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06/08/23: Microsoft settles $20M FTC lawsuit; Twitch draws ire from streamers; Apple enters VR space

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Medias First Morning Read
Thursday June 8, 2023

Good morning! It’s Thursday and this is your early morning Esports and Gaming brief.
Streaming platform Twitch caused a dust-up Tuesday with the release of its new community guidelines, which restrict the use of burned-in video and audio ads as well as burned-in display ads.

Burned-in ads and display copy are a primary source of passive revenue for streamers. While unboxings, individual audio callouts and the display of products in the background of streams were allowed in the new guidelines, the lack of Twitch streamers’ version of programmatic revenue would be a crushing blow to both prominent creators and rising stars with just a sponsorship or two to their name.

Twitch walked back the announcement after backlash from creators. The Amazon-owned platform said in a statement on Twitter that its new branded content policy was “overly broad” and indicated it plans to adjust the language of the policy, though whether the plan or the wording is the problem is yet to be seen.

“We do not intend to limit streamers’ ability to enter into direct relationships with sponsors,” Twitch said, “and we understand that this is an important part of how streamers earn revenue.”

COMPETITION AND GAMING NEWS

ENCE won what might be the last big Counter-Strike: Global Offensive event by claiming the title at IEM Dallas this weekend. While CS:GO already had its last Major, an official title for the biggest events of the year highlighted by developer Valve, IEM Dallas might have been the last run for the decade-old title as Valve prepares to deploy Counter-Strike 2 this summer. It’s unclear when Valve is going to flip the switch, but there’s a month-long break in the CS:GO Tier 1 esports schedule that began with ENCE’s trophy lift at DreamHack Dallas on Sunday.

Apple’s newly unveiled VR headset will cost $3,499, with an early 2024 launch planned for the U.S. The eye-popping price tag for the Apple Vision Pro headset has lots to do with the new tech Apple is bringing to the table, from being able to make the headgear transparent to multi-window viewing and the ability to operate the Vision Pro without controllers (eye tracking, gestures and voice control will do the trick here). That said, the technological advances, however noteworthy, don’t do much to ease the pain point of the price for your average consumer.

The newly released Street Fighter VI spurred the series to more than 50 million lifetime sales, developer Capcom announced June 2, the day of the fighting game’s latest title launch. Street Fighter VI also quickly earned the record for most concurrent players in a fighting game on Steam. The title drew a peak of more than 70,000 concurrent players, more than doubling the second-highest total held by Mortal Kombat 11.

Diablo IV has become Blizzard’s fastest-selling game of all time, shockingly beating legacy powerhouses like World of Warcraft behind one of the best-reviewed Blizzard titles in recent years. The role-playing game is part of what’s become a slugfest between many highly anticipated releases this year, including the aforementioned Street Fighter, Nintendo’s Legend of Zelda: Tears of the Kingdom, Star Wars Jedi: Survivor, the Resident Evil 4 remake and, expected later this year, Bethesda’s Starfield and Square Enix’s Final Fantasy XVI. Expect more of this type of news as the year goes on and some hotly debated game of the year conversations as 2023 goes on.

SPONSORSHIP & ACTIVATION

Red Bull Gaming and Aimlabs have joined forces for a skills tournament that will bring a competitive flavor to the aim-testing software. Aimlabs and Red Bull will put on a multi-week competition known as Red Bull Ready Check, with a custom set of skill tests in Aimlabs and a leaderboard to track player scores and affiliated regional competitions. The aim-only showdowns will culminate in Dallas with the Red Bull Ready Check Championship, an event with a $50,000 prize pool that will feature the eight finalists as well as eight invited pros.

Esports organization Pittsburgh Knights has partnered with PNC Black to put on an internship program focused on increasing opportunities for women in esports. The Women in Esports initiative will offer two summer internships with Pittsburgh Knights. The inaugural internship recipients, Toh Jing Hua of Nanyang Technological University Singapore and Kelly Liu from Carnegie Mellon University, will work with organization on AI initiatives and content creation, respectively.

How will gamers perform under pressure? Arizona State University partnered with HyperX to try to predict just that, the companies announced May 31. The announcement follows previous findings from the adidas-ASU Center for Engagement Science that indicated machine learning programs could measure and predict dips in performance during onscreen activities based on rises and dips in attention. That same measure, HyperX and ASU said, was applied to competitive gaming, where long series and tournament fatigue play a role in performance that had yet to be explicitly measured. “We figured out that we can actually predict tilt about 15 to 20 minutes before it occurs,” Aurel Coza, director of the Center for Engagement Science, said in a statement. “Obviously for gamers it’s super important, but then you can extrapolate that to any high-performance task that involves prolonged attention.”

Esports betting platform Rivalry has launched its mobile app in Ontario, with League of Legends, Counter-Strike: Global Offensive, VALORANT and several mobile titles available for betting in the region. “Mobile betting is a significant addition for our Ontario operations and core audience of Millennial and Gen Z consumers that prefer the flexibility of betting on their phones,” Steven Salz, Rivalry co-founder and CEO, said in a statement. “Launching a mobile app adds an important layer of accessibility to our product, increasing our addressable market in Ontario, and allowing us to bring esports betting to more customers in the region and ultimately grow the category.”

