Esports Industry Table of Contents

1. Introduction 2. Market Overview a. Global Industry b. Americas Esports Industry 3. Growth Drivers 4. Challenges 5. Opportunity 6. Major Franchises and Tournaments 7. Major Teams and Players 8. Transaction Overview a. Overview b. Private Equity Funding 9. Media Coverage and Rights a. Media Rights Deals b. Media Coverage Introduction Introduction Overview

• Esports or Electronic Sports is competitive gaming at a professional level and in an organized format (a tournament or league) with a specific goal (i.e., winning a champion title or prize money) and a clear distinction between players and teams that are competing against each other What is Esports? • The platform is usually video games, or any other game where a winner and a loser can be decided

• The different video game genres associated with eSports are real-time strategy (RTS), first-person shooter (FPS), fighting, and multiplayer online battle arena (MOBA) • The majority of popular esports are team-based games played in leagues or tournaments throughout the Type of Esports year, culminating in one final event. Some of those leagues or tournaments are region-specific, for example, European leagues where European teams will only play other European teams

• Around the world, there are different Esports tournaments and leagues organized which are held at major arenas • Esports tournaments are viewed through both physical attendees at the venue as well as online viewers. Esports Tournaments Esports also has online streaming platforms which get exclusive rights to stream the events on their website • The players generally compete for both cash prizes and recognition

Source: The Telegraph Introduction History of Esports

The growth of eSports in , which is one of the major In April 2006, the G7 teams The first known Esports market, is federation were formed by seven Esports video game thought to have been prominent Counter-Strike teams. , an online competition took influenced by the mass The founding members were streaming platform place on 19 October building of broadband 4Kings, , , launched in 2011, 1972 at Stanford internet networks , NiP, SK-Gaming, routinely streams University for the following the 1997 . The organization was popular eSports game Spacewar Asian financial crisis dissolved in 2009 competitions

1980 2000 2010 2013

1972 1997 2006 2011

The first large scale video The Korean e-Sports Esports sees tremendous Twitch viewers of the game competition, The Association, an arm growth, incurring a large watched 12 billion Space Invaders of the Ministry of increase in both viewership minutes of video on Championship was held Culture, Sports and and prize money. The the service. During by Atari, attracting more Tourism, was founded number of tournaments one day of The than 10,000 participants to promote and increased significantly, going International, Twitch across the , regulate eSports in from about 10 tournaments recorded 4.5 million establishing competitive the country in 2000 to about 260 in 2010 unique views gaming as a mainstream hobby

Source: Esportsearnings.com, The Verge, Dailydot Market Overview Market Overview Global Market Overview Global Esports Industry

• Global Esports revenues has grown at a CAGR of 50.0% from $194 million in 2014 to $655 million in 2017, and is expected to grow at a rate of 26.0% to $1,650 million in 2021. In 2018, it is expected that North America will account for $345 million and for $164 million out of the $906 million • The number of Esports Enthusiasts worldwide will reach 165 million in 2018, a YoY growth of ~15.2%. The total Esports Audience will reach 380 million this year, a year-on-year growth of ~13.5% • The global average annual revenue per Esports Enthusiast will be $5.49 this year, up by 20% from $4.58 in 2017 • The total prize money of all Esports events held in 2017 reached $112 million, breaking the $100 million mark for the first year

Market Size Audience Growth

Revenue (in $millions) In millions $1,800 600 $8.0 $1,650 $6.8 $1,488 $6.3 $6.6 $7.0 $1,600 500 $1,400 $5.5 $6.0 $1,187 400 307 $1,200 $4.6 $5.0 $4.1 273 $1,000 $906 300 242 $4.0 215 $800 $655 $2.7 $2.2 192 $3.0 $493 200 160 $600 115 114 $2.0 $400 $325 250 $194 100 190 218 143 165 $1.0 $200 90 120 121 - 0 - 2014 2015 2016 2017 2018P 2019P 2020P 2021P 2014 2015 2016 2017 2018P 2019P 2020P 2021P Esports Enthusiast Occasional Viewers Average Revenue Source: Statista, - 2017, Newzoo per Esports Enthusiast Market Overview Global Market Overview 2018 Market Breakdown Merchandise and Tickets (10%) Sponsorship Revenue (40%) Consumer spending on tickets and Sponsorship is the highest grossing merchandise will total $95 million esports revenue stream worldwide, increasing from last year spending of $96 contributing $359.4 million in 2018 $86 million compared to $234.6 million in 2017

$116 Game Publisher Fees (13%) $359 Game publisher fees will remain the slowest-growing revenue generator for esports toward 2021, with a CAGR (2016-2021) of ~3.5% $161

