The eSports industry has captivated hundreds of millions of viewers worldwide through large tournaments in dazzling arenas. Predominantly, viewers mainly watch casual or competitive events through YouTube and Twitch. And the two platforms together collectively have a larger audience than HBO, Netflix and ESPN combined, according to Goldman Sachs. Primarily, most of the viewers are from Asia and 79% of worldwide viewers are under the age of 35 years. In 2017, viewers logged a total of 355 billion minutes on Twitch, representing a 22% growth year-over-year. At the time, companies mainly monetized eSports through sponsorships, but by 2022, Goldman Sachs projects that media rights will dominate the overall revenue stream for the industry. Media rights provide broadcast stations with the rights to stream pro league events. For instance, Activision signed a 2-year USD 90 Million agreement with Twitch to distribute its Overwatch League throughout North America. Moreover, League of Legends distributed its rights to ESPN+, Twitch, and YouTube. As a result, global eSports monetization is forecast to reach upwards of USD 2.96 Billion by 2022. Now, in combination with growing audience numbers and increasing monetization, organizations are able to hold large-scale tournaments that payout millions of dollars. Notably, Dota 2's The International tournament is a year-long tournament series that is expected to pay out over USD 30 Million in 2019. Similarly, Epic Games' Fortnite World Cup paid out USD 30 Million in prize winnings, however, unlike Dota 2, the tournament for each individual event only lasted a single day. Nevertheless, players had to compete in open online qualifiers in order to advance to the World Cup finals. Overall, just like any other media industry, the audience is key to the future growth of this market. And with the accelerating popularity of eSports, the industry is becoming a source of mainstream media for millions of people. According to data compiled by Goldman Sachs, the global eSports audience is expected to reach 276 million by 2022, increasing from 167 million in 2018. UMG Media Ltd. (TSX-V: ESPT), Activision Blizzard, Inc. (NASDAQ: ATVI), Advanced Micro Devices, Inc. (NASDAQ: AMD), Cisco Systems, Inc. (NASDAQ: CSCO), QUALCOMM Incorporated (NASDAQ: QCOM).
A major reason why people enjoy watching eSports is the social interaction between one another, said Serrento, an editor for the Asian Dota 2 League. Studies have proven that social interaction is a big factor when it comes to both traditional sports and eSports. Generally, eSport events are shown through livestreams on broadcasting stations and spectators are usually allowed to chat with and interact with one another from the comfort of their own homes. Overall, market research firm Newzoo expects that there will be more than 2.4 billion people playing games around the world by the end of 2019, meaning that the total addressable market is much larger than traditional sports, especially ones that primarily appeal to specific regions. In a survey conducted by Magid and Battlefy, 89% of eSports viewers said they would watch live events to get better at the game. Additionally, 83% say they enjoy watching events at a professional level because they actively play the game already. And while professional tournaments only attract several thousand people in-person, the online community is exponentially larger. "Although the audience for gaming content is predominantly found online, traditional television is also making a play for viewers. The appeal of reaching those massive online audiences has TV executives jumping out of their seats," said Andrew Paradise, Founder and Chief Executive Officer of mobile eSports company, Skillz. "Why? Games that began as two people huddled over the same vacuum tube screen, and then went global thanks to the rise of internet gaming, are now coming back to bring people together in person. People are consuming esports everywhere - together."
UMG Media Ltd. (TSX-V: ESPT) announced breaking news yesterday that, "it has entered into an agreement to acquire Activate Entertainment LLC ("Activate"). Activate is a creative management and production services company that specializes in esports events and activations.
-- In 2019, Activate has produced a number of major esports events, including the "Esports Experience" at the National Advertising Broadcaster (NAB) Show in Las Vegas, and the "Panasonic Esports Arena" at InfoComm in Orlando
-- Activate works with hospitality brands such as Marriott International and Caesars Entertainment on their esports initiatives
-- Activate helps corporate brands such as Panasonic and Roland develop points of entry into the esports industry
-- Activate has produced top-tier livestream productions for clients at major shows including E3, San Diego Comic Con, Dell Technologies World and The World Series of Poker
Activate has offices in both Las Vegas and Los Angeles and is led by Chris Iaquinta and Dirk Hagen, who have combined over 40 years experience in the event management and production industry, with a focus on turnkey, custom activations for a wide variety of entertainment industries, both gaming related and beyond.
'Bringing Activate into UMG will greatly expand the services and expertise of UMG in the esports event management side of the industry,' commented Dave Antony, CEO of UMG. 'Being able to add the experience of Chris and Dirk will be invaluable as UMG expands.'
Activate was responsible for the broadcast, production and execution of over three dozen live premium esports and video game activations in the last calendar year, bringing their nearly four decades of professional execution and delivery to bear. Activate also serves as the Director of Gaming and Esports for various entities, including NAB Show and the Metarama Gaming Festival.
'UMG represents the perfect structural partner that will allow our newly unified businesses to further raise the standard for esports livestreams and event productions', said Chris Iaquinta, President of Activate Entertainment. 'Together, our ability to provide professional results and deliverables to clients, partners and customers will be greatly amplified.'
