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01/25/24: The Palworld Problem; Riot lays off 530 staff; 100 Thieves sells drink company


Medias First Morning Read
 

Thursday January 25, 2024

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

Developer Riot Games has laid off 530 workers, or 11% of its staff, in an effort to refocus on its core business after nearly doubling its employee base since 2019. The move, mirrored by dozens of layoffs from high-profile companies both last year and early in 2024, follows the ongoing trend of companies resizing following swells in the popularity of, and consumer investment in, games during the COVID-19 pandemic.

“Some of the significant investments we’ve made aren’t paying off the way we expected them to,” Riot CEO Dylan Jadeja, who took on the role in September 2023, said in a statement. “Our costs have grown to the point where they’re unsustainable, and we’ve left ourselves with no room for experimentation or failure – which is vital to a creative company like ours. All of this puts the core of our business at risk.”

Riot will shift away from some of its more ambitious projects, such as Riot Forge, which shepherded third-party games focused on Riot’s Runeterra universe. Riot’s core live games business, including League of Legends, VALORANT, Teamfight Tactics, and Wild Rift, will be the focal point moving forward. Some other products, such as fighting game Project L (which will be a live service title) are still in the works as well.

COMPETITION AND GAMING NEWS

Overwatch esports are back following the shuttering of the Overwatch League, with Blizzard Entertainment and ESL FACEIT Group forming the Overwatch Champions League, a new competitive ecosystem for Overwatch 2. Like most EFG-operated esports circuits, the OWCS will feature an open format, with a focus on regional competition leading into two major in-person tournaments at EFG’s DreamHack festivals later in the year. Competition will play out on EFG’s FACEIT platform across three regions: North America (which includes Latin America), Europe/Middle East/North Africa, and Asia.

Tensions between Ukraine and Russia continue to play out in esports as well, with the International Esports Federation suspending Russia’s membership following an investigation spurred by a complaint from the IESF Ukrainian delegation. The Russian Esports Federation, which had previously had membership suspended during the outset of the country’s war against Ukraine, had established offices inside occupied “Ukrainian territorial boundaries” following Russia’s gaining of that ground during military action. The move means that Russian players can still compete in IESF events, but not under their nation’s flag.

Publisher Hi-Rez Studios and developer Titan Forge Games are revitalizing SMITE, their multiplayer online battle arena title, with the upcoming launch of SMITE 2 and a reimagining of its esports ecosystem. The move comes at a time when most companies are either scaling back or looking to third parties to level up their esports arms, but the companies feel good about their bet: The 10th SMITE World Championships in mid-January, where SMITE 2 was initially announced, played to a sold-out crowd at Esports Stadium Arlington. SMITE 2 will include a massive engine update for the game as well as updates to its mechanics, with an expected release in late 2024.

Saudi Arabia’s Esports World Cup announced the tournament’s first title Tuesday and a multi-year deal to make MOONTON Games’ Mobile Legends: Bang Bang a staple of the competition for years to come. EWC, announced in October 2023, will bring one of the world’s most popular mobile games and most-watched esports titles to Riyadh, Saudi Arabia, this summer, with the biggest prize pool in MLBB history up for grabs at the event. MLBB’s Mid Season Cup will include a $3 million prize pool, and EWC will also play host to the largest-ever MLBB Women’s Invitational, with a $500,000 prize pool.

SPONSORSHIP & ACTIVATION

EA SPORTS FC and UEFA are expanding the eChampions League, an esports competition featuring FC Pro players representing Champions League soccer clubs. This year, participation will exclusively feature Champions League team representatives, marking a shift toward fully blending the traditional sports and esports components of the eCL. Competition will begin in May, with a ​​$280,000 prize pool and qualification for the inaugural $1 million FC Pro World Championship on the line.

Chipotle is expanding its footprint in the fighting game space and becoming a partner for the TEKKEN World Tour for 2024. The move coincides with the launch of TEKKEN 8, a marquee moment for the fighting game title similar to Capcom’s boom thanks to Street Fighter 6 in 2023. Chipotle sponsors Capcom’s esports events as well, and found noteworthy success as an advocate for the space – the brand has set an example for what non-endemic integration into esports should look like, as well as the benefits of it, in recent years. TEKKEN World Tour 2024 will also feature partners including Venum, Uniqlo, and Victrix by PDP.

Like many esports companies, 100 Thieves is realigning its vision to its core business, and those efforts have borne some fruit: The gaming lifestyle organization has sold its drink business, Juvee, to Sprecher Brewing, a Milwaukee-based soft drinks company. The move follows 100 Thieves’ announcement that it would spin out Juvee as well as its game development vertical in late 2023. It’s a win-win for Sprecher, which will take on its first energy drink line through the purchase, and the Juvee team, which is growing to a staff of 150 following the acquisition, according to former Juvee co-founder turned Sprecher CMO Sam Keene.