Media Rights Revenue (18%) Advertising Revenue (19%) $174 Media Rights is the fastest-growing Advertising will be contributing $173.8 revenue stream growing with a CAGR million in 2018 compared to $140.4 (2016-2021) of ~50%. By 2021, media million in 2017 growing at a rate of rights revenues will more than double 23.8% compared to 2018

Source: Statista, Newzoo, EsportEarnings.com Market Overview Global Market Overview Brand Investment Revenue Revenue Breakdown

• Brand Investment Revenues, i.e., revenues from Media Rights, $1,800 Advertising, and Sponsorship has always been a major chunk of $1,500 $265 the entire esports revenue over the past several years. It is $1,200 expected to be more than 83% of the total revenue of $1,650 $900 million by 2021 $212 $1,385 $600 $187 $143 $300 $694 $350 $468 - In millions 2016 2017 2018P 2021P Brand Investment Revenues Other Revenues Sponsorship Revenue Media Rights Revenue

• Sponsorship Revenue comprises of any revenues generated by • Media Rights Revenues are generated through media property, teams and organizers through sponsorship deals. All deals including all revenues paid to industry stakeholders to secure the relating to sponsoring an event, including product placement, rights to show esports content on a channel. This includes sponsoring teams, and payments by brands for the use of team, payments from online streaming platforms to organizers to event, or game-specific IP rights in their marketing broadcast their content, foreign broadcasters securing rights to communications show content in their country, or copyright costs to show video • Previously, sponsorship was only provided by companies and content or photos of an esports competition. organizations directly involved in the gaming industry such as • Growing with a CAGR (2016-2021) of ~49.8%, media rights is the Razer which manufactures gaming accessories and devices. fastest-growing revenue stream. By 2021, media rights revenues However, more and more firms from mainstream industries such will more than double compared to 2018, making it the second- as Coca-Cola are beginning to invest in this sector which will largest generator of esports revenues globally boost the sponsorship by a significant margin Source: Newzoo Market Overview Americas Market Overview Americas Esports Industry Americas Audience Growth

• The Americas are a key region for Esports, representing 25% of In millions the global esports audience and 40% of the revenues generated 175 within the esports industry 150

• North America has had some large investments in the esports 125 sector from different game publishers, venture capitalist, and 79 traditional media which is boosting the industry performance as 100 a whole in that area 75 54 44 • In 2017, the total revenue from North America was 36.4% of the 50 entire global revenue, i.e., $240 million with an average revenue 67 per fan of $9.7 25 41 49 • Recently, there have been many major traditional sports teams 0 which have invested into esports and bought a team. Some of 2016 2017 2020P the prominent transactions were Magic Johnson being part of a Esports Enthusiast Occasional Viewers group which acquired the esports franchisee as well as Philadelphia 76ers who acquired esports teams and

Source: Statista, Newzoo Growth Drivers Growth Drivers

• Esport Enthusiasts are those viewers who regularly watch esport events as well as participate in them sometimes. They are one of the major drivers of revenue in the industry Esports Enthusiasts • Enthusiasts have been increasing at a significant rate with the occasional viewers also converting to enthusiasts over the past years. They help generate revenue through ticket purchases, streaming, and merchandising

• Esports franchises are now planning to focus on Mobile Esports games. Due to the drastic increase in the mobile phone users worldwide, inclusion of mobile esports will increase the viewership as well as the Mobile Phone and Internet number of participants in the coming years Penetration • With increasing mobile phone devices it will also provide an opportunity to players who are unable to invest excess money into the hardware required for PC gaming to participate in esports

• With the market being in a growing stage, new publishers are entering the market on a daily basis which is increasing the number of tournaments and leagues organized around the world New Publishers and Games • New games are also being introduced to match the traditional sports which have their own fan base and therefore increase the overall viewer base

• Previously, the Esports industry had funding only from the game publishers and gaming-focused companies who would invest into teams and tournaments Increased Funding • Recently, in the past few years, the industry has been seeing an increased funding from other investors as well who want to venture into the Esports world. There have been significant investments from traditional esports players as well such as Magic Johnson and Philadelphia 76ers

Source: Newzoo Challenges Challenges

• The esports tournaments are usually organized by different game publishers such as Inc. which organizes the North American league for Expensive Buy-Ins • These tournaments have a huge amount of buy-in with the price for participating in the event going up to $35 million as per ESPN reports