STREAMHATCHET
PRIMAVERA SOUND GENERATES 407K HOURS WATCHED ON TWITCH

Barcelona’s Primavera Sound festival partnered with Amazon Music this year to broadcast a selection of the shows on Twitch. The three broadcasts generated over 400K hours watched across their 4 Twitch channels, and featured sets from popular artists like Caroline Polachek, The War on Drugs, Måneskin and many more.

The most watched performance on Amazon Music’s Twitch channel came from Depeche Mode who generated 44.7K hours watched during their set. The English dynamic duo is very well known internationally with 13.7M monthly listeners currently on Spotify.

Read more on our Blog

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TEAMS

FlyQuest has added both VALORANT Game Changers and ESL Impact rosters as the esports team looks to expand its program into women-only leagues. FlyQuest picked up the former Counter Logic Gaming Red rosters for both leagues. The newly dubbed FlyQuest Red revealed its new CS:GO sponsor the day before the ESL Impact Dallas Finals and made it to the semifinals of that event over the weekend. The VALORANT squad will make its debut during Game Changers North America Series 2, which begins with Open Qualifiers on July 13-16.

Content creator Jeremy “Disguised Toast” Wang’s VALORANT team, Disguised, has been relegated following a last-place finish in the VALORANT Challengers Play-In Relegation Tournament. The team’s 11-match losing streak continued with a 2-0 loss to MAD Lions that sent Disguised back into Open play, where the current roster’s future will certainly be in doubt. Wang shared last week that he expects a $1 million loss on his esports team this year, and an Open participant with no guarantee of re-qualifying for Challengers in 2024 likely isn’t worth that price tag.

Overwatch League teams have reached deals to eliminate remaining franchise entry fees, according to a report from the Sports Business Journal. OverActive Media, the parent company of the Toronto Defiant, was the first of the OWL teams to announce its fees had been waived in a deal with the league valued at $8 million. The OWL later confirmed to SBJ that it has reached similar deals with other partner teams as esports organizations continue to struggle financially and the league itself struggles to prove it can generate value for invested franchises.

Unsurprisingly, Call of Duty League teams are looking for similar relief, according to SBJ, with an even higher price point for those franchises when the CDL formed in January 2020. CDL franchise slots cost $25 million, according to reporting from ESPN at the time. The reporter behind that story, Jacob Wolf, reported in May 2022 that league operator Activision-Blizzard was owed around $400 million between the Overwatch League and Call of Duty League.

INDUSTRY

Former Riot Games Head of North American Esports Events Devin Murphy will join Mobile Global Esports as its director of strategic development, the company announced Tuesday. Murphy will assist MOGO, an Indian company, in development of its collegiate esports programming. “We are excited to be working with Devin to establish best practices in the Indian university esports field while providing the best opportunities and events for gamers and sponsors,” Mobile Global Esports CEO Dave Pross said in a statement. “His skill sets and experience are providing MOGO with a concrete path to establishing our tournament calendar and setting the stage for an upcoming summer series and Indian National Championship series.”

Gfinity plans to cut its esports operations and has sold 72.5% of its subsidiary, Athlos, following a net loss of $2.2 million in 2022. The U.K.-based company sold off that stake in Athlos to Tourbillon Group UK Limited for £1, according to an investor update from the company. “The market for esports remains soft and the directors see limited profitable growth opportunities,” the company said in the announcement. Gfinity plans to continue its general gaming content operations, with a focus on search engine optimization to increase user base and “deployment of AI automation tools to reduce the cost of specific items of content creation.”

Microsoft has reached a $20 million settlement with the U.S. Federal Trade Commission in a case alleging its Xbox Live service violated children’s privacy by collecting personal information. The settlement follows claims by the FTC that Microsoft failed to disclose to parents just how much information it got from children who used the platform, such as their real names, photos, video recordings and more. “Even when a user indicated that they were under 13, they were also asked, until late 2021, to provide additional personal information including a phone number and to agree to Microsoft’s service agreement and advertising policy,” the FTC said. “According to the complaint, from 2015-2020 Microsoft retained the data—sometimes for years—that it collected from children during the account creation process, even when a parent failed to complete the process.”

Blaseball developer The Game Band has laid off “many” of the staff behind the title and is shutting the game down. Blaseball surged in popularity following its release during the COVID-19 pandemic behind its quirky game design and community-focused approach. The title allowed players to bet in-game currency on outcomes of wild fantasy sports leagues, with players able to vote to add or adjust rules in the league week-to-week with the in-game currency they earned. Given its need for frequent adjustments, upkeep for Blaseball, The Game Band said, was costing the company too much.

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Answer to Our Last Trivia Question
Fighting game and role-playing game fans alike have hot releases to play this month with Street Fighter __ and Diablo __ coming out. Answer: VI and IV. Kudos: Tom Moore | Kalt Productions, Los Angeles; David Westberg | SAG•AFTRA Federal Credit Union, Burbank, California; Benjamin Robinson | D50 Media, Chestnut Hill, Massachusetts; Dominic Pasquarella | Mediassociates, Sandy Hook, Connecticut

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