FaZe Clan has struck a multi-million dollar deal with Rollbit, a crypto casino and betting company, in a non-U.S. focused play. The big money in esports sponsorships continues to come from this sector, and with limited options in the marketplace, companies like Rollbit (which is currently not legally playable in nearly 30 countries including the U.S.), Thunderpick, and other betting and crypto sites are the only reliable outlet for major cash injections in exchange for jersey space or other tangibles. The partnership comes amid the acquisition of FaZe by GameSquare, which has verticals in content creation, esports through its Complexity Gaming squad, and multiple other industries.

2024 Top Women in Esports & Gaming

Coming soon…

The 2024 Top Women in Esports & Gaming recognizes the achievements by women who work and or/play in the esports and gaming space. Celebrate the advancements women have made in the industry across leadership, talent and more. Entries open in late March – are you ready to win?

VISIT THE E&G SITE

YOUGOV LIVING DATA INSIGHTS

Gaming live streams: Which platforms do American gamers use?

Three-fifths of American gamers – those who play for at least one hour each week on any device – indicate they watch gaming live streams, and YouTube Gaming is the most popular destination (32%). Twitch takes the second spot (27%) with over a quarter of gamers viewing live streams on the Amazon-owned platform. Facebook Gaming (21%) and Discord (16%) also command sizeable popularity.

STREAM HATCHET INSIGHTS

The “2024 Live-Streaming Esports & Social Trends Report” by GameSquare Holdings Inc. and Stream Hatchet offers vital insights into the rapidly evolving world of live-streaming and esports.

This comprehensive report covers key growing trends such as:
– The growing popularity of RPGs and action-adventure games
– How simulcasting is impacting live-streaming
– Esports viewership continues to grow
– The significance of creator-driven events and how they drive engagement
– The effectiveness of content creators in promoting unique experiences

The report also explores the synergy between performance marketing and influencer marketing, emphasizing the evolution of marketing strategies in this domain.

This essential resource is a must-read for understanding current trends and future directions in live-streaming and esports.

Stay ahead of the competition!

INDUSTRY

Newly released Palworld has become a study in what gamers want, and how much they care about wholly original concepts. Palworld became Steam’s most-played game this week, removing Counter-Strike 2’s stranglehold on that spot for the first time in months. The game includes elements of survival games like ARK: Survival Evolved and creature capturing franchises like Pokémon, and it has been panned by some critics for flying too close to copying those titles in multiple ways. Developer Pocket Pair, Inc. is known for riding the wave of the most popular titles of the day: Craftopia, launched in 2020, featured motifs and visual styles that mimicked Legend of Zelda: Breath of the Wild, for example. The commercial success of Palworld, however, suggests players will flock to the concepts that they resonate with – a dark Pokémon title for adults, or a light and animated ARK, depending on who you ask – regardless of if the IP looks a little similar. In fact, in this case, that probably helped Palworld’s cause: The repeated mentions of its proximity to Pokémon built brand awareness, drew mainstream coverage, and resulted in the first smash hit of 2024.

Layoffs in the gaming space are even more dire when you look at 2022, according to reporting from Gamefile’s Stephen Totilo on data from developer Farhan Noor. Around 10,500 people in the games industry were laid off in 2023 – a startling number, but one that’s not too far off what went on in 2022 to much less fanfare. According to Noor’s data, around 8,500 games jobs disappeared in 2022. The lack of reporting on 2022’s cuts, Noor said, is likely because the 2023 layoff spree “hits closer to home,” with many rounds coming in the U.S. rather than abroad. Either way, this is shaping up to be a three-year trend – and perhaps longer, as Noor is working on 2021 figures now to help get a gauge of where the industry really is on a global scale vs. an annual basis.

Maybe mark it as a five-year downturn: Senior leaders in the games industry expect 2024 and 2025 to be just as rough as last year, according to GamesIndustry.biz. After a year of tightening belts via layoffs, including multiple rounds at some major companies, it’s likely closures will be the theme of 2024, with investment still dried out and many businesses still adjusting after being caught unprepared to reach profitability.

2024 Cynopsis Sports Media Awards

Now welcoming to the batter’s box… Colin Cosell

This just in – Colin Cosell is set to host the 12th annual Cynopsis Sports Media Awards on April 11th at The Lighthouse, Pier 60 in NYC. Want to join in on the fun? Be in it to win it – enter today.

START MY ENTRY

TRIVIA
Iowa women’s basketball star Caitlin Clark is on her way to an NCAA scoring record and quickly becoming one of the best-known players, not just in collegiate, but in the women’s scene overall. As of this morning, how many points does she need to get to become the all-time leading scorer in NCAA women’s hoops history? (Email [email protected] with your answer, and be sure to include your name, company and city).Answer to Our Last Trivia Question
Pokemon Scarlet and Violet is getting an epilogue in early 2024 as well. When is that capstone to the DLC expansions scheduled to release? Answer: January 11. Kudos: Tom Moore | Kalt Productions, Los Angeles; David Westberg | SAG•AFTRA Federal Credit Union, Burbank, California

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