• Recently there have been cases where players have been mistreated by organizations and have been refused competitive salaries. Organizations also force players to play long hours which cause burnouts Player Exploitation • Players must also handle their own treatments and carry their own medical insurance. Since most eSports play requires many actions per minute, players may get repetitive strain injuries

• Currently, there are several unofficial organizations such as IesF and WESA, who are working towards Absence of an making esports a globally recognized sport. However, there is no central official governing body such as International Governing FIFA or ICC which looks over the entire industry and handles the events Body • The lines between different business models are not defined. It’s unclear where opportunities for the leagues and teams begin and end and what the opportunities are for players

• The events and tournament do not have any fixed dates or month during which they are held and also do not have any fixed location Irregular Organization of Events • The organizers of events currently do not have any coordination and crisscross each other to poach the other organizer’s business which results in lower industry development overall

Source: Dot ESports, Venture Beat, RIOT games Opportunity Opportunity

• International Olympic Committee is currently discussing internally whether Esports should be Recognition as an Olympic considered as an Olympic sport and whether it should be included in the tournament Sport • Olympic would be a big game changer for esports as it will get recognition in the eyes of the general public who are not that familiar with the gaming world

• Previously, Esports events were only streamed on Twitch and YouTube Media Rights • Recently, BAMtech and RIOT Games have entered into a deal where BAMtech would have the exclusive rights to stream RIOTs events. Also, other major media houses are looking into buying media rights such as Amazon, Facebook, and Youtube

• Esports is a highly concentrated market with developing markets such as India being a huge opportunity Untapped Markets and • Gamers residing in these markets who do not have the necessary infrastructure to properly grow and Geographic Sectors create a livelihood out of this profession

• Previously, sponsorship was only coming from technology focused companies such as Razer which Sponsorship from Other manufactures gaming parts and accessories Industries • There are major companies from other industries such as Coca-Cola and Buffalo Wild Wings who are striking deals and tapping into the market which will help increase the revenues from sponsorship

• Esports industry on an overall basis has a major discrepancy for the facilities provided to different kinds Providing Opportunity to of gamers such as Amateurs and Professionals Amateur Gamers • There is a great market to create more opportunities for amateur players who do not get the same facilities as professional players and do not have a team to play in the major leagues/tournaments

Source: Business Insider, Business Week, Newzoo, The Drum, Forbes, Sports Business Journal Major Franchises and Tournaments Major Franchises and Tournaments

Overview Top 5 Most Viewed Franchise Content

• Globally, there are different esports franchises such as 2, Rank Franchise Esports Hours (in millions) League of Legends, etc. which have their respective fan bases and viewer base. Every franchise has its own set of subscribers 1 21.3 and followers and they rarely overlap 2 Overwatch 17.2 • As per the Newzoo report, only 8% of viewers watch all three 3 League of Legends 14.3 esports content with the League of Legends viewers being the least likely audience to watch other games 4 CS:GO 12.6 • Top 10 franchise accounted for 84 million esports hours in April 5 6.2 2018, out of which the top 5 accounted for 85%, i.e., 71 million hours Player Overlap (as of May 2017) Viewer Overlap (as of May 2017)

League of Legends League of Legends

32% 37%

6% 11% 4% 13% 8% 8% 13% 5% 24% 8% 5% 25%

DOTA 2 Counter Strike DOTA 2 Counter Strike

Source: Esportsearnings.com, Newzoo, Major Franchises and Tournaments Dota 2 – The International Overview The International 2017 Winners

• Dota 2 is a free-to-play multiplayer online battle arena (MOBA) Rank Team Prize Money video game developed and published by 1 Team Liquid $10,862,683 • It is a player dominated franchise rather than a viewer dominated with 57% of the entire community only playing the game. It has a 2 $3,950,067 relatively low reach in the West, with more popularity in Eastern 3 LGD.Forever Young $2,592,231 Europe and Southeast Asia 4 LGD Gaming $1,728,154 • Dota 2 has its own league called ‘The International’ hosted by Valve Corporation which is one of the biggest esports event to 5 $1,110,956 be held every year 6 Virtus.Pro $1,110,956 • The first tournament took place in , at in 2011 and was held shortly after the public reveal of Dota 2, with a total prize pot of $1.6 million Game Enthusiasts(2) • The seventh International took place in 2017, with the prize pool totaling over $24 million, making it the largest eSports prize pool for a single tournament. The eighth International will be held at the Rogers Arena in Vancouver, Canada in August 2018 • Dota 2 had Highest Esports Hours(1) on Twitch of 21.3 million hours in April 2018 and has ~4.5 million followers as of May Only Playing Only Viewing 2018 57% 23% 20%

