORS

In honor of March Madness, we’re recognizing one of the most promising trends in gaming: While layoffs at major publishers and developers continue to paint a bleak picture of the industry, smaller studios such as Pocket Pair, Inc. (Palworld) and Arrowhead Game Studios (Helldivers 2), and even one-person bands like Eric “ConcernedApe” Barone (Stardew Valley) have seen tremendous success in the marketplace.

While industry behemoths like Microsoft, Embracer Group and Bungie, among others, offer unmatched scale, that comes with a host of challenges – specifically the overhead and timetables that set massive stakes for each release, not to mention broader organizational costs that are beyond the studio’s control. Amid the difficulties of the past two years and flops or lukewarm releases from the biggest companies in the world, including games like Redfall, Skull and Bones, Forspoken, and more, smaller shops have built titles that topped Steam’s most-played charts and reshaped our understanding of what players want most.

ConcernedApe, who developed Stardew Valley as a solo project and has since brought on a handful of collaborators for updates and porting to consoles and mobile devices, is the premier example. Stardew Valley’s 1.6 update, which released on PC on March 14, has drawn stellar reviews and made it a regular among the top-10 most-played PC games once again.

Given just how different each of the releases from these developers look, publishers have to accept a new universal truth: Scale isn’t everything. The flexibility that smaller studios enjoy drives creativity that can make a serious impact. Identifying ways to encourage that type of creative excellence, regardless of the size of a team or the deadline that’s approaching, should be a priority – unless these top seeds want to continue to lose out to teams that are a tenth or less of their size.

INDUSTRY

Gaming and general entertainment fans intersect more than ever, according to Fandom’s Inside Entertainment study released this week. The annual survey, which leverages Fandom’s monthly unique visitor base of 350 million, confirmed that gaming remains the No. 1 pastime of Fandom users, but identified several key insights for entertainment marketers – including that gamers most often shift to TV or movies as a break from gaming, and 56% of them also spend time reading when away from the screen. Both of these trends align with the remarkable success of game adaptations in 2023 and bode well for continued crossover among these industries.

Retailer GameStop is cutting its workforce, with sales expected to “decline to an unsustainable level” with the ubiquity of digital download options, according to a report from Reuters. Wedbush Securities analyst Michael Pachter highlighted an inescapable problem for GameStop, once the No. 1 gaming retail brand, amid layoffs at the company and lower-than-expected revenue. GameStop will reportedly cease its business in Ireland, Switzerland and Austria alongside the reductions in workforce.

Esports organization Sprout Esports is shuttering after seven years of operation, the company announced, noting the difficulties facing small- and mid-sized esports teams in the current market. Sprout, which couldn’t compete with the kinds of salaries offered by top programs, often served as a springboard for rising talent to premier international squads, leading to “rebuilding the active roster frequently, resulting in losing precious progress over and over again,” the team said in a statement. Sprout didn’t have the flexibility to increase its contract offers, and like many smaller organizations was very reliant on team success and sponsorship dollars. “Our current business model is no longer viable to ensure required sustainable and healthy growth,” Sprout said in a statement.

The ugly parts of the games industry were a hot topic at this year’s Game Developers Conference, and GDC itself once again became an example of some of the problems plaguing the gaming space. Layoffs, of course, were a hot topic, with more than a third of developers saying their companies have been affected by workforce reductions and nearly 60% fearing more are to come, according to the GDC 2024 State of the Game Industry. Protests of the industry’s approach to layoffs came alongside the conference, as did reports yet again of harassment of women at the conference and, for the second year in a row, an alleged drugging. Snow Rui, president and CFO of game developer Hooded Horse, claimed she was drugged at a hotel bar on March 21, with Rui noting that police dismissed her as just being too drunk and not screening for roofie drugs despite her concerns.

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Answer to Our Last Trivia Question
What is the name of January’s viral video game that has reportedly lost about 67% of its player base since peaking at more than 2 million players on Steam and 3 million on Xbox? Answer: Palworld. Kudos: Tom Moore | Kalt Productions, Los Angeles; David Westberg | SAG•AFTRA Federal Credit Union, Burbank, California

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