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08/17/23: Saudi investment fund Savvy Games Group was the party behind a $2 billion deal with Embracer Group that crumbled earlier this year


 

Medias First Morning Read
Thursday August 17, 2023

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

Saudi investment fund Savvy Games Group was the party behind a $2 billion deal with Embracer Group that crumbled earlier this year, according to a report from Axios. Savvy, which has made significant investments in the gaming space as the country continues to grow its footprint in the market and shift perceptions of Saudi Arabia, was set to take a stake in Embracer, an acquisition-focused company in its own right, in spring of this year.

However, the deal fell apart unexpectedly, sending Embracer Group — a Swedish company that owns the Lord of the Rings and Tomb Raider video game adaptation rights along with game developers Crystal Dynamics, THQ Nordic, Eidos-Montreal and more — into a period of layoffs and studio shutdowns.

Savvy first announced plans to invest $38 billion in the esports and video game space in early 2022, and it already has an 8% stake in Embracer Group as well as mobile publisher Scopely, esports conglomerate ESL FACEIT Group, with the Saudi Public Investment Fund also investing in Activision-Blizzard, Capcom, EA, Nintendo, Take-Two Interactive and more.

Axios did not report on the rationale behind Savvy’s last-minute decision to back out of the deal. However, it’s already had severe repercussions for Embracer Group, which trimmed its forecasted earnings for 2023 from by around $300 million following the announcement that a deal with a then-unnamed entity fell through. The news might make companies more skittish of Savvy investment, particularly given the public perception that the PIF undertook the Savvy Games Group initiative as a form of sports-washing to help Saudi Arabia draw attention away from the country’s history of human rights violations against women and LGBTQ+ persons.

GET INVOLVED IN TEMPEST

Looking to get involved in this year’s Tempest Esports & Gaming awards? We’re looking for professionals in the esports and gaming industry to join our judge’s panel. Email Carley Ashley by August 9th with a short blurb on why you would be a great judge. Know a company that deserves to be recognized? Submit your entry by visiting our website.

COMPETITION AND GAMING NEWS

Team Vitality is your Rocket League World Champions following a sweep of Team BDS on Sunday in Düsseldorf, Germany. This is Vitality’s second Rocket League Championship Series world title, with the French organization also hoisting the trophy in 2019. Vitality took home $600,000 of the event’s $2.1 million prize pool, with Team Liquid and Karmine Corp rounding out the top four.

Baldur’s Gate 3 is now the best-reviewed PC game of all time on Metacritic after passing Disco Elysium for the honor. Beyond its stellar score of 97 out of 100 across hundreds of reviews, the role-playing title has also hit the top-10 in all-time concurrent players. The title’s success has made it a midyear favorite for Game of the Year despite an absolutely packed field of smash hits in 2023.

Luminosity Gaming won the Pokemon UNITE World Championship this weekend to earn the organization’s first-ever world title. Former world champions Odd Man Out finished as runners-up at the event in Yokohama, Japan, which also hosted the Pokémon Video Game Championship Series finale (Winner: Shohei Kimura of Japan), Pokémon Trading Card Game worlds, and the Pokémon GO World Championship.

Mobile game developer Zynga is launching its first blockchain game, Sugartown, a web3 title built on the Ethereum network. The game will include digital assets known as Oras, which, according to VentureBeat, will be able to be minted as NFTs later this year. Zynga is working with Forte, a blockchain game platform, to ensure regulatory compliance and that in-game assets are transferable between any future titles.

SPONSORSHIP & ACTIVATION

Games journalists Jacob Wolf and Mikail Klimentov are launching a new media venture, as first reported by Digiday, and bringing their newsletters and Wolf’s podcast product, Visionaries, to crowdfunding platform Patreon. Wolf, known for his work at ESPN and Dot Esports, and Klimentov, an editor on the now-defunct Washington Post Launcher games vertical, will use the platform shift as a way to merge their communities and test the waters for a potential new vertical of their own. Wolf will join us at the Esports & Gaming Business Summit from Oct. 22-24 to discuss the next step in his career as well as the state of esports and games media. Register to attend EBS here.

A skin based off of Halo’s Master Chief is reportedly coming to Rainbow Six: Siege in the latest collaboration between the Xbox property and another game title. Master Chief has previously dropped into Fortnite, and the franchise has made cosmetic appearances in Brawlhalla, Among Us, Gears of War and other titles. Master Chief’s guest spot in Ubisoft’s title will reportedly come as a skin for the operator Sledge.

Esports organization Dignitas has partnered with noblechairs to make the furniture company its official gaming chair. The deal will see Dignitas branding land on noblechairs products, including a co-branded chair, headrest cushions and more.

DoorDash is bringing back its Battle of the Brands to PAX West on Sept. 2 with an eight-hour event merging restaurant companies with Fortnite streamers and a grand final Sept. 3. Burger King, Del Taco, Jack in the Box, KFC, Little Caesars, McDonald’s, Popeyes and Taco Bell will each be represented by an individual streamer, which features a $25,000 prize pool. Online qualifiers for the PAX West event begin Friday. DoorDash is one of nine brands joining us at EBS for our Brand Camp track, which will feature best-in-class activations between endemic esports and gaming organizations and their non-endemic partners. Make sure to register for EBS here and join us in Las Vegas from Oct. 22-24.