(1) Esports hours is content from professionally organized esports competitions and does not include content from individual (pro-player) streams (2) Game Enthusiasts are the sum total of viewers of esports events and players (anyone who has played a specific title in the past three months) Source: Esportsearnings.com, Newzoo, Steam Major Franchises and Tournaments Dota 2 – The International Most Followed Streamers on Twitch Total Hours Watched on Twitch(1)

In millions Rank Streamer Followers 50.0

1 BeyondTheSummit 629,420 39.8 40.0 40.0 2 Dendi 583,871 32.8 30.9 3 DreadzTV 519,846 30.0 4 Arteezy 502,193 20.0 5 AdmiralBullDog 485,785

6 Starladder1 472,205 10.0 7 VeRsuta 420,920 8 Dota2RuHub 420,685 - Jan-18 Feb-18 Mar-18 Apr-18 9 A1taOda 410,227 10 dota2ti 379,853 11 Ybicanoooobov 304,635 12 dota2ti_ru 293,420 13 Stray228 288,669 14 HelenaLive 278,441 15 CarTmaNzbs 275,381

(1) Total Hours comprises of both Esports hours which is content from professionally organized esports competitions and content from individual (pro-player) streams Source: TwitchMetrics as of 11th May, 2018, Newzoo Major Franchises and Tournaments CS:GO – WESG Overview WESG 2017 Winners

• Counter-Strike: Global Offensive (CS:GO) is a multiplayer first- Rank Team Prize Money person shooter video game developed by Hidden Path Entertainment and Valve Corporation 1 Fnatic $800,000 • The game pits two teams against each other: the Terrorists and 2 $300,000 the Counter-Terrorists. Both sides are tasked with eliminating the 3 Russia $150,000 other while also completing separate objectives. There are eight game modes, all of which have distinct characteristics specific 4 Team One $70,000 to that mode • Global Offensive has a competitive scene, with Valve-sponsored tournaments being the premier competitive events for the game • In 2016, the World eSports Association (WESA) was founded by ESL and many eSports teams, including Fnatic, , Game Enthusiasts(2) Team EnVyUs, and FaZe Clan, though the latter-most left soon after its formation • World Electronic Sports Games (shortened as WESG) is an international eSports championship tournament based in and organized by AliSports which has a CS:GO tournament Only Playing Only Viewing • CS:GO had Esports Hours(1) on Twitch of 22.7 million hours in 47% 23% 30% April 2018 and has ~9.4 million followers as of May 2018

(1) Esports hours is content from professionally organized esports competitions and does not include content from individual (pro-player) streams (2) Game Enthusiasts are the sum total of viewers of esports events and players (anyone who has played a specific title in the past three months) Source: Esportsearnings.com, Newzoo, Steam Major Franchises and Tournaments CS:GO – WESG Most Followed Streamers on Twitch Total Hours Watched on Twitch(1)

In millions Rank Streamer Followers 80.0 69.4 January saw a surge in the number 1 summit1g 3,100,598 70.0 of hours watched as ELEAGUE’s 2 ESL_CSGO 2,433,018 60.0 CS:GO tournament was streamed exclusively on Twitch 3 PhantomL0rd 1,392,502 50.0 4 DreamHackCS 1,339,728 40.0 37.1 27.7 5 pashaBiceps 892,652 30.0 22.7 6 PGL 780,553 20.0 7 Starladder5 760,758 10.0 8 m0E_tv 686,255 - Jan-18 Feb-18 Mar-18 Apr-18 9 gafallen 606,104 10 ScreaM 580,962 11 543,052 12 Hiko 510,693 13 tarik 508,131 14 Stewie2K 459,265 15 ceh9 455,330

(1) Total Hours comprises of both Esports hours which is content from professionally organized esports competitions and content from individual (pro-player) streams Source: TwitchMetrics as of 11th May, 2018, Newzoo Major Franchises and Tournaments Overwatch – Overview Game Enthusiasts(2)

• Overwatch is a team-based multiplayer first-person shooter video game developed and published by , which released on May 24, 2016 • Blizzard developed and added new characters, maps, and game modes post-release, with all Overwatch updates being free, and Only Playing Only Viewing the only additional cost to players being microtransactions to 21% 61% 18% earn additional cosmetic rewards • Blizzard reported over US$1 billion in revenue during the first year of its release, and had more than 35 million players by the end of 2017. The game received numerous accolades, including being awarded Game of the Year at 2016, D.I.C.E. Awards 2017, and Game Developers Choice Awards 2017, as well as from numerous publications • Overwatch has had many leagues in the previous years but the major one was the organized by Blizzard. However, in 2017, Blizzard announced the Overwatch League which is similar to its leagues for League of Legends • Overwatch League is currently in its first season which is stated to complete in June with the winner earning a prize money of $1 million and the total pot being of $3.5 million • Overwatch had Esports Hours(1) on Twitch of 17.2 million hours in April 2018 and has ~8.7 million followers as of May 2018

(1) Esports hours is content from professionally organized esports competitions and does not include content from individual (pro-player) streams (2) Game Enthusiasts are the sum total of viewers of esports events and players (anyone who has played a specific title in the past three months) Source: Newzoo, IGN, PCGamer Major Franchises and Tournaments Overwatch – Overwatch League Most Followed Streamers on Twitch Total Hours Watched on Twitch(1)

In millions Rank Streamer Followers 40.0 1 OverwatchLeague 953,429 32.5 31.9 31.5 2 A_Seagull 718,194 30.0 26.6 3 aimbotcalvin 520,518 4 xQcOW 486,402 20.0 5 Kephrii 373,175 6 PlayOverwatch 344,379 10.0 7 Wraxu 308,818 8 ster 300,736 - Jan-18 Feb-18 Mar-18 Apr-18 9 iddqd 272,127 10 Blizzard 260,979 11 sixwong 245,691 12 Gale_Adelade 215,056 13 dafran 208,119 14 SSSWolf 198,956 15 OverwatchContenders 196,007

(1) Total Hours comprises of both Esports hours which is content from professionally organized esports competitions and content from individual (pro-player) streams Source: TwitchMetrics as of 11th May, 2018, Newzoo Major Franchises and Tournaments Hearthstone – Hearthstone World Championship Overview HWC 2017 Winners

• Hearthstone, originally Hearthstone: Heroes of Warcraft, is a Rank Player Prize Money free-to-play online collectible card video game developed and published by Blizzard Entertainment released worldwide on 1 Tom60229 $250,000 March 11, 2014 2 Fr0zen $150,000 • The game is a turn-based card game between two opponents, 3 Jasonzhou $100,000 using constructed decks of 30 cards along with a selected hero with a unique power 4 Surrender $100,000 • The game has been favorably reviewed by critics and is financially successful for Blizzard, making as much as $40 million per month as of August 2017. As of May 2017, Blizzard has reported more than 70 million Hearthstone players • Blizzard hosted the first Hearthstone World Championship at Game Enthusiasts(2) BlizzCon in November 2014 which featured a total prize pool of $250,000, and the American winner, James "Firebat" Kostesich, received $100,000 • The last Hearthstone World Championship had a $1 million prize pool and took place in January 2018; it was held in Amsterdam. The Taiwanese winner, Chen Wei Lin (‘Tom60229’), received Only Playing Only Viewing $250,000 62% 20% 18% • Hearthstone had Esports Hours(1) on Twitch of 6.2 million hours in April 2018 and has ~4.0 million followers as of May 2018

(1) Esports hours is content from professionally organized esports competitions and does not include content from individual (pro-player) streams (2) Game Enthusiasts are the sum total of viewers of esports events and players (anyone who has played a specific title in the past three months) Source: Esportsearnings.com, Newzoo, Gamasutra Major Franchises and Tournaments Hearthstone – Hearthstone World Championship Most Followed Streamers on Twitch Total Hours Watched on Twitch(1)

In millions Rank Streamer Followers 60.0 1 Nl_Kripp 1,148,697 50.0 2 AmazHS 892,474 42.8 40.0 3 TrumpSC 824,993 35.1 4 PlayHearthstone 636,840 30.0 28.0 28.0

5 Kolento 503,252 20.0 6 ThijsHS 500,554 10.0 7 Savjz 489,429 8 bmkibler 386,829 - Jan-18 Feb-18 Mar-18 Apr-18 9 SilverName 361,751 10 HSdogdog 343,322 11 MaSsanSC 283,646 12 Firebat 235,071 13 Sjow 204,130 14 ddahyoni 200,308 15 LenaGol0vach 194,112

(1) Total Hours comprises of both Esports hours which is content from professionally organized esports competitions and content from individual (pro-player) streams Source: TwitchMetrics as of 11th May, 2018, Newzoo Major Franchises and Tournaments League of Legends – LoL Championship Series Overview Lol World Championship 2017 Winners