STREAMHATCHET

How Street Fighter 6 and EVO Are Boosting Fighting Games Viewership

EVO, or Evolution Championships Series, has seen considerable growth over the years. First started in 1996 as a Street Fighter tournament, EVO has morphed into one of the biggest fighting games esports tournaments in the world.

This year’s EVO event saw a 106% growth in hours watched from 2022, and a 972% increase from 2017. The event also hit its highest-ever peak viewership of over 399K viewers. This peak is also the highest peak viewership for the entire fighting games genre across live-streaming platforms in 2023 as a whole.

Street Fighter 6’s June release plus hyped announcements for new games like Project L, Mortal Kombat 11, and Tekken 7 helped EVO’s growth, and show a promising future for fighting games in the industry.

Read more on Stream Hatchet’s blog.

2023 Esports & Gaming Business Summit

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YOUGOV LIVING DATA INSIGHTS

Examining the most popular gaming genres among current-gen console gamers

Leading the charge is the Action/Adventure genre, capturing 63% of PlayStation 5 users, 59% of Xbox Series X users, 53% of Series S users, and 56% of Nintendo Switch enthusiasts. Racing maintains a strong foothold with 42% engagement on PlayStation 5 and Xbox Series X, and 45% on Series S. First Person Shooters also make a mark, accounting for 40-42% across platforms. One of the interesting observations is that Series X gamers show a higher preference for action/adventure titles relative to Series S users (59% vs 53%). PlayStation 5 users take a comfortable lead in sports games (38% vs 34% of Series X; 33% of Series S; 19% of Switch gamers).

TEAMS

FaZe Clan lost $14.4 million in Q2 of 2023, the company announced in a letter to shareholders this week. With the company still adrift on the Nasdaq after hitting an all-time low of $0.30 per share at end of day on Aug. 11, the news of a decline of more than $7 million in revenue year-over-year is another blow to FaZe’s future, with companies such as GameSquare reportedly considering an acquisition of the beleaguered gaming lifestyle organization.

Speaking of GameSquare, the Complexity Gaming owner hit a record high in revenues in Q2, though it incurred a net loss of nearly $4.1 million for the period. The company drew $14.2 million in net revenue, more than doubling its results in Q2 2022, while also looking to become a leaner organization. CEO Justin Kenna said GameSquare aims for “at least $8 million of total annualized cost savings by the end of the year” to firm up the organization’s position.

Former FlyQuest RED coach Viktor “flashie” Tamás Bea has signed with Natus Vincere as an analyst, Na’Vi announced Tuesday, bringing the longtime women’s team coach into the fold of one of the most recognized Counter-Strike: Global Offensive organizations in the world. Flashie had coached FlyQuest RED for two years prior to this week’s transition, including the team’s tenure with Counter Logic Gaming as CLG Red.

Counter-Strike legend Robin “flusha” Rönnquist is retiring following a 14-year career in the esport. The 30-year-old, who most recently played for EYEBALLERS, is a three-time Counter-Strike: Global Offensive major winner. He is best-known for his time with Fnatic, where he won Intel Extreme Masters World Championships in 2016 and 2018.

INDUSTRY

Netflix has launched its cloud gaming service in early beta in Canada and the U.K. Games will be available on Netflix TVs to “a small number of members,” Netflix VP of Games Mike Verdu said in a statement, with support coming to PCs and Macs in the coming weeks in both countries. “This limited beta is meant to test our game streaming technology and controller, and to improve the member experience over time,” Verdu said. “ … While we’re still very early in our games journey, we’re excited to bring joy to members with games. We look forward to hearing feedback from our beta testers and sharing more as we continue on the road ahead.”

Former Ubisoft esports director Wei Yue has joined Amazon Games to head up its competition and esports initiatives. Yue, who spearheaded Rainbow Six: Siege esports for four years, is joining Amazon as it presumably prepares to dive into the competitive space. “I am more than excited to have this unique opportunity to engrain the competitive vision and its esports features directly into the DNA of a game that is still in early development,” Yue said in a statement on X.

The Pokémon Company International is donating $200,000 to disaster relief in Hawaii as the islands continue to deal with the fallout of wildfires that have ravaged the area. The donation came along with The Pokémon Company International’s announcement that it will host its world championship events in Honolulu in 2024.

Newzoo veteran Emma McDonald has been promoted to COO of the gaming data and analytics company. McDonald, the former director of marketing for Newzoo, has been with the company for nearly 11 years, beginning as a junior data analyst in October 2012. Former COO and Newzoo co-founder Thijs Hagoort will move to an advisory role with the company.

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The storied Armored Core franchise is getting a new release at the end of this month! What is the official title of the upcoming game? (Email [email protected] with your answer, and be sure to include your name, company and city).

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Who did the USA lose to in the Women’s World Cup, marking the earliest the U.S. has ever been eliminated from the event? Answer: Sweden. Kudos: Creed Heilskov | ImOn Communications, Cedar Rapids; Benjamin (B.J.) Robinson | D50 Media, Chestnut Hill, Massachusetts; Jim Himmel | TCB Media, San Clemente, California; Michael Goodman | Radio One Atlanta; Daniel Hauptman, Denver; Jonathan Ruffin | NCS4, Hattiesburg, Mississippi; Gabe Acosta | Pixability, New York City; Lorrie Shilling, El Segundo, California; Phyllis McQuillan | MSG Networks, New York; Tom Moore | Kalt Productions, Los Angeles; David Westberg | SAG•AFTRA Federal Credit Union, Burbank, California

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