• League of Legends is a multiplayer online battle arena video Rank Team Prize Money game developed and published by Riot Games. It is a fast-paced, competitive that blends the speed and intensity of 1 Samsung Galaxy $1,855,114 an RTS with RPG 2 SK Telecom $667,841 • League of Legends was generally well received upon its release 3 $346,288 in 2009, and by July 2012, League of Legends was the most played PC game in North America and Europe in terms of the 4 Team WE $346,288 number of hours played. As of January 2014, over 67 million people played League of Legends per month, 27 million per day, and over 7.5 million concurrently during peak hours. • In September 2016 the company estimated that there are over 100 million active players each month Game Enthusiasts(2) • In North America and Europe, Riot Games organizes the League Championship Series (LCS), located in and Berlin respectively, which consists of 10 professional teams in each continent. Similar regional competitions exist in China (LPL), South Korea (LCK), Southeast Asia (GPL), and various other regions. These regional competitions culminate with the annual World Championship. The 2017 World Championship had 60 Only Playing Only Viewing million unique viewers and a total prize pool of over $4 million 45% 29% 26% • League of Legends had Esports Hours(1) on Twitch of 14.3 million hours in April 2018 and has ~10.5 million followers as of May 2018

(1) Esports hours is content from professionally organized esports competitions and does not include content from individual (pro-player) streams (2) Game Enthusiasts are the sum total of viewers of esports events and players (anyone who has played a specific title in the past three months) Source: Esportsearnings.com, Newzoo, WSJ Major Franchises and Tournaments League of Legends – LoL Championship Series Most Followed Streamers on Twitch Total Hours Watched on Twitch(1)

In millions Rank Streamer Followers 100.0 88.3 90.0 88.7 1 Riot Games 2,896,440 80.5 80.0 2 2,276,234 73.8 70.0 3 Nightblue3 2,210,474 60.0 4 loltyler1 1,616,758 50.0 40.0 5 TSM_Bjergsen 1,426,781 30.0 6 Gosu 1,407,885 20.0 7 boxbox 1,328,006 10.0 8 Faker 1,294,667 - Jan-18 Feb-18 Mar-18 Apr-18 9 C9Sneaky 1,218,206 10 Trick2g 1,183,224 11 1,111,611 12 YoDa 1,017,842 13 SivHD 993,678 14 Voyboy 970,751 15 KayPeaLoL 697,992

(1) Total Hours comprises of both Esports hours which is content from professionally organized esports competitions and content from individual (pro-player) streams Source: TwitchMetrics as of 11th May, 2018, Newzoo Major Teams and Players Major Teams and Players Team Liquid Overview Top Games

• Team Liquid is a multiregional professional esports organization Rank Game Earning(1) based in the Netherlands that was founded in 2000 1 Dota $14,976,847 • It is the one of the largest esports team with a total prize money earned of ~$19 million over a course of 1191 tournaments 2 StarCraft $1,292,892 • In January 2015, Team Liquid officially merged with 3 Counter-Strike $1,120,806 under the Liquid banner, bringing on Steve Arhancet, his 4 $335,700 supporting staff, and former Curse League of Legends, Street Fighter, and Super Smash Bros. teams 5 Street Fighter $303,282 • It is currently owned by ‘aXiomatic’, an entertainment and sports management company which is an investor group including Peter Guber, and sportsperson Magic Johnson • Team Liquid’s European Dota 2 squad won The International Top Players 2017 which had a prize money of ~$10 million Rank Player Name Earning(1) 1 Kuro Takhasomi $2,977,022 2 Ivan Ivanov $2,961,522 3 Lasse Urpalainen $2,957,022 4 Maroun Merhej $2,581,872 5 Amer Al-Barkawi $2,575,672

(1) As part of the current team Source: Team Liquid Website, Esportsearnings.com, Axiomatic Major Teams and Players Overview Top Games

• Evil Geniuses (EG) is an esports organization based in San Rank Game Earning(1) Francisco. Founded in 1999, the organization has fielded players in various fighting games, Dota 2, League of Legends, StarCraft 1 Dota 2 $15,092,263 II, , Halo, , , and Tom 2 StarCraft $797,098 Clancy's Rainbow Six Siege 3 Halo $299,525 • It was formerly a subsidiary of GoodGame Agency, which in turn was owned by Amazon.com through its division Twitch 4 Call of Duty $168,550 • It is the one of the largest esports team with a total prize money 5 Counter-Strike $158,087 earned of ~$17 million over a course of 699 tournaments

Top Players

Rank Player Name Earning(1) 1 Saahil Arora $2,919,232 2 Hassan $2,712,139 3 Peter Dager $2,599,547 4 Clinton Loomis $2,486,995 5 Kurtis Ling $1,655,341

(1) As part of the current team Source: Evil Geniuses Website, Esportsearnings.com, Twitch Blog Major Teams and Players Newbee Overview Top Games

• Newbee is a Chinese eSports organization, which has a Dota 2 Rank Game Earning(1) division and had League of Legends and Hearthstone divisions in the past 1 Dota 2 $12,135,401 • Newbee won , taking $5 million in prize 2 Hearthstone $109,076 money, setting a Guinness World Records title for greatest prize 3 League of Legends $65,504 money in a video game competition at the time • It is the one of the largest esports team with a total prize money earned of ~$13 million over a course of 120 tournaments

Top Players

Rank Player Name Earning(1) 1 Zhang Pan $1,281,558 2 Chen Zhihao $1,171,755 3 Zhi Hu $839,884 4 Damien Chok $751,564 5 Song Chun $750,462

(1) As part of the current team Source: Esportsearnings.com, GosuGamers, Guinness World Records Major Teams and Players LGD Gaming Overview Top Games

• LGD Gaming is a professional eSports organization based in Rank Game Earning(1) China, with teams competing in Dota 2 and League of Legends. The team is named after the team's main sponsor, Guizhou 1 Dota 2 (China) $7,477,541 Laogandie Food 2 Dota 2 (LGD Forever Young) $2,921,371 • LGD's Dota team has reached The International for the last five 3 League of Legends $368,877 years. In 2018, LGD entered a partnership with French football club Saint-Germain 4 PUBG $79,179 • It is the one of the largest esports team with a total prize money 5 Dota $46,572 earned of ~$11 million over a course of 123 tournaments

Top Players

Rank Player Name Earning(1) 1 Lu Yao $1,281,558 2 Yao Zhengzheng $1,171,755 3 Liang Fa Ming $839,884 4 Lei Zengrong $751,564 5 Zhang Ning $750,462

(1) As part of the current team Source: PSG Esports, Esportsearnings.com Major Teams and Players Fnatic Overview Top Games

• Fnatic is a professional esports organization founded by Sam Rank Game Earning(1) and Anne Mathews in 2004, and headquartered in 1 CS:GO $3,398,663 • It is the one of the largest esports team with a total prize money earned of ~$11 million over a course of 731 tournaments 2 Dota 2 $2,805,422 • Fnatic players represent the team worldwide, attending more 3 League of Legends $1,266,038 than 75 international events per year across 20 different games 4 Counter-Strike $892,985 including League of Legends, Dota 2, Battlefield 4 and CS:GO • Fnatic's League of Legends team won the first ever League of 5 $862,559 Legends World Championship in 2011, and also holds the record for the most League of Legends Championship Series split titles in the EU LCS, totaling six of the nine played so far. In the 2015 EU LCS Summer Split they became the first LCS team to finish a Top Players split undefeated Rank Player Name Earning(1) 1 Robin Rönnquist $665,515 2 Jesper Wecksell $650,538 3 Freddy Johansson $637,330 4 Djardel Jicko Mampusti $480,516 5 Chong, Xin Khoo $462,746

(1) As part of the current team Source: Fnatic Website, Esportsearnings.com Transaction Overview Transaction Overview

Introduction

• In the recent years, funding for esports startups has exploded and sector has been receiving a significant amount of investment from outside investors • U.S. venture investment in professional competitive video gaming grew by 1,125% to $146.49 million across 34 deals in 2017, compared with $11.96 million over six deals in 2013

M&A Transactions

Announce Date Target Name Acquirer Name Deal Synopsis The transaction enhances ReKTGlobal Inc's service offerings. It also enables 's to expand it service 17-Jan-2018 Rogue Sports, Inc ReKTGlobal, Inc. from Las Vegas to aXiomatic acquired an undisclosed majority stake in Team Liquid, a portfolio company of Lightbank LLC, 22-Sep-2016 Team Liquid aXiomatic for an undisclosed amount. The acquisition enhances both the companies to increase its capabilities Venture Investments into US-based Esports Startup $160 40 35 146 $140 35 28 34 $120 30 $100 25 $80 20 $60 12 15 58 $40 6 48 50 10 $20 5 12 - 0 In millions 2013 2014 2015 2016 2017

Source: Deloitte - Crunchbase, Factset Total Amount Invested Number of Deals Transaction Overview Private Equity Investments Announce Date Target Name Investor Name Deal Size (in $mn) 30-Apr-2018 The Ledger Group 1.5 22-Feb-2018 Vision Esports Multiple Investor (7) (1) 38.0 12-Feb-2018 Team SoloMid Bessemer Venture Partners 25.0 01-Jan-2018 Gen.G Undisclosed Investor 30.0 20-Oct-2017 Multiple Investors (20) (2) 25.0 28-Sep-2017 NRG eSports Multiple Investors (8) (3) 15.0 21-Aug-2017 Team EnVyUs Hersh Interactive Group 35.0 16-Aug-2017 Team Dignitas Undisclosed Investors 0.7 23-May-2017 LGD Gaming N5Capital 4.4 10-Apr-2017 Fnatic Hannes Wallin, Hersh Interactive Group, Joichi Ito, Raptor Group 7.0 Allen Debevoise, Crosscut Ventures, Intercap, LionsGate Entertainment, 10-Jan-2017 Immortals NA Steve Kaplan 23-Nov-2016 Cloud9 Alexis Ohanian, Bill Lee, Brian Singerman, FunPlus, Richard Thompson 2.9 26-Sep-2016 Team Dignitas NextEquity Partners NA 17-Jun-2016 Raging Turtles League of Legends - PMU Challenge NA 01-Jun-2016 Team EnVyUs SierraMaya360 NA 17-Mar-2016 NRG eSports Alex Rodriguez, Jimmy Rollins, Shaquille O'Neal NA 01-Jan-2016 Sunstone Technology Ventures, Tommy Ahlers NA 01-Jan-2016 Nyx Ventures 0.6

(1) Evolution Media, Fisher Capital Investments, New York Yankees, Seth Bernstein Capital Management, Shamrock Holdings, St. Louis Cardinals, The Durant Company (2) Alexis Ohanian, Andrew Bogut, Bill Lee, Brian Singerman, Chamath Palihapitiya, David Sacks, Eldridge Industries, Founders Fund, FunPlus, Hunter Pence, Joseph Montana, Josh Yguado, Kimbal Musk, Michael Ovitz, Min Kim, Richard Thompson, Rob Pardo, Todd Boehly, UTA Ventures, World Wrestling Entertainment (3) Alex Rodriguez, Anthony Noto, Jennifer Lopez, Kevin Nagle, Marlon Byrd, Marshawn Lynch, Michael Strahan, The Players' Impact Source: Pitchbook Media Coverage and Rights Media Coverage and Rights Media Rights Deals • Esports streaming is one of the main revenue sources for the industry with money coming from different streaming platforms Media Rights • Media Rights are needed to show esports content on a channel. This includes broadcasting content, foreign broadcasting rights to show content in their country, or copyrights of an esports competition

• Different media platforms such as Twitch and YouTube are present which provide gamers and players to stream their content online for their fan base. The streamers earn on the basis of their views and Media Platforms subscription services available on the streaming platform • Twitch, one of the largest streaming platforms in the industry, provides gamers a platform to showcase their gameplay and also provides some of its partners to accept subscriptions

• Recently, there has been a growth of exclusive rights deal in the Esports industry with franchises and game publishers signing up with different media houses to exclusively stream and showcase their Exclusive Rights Deal content on the platform. For example, BAMtech and RIOT games entered into a $300 million exclusive licensing deal in 2016

• In June 2016, Sky Sports partnered up with Ginx TV to create the UK’s first 24-hour, dedicated eSports television channel. The channel was officially launched on June 23 in the Sky electronic program Other Deals in the Industry • In January 2018, Overwatch League and Twitch announced a media-rights partnership, ensuring that every match of the global city-based esports league will be streamed on Twitch

Source: Cision, BusinessWire, TwitchMetrics Media Coverage and Rights Media Coverage • Esports industry has seen a sudden increase in the media attention received to the players and the organizations Esports in Media • However, there are still no statutes in place which require players to give interviews to journalists after an event like NFL which penalizes its players if they do not provide interviews

• Reuters announced in February 2018, the launch of a new wire service devoted to coverage of esports. The Reuters Esports Wire features global coverage of the competitive gaming industry Major Media Houses • In 2016, ESPN rolled out its esports website which focused entirely on comprehensive coverage surrounding the world of competitive gaming. ESPN won the Coverage Website of the Year at the Esports Industry Awards 2017

• In 2014, the first large match fixing scandal in the Counter Strike Global Offensive community took place, where team iBuyPower purposefully lost a match against NetCodeGuides.com. The team was later Key Events Covered by banned by Valve, though ESL unbanned the team from their tournaments in 2017 Media • In August 2017, an AI robot from Elon Musk’s startup defeated one of the world’s best Dota 2 players Danylo “Dendi” Ishutin

Source: Cision, Kotaku, GreenManGaming, Redbull, TheVerge