In consideration for the acquisition of Activate (the "Transaction"), UMG will issue 2,333,333 Common Shares at a price of $0.30 per share. The shareholders of Activate have the ability to receive $3,000,000 in additional common shares ("Performance Shares") of UMG. The Performance Shares will be earned over the 18 month period following the closing of the transaction. The number of Performance Shares to be issued will be based directly on the gross revenue of Activate and will be issued at the 10 day weighted average price of UMG shares at the time of issue. The Transaction is subject to due diligence and regulatory approval, including the acceptance of the TSX Venture Exchange. The Transaction is an arm's length transaction.
Closing is expected to occur in the next 30 days.
About UMG: UMG Media Ltd. ("UMG") is a premier esports company in North America, offering live gaming entertainment events and online play. UMG provides online and live tournaments as well as the creation and distribution of original esports content. For more information about UMG visit www.umggaming.com.
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Activision Blizzard, Inc. (NASDAQ: ATVI), headquartered in Santa Monica, California, is the world's most successful standalone interactive entertainment company. Recently, Activision and Infinity Ward revealed the all-new Call of Duty(R): Modern Warfare(R) multiplayer universe to all gamers with a thrilling multiplayer premiere trailer. Scheduled for worldwide release on October 25, Call of Duty: Modern Warfare will bring first-person action fans, Call of Duty fans, and gamers from all walks of life together in the ultimate multiplayer playground. First details of Modern Warfare multiplayer will be unveiled by some of the world's most prolific streamers in an exclusive global livestream, where viewers will get their first look at the new online multiplayer, and will also have the opportunity to join the fun and get their own hands-on experience next month when the Modern Warfare Beta goes live for everyone. Awarded "Best Online Multiplayer" by Game Critics Best of E3 2019, Modern Warfare multiplayer delivers a thrilling and game-changing online experience with best-in-class down the barrel gameplay, along with an all-new level of strategic and tactical play. Players can jump into new play spaces that redefine Call of Duty multiplayer, from quick-action, close-quarters 2 vs. 2 experiences in Gunfight, traditional 6 vs. 6 multiplayer gameplay, modes that support 10 vs. 10 and 20 vs. 20 firefights, along with high-player count maps and combat, such as the all-new Ground War, an epic large-scale mode supporting more than 100 players. And, that's just the beginning for Modern Warfare fans. "Our goal with Modern Warfare is to bring all gamers together from day one to play together," said Patrick Kelly, Creative Director and co-Studio Head, Infinity Ward. "We're doing away with the season pass; we're delivering a mix of free maps, a ton of content following launch, and we're developing the game for crossplay. We're live-testing now, and fans will get to try for themselves next month in the Beta. This is a new day for Call of Duty multiplayer, and today is just the start -- we have many more exciting reveals coming for fans that we can't wait to share."
Advanced Micro Devices, Inc. (NASDAQ: AMD), for 50 years, has driven innovation in high-performance computing, graphics and visualization technologies -- the building blocks for gaming, immersive platforms and the datacenter. Recently, at the AMD "Next Horizon Gaming" livestream event at E3, President and Chief Executive Officer Dr. Lisa Su unveiled the company's next-generation PC gaming platform, bringing new levels of performance and efficiency and introducing powerful features for gamers everywhere, based on the new AMD Radeon(TM) RX 5700 Series graphics cards and 3rd Gen AMD Ryzen(TM) desktop processors. The AMD Radeon(TM) RX 5700 XT and RX 5700 graphics cards are built on the new AMD RDNA gaming architecture to deliver superior visual fidelity, lightning-fast performance and advanced features to power the latest AAA and eSports titles. The new product family also includes the 50th Anniversary Edition AMD Radeon(TM) RX 5700 XT graphics card that commemorates the company's 50th anniversary by offering increased clocks and a luxurious gold accented shroud featuring Dr. Lisa Su's signature. The 3rd Gen AMD Ryzen(TM) desktop processors deliver leadership performance across gaming, productivity and content creation applications, offering more performance-critical on-die cache than ever before. Today, Dr. Su previewed the latest addition to the product family - the 3rd Gen AMD Ryzen(TM) 9 3950X, the world's first 16-core mainstream desktop processor. "We've made significant technology bets to push the envelope on high-performance computing and give gamers the hardware they need to power the experiences they want," said Dr. Su. "Our industry-leading Ryzen 3000 Series desktop processors and Radeon RX 5700 Series graphics cards combine leadership design, performance, technology, and efficiency to provide the ultimate gaming experiences. From super-fast frame rates, to new levels of visual realism and image quality, or the ability to easily create, capture and share gaming experiences, PCs featuring our new Ryzen processors and Radeon GPUs offer exceptional performance and features for every gamer at every price point."
Cisco Systems, Inc. (NASDAQ: CSCO) is the worldwide technology leader that has been making the Internet work since 1984. BlizzCon, the annual two-day eSports extravaganza, recently took place this year in Anaheim, California--and brought together gaming enthusiasts and the eSports community alike. Here, superfans learned all about new characters and product launches, played games not yet released and watched live some of the biggest gaming tournaments of the year. Cisco brought its networking expertise to the convention, and provided the network to flawlessly power the event. Cisco's network provided the connectivity for the employees that complements the quick speeds attendees need onsite. With the Cisco network, gamers at BlizzCon improved their download time, and decreased things like lag and packet loss. Cisco routers and switches helped PCs run, wireless hotspots helped employees communicate during the hectic two days, and the servers ran the games. With the amount of online social sharing, game playing, and demonstrations of brand new content, the show could not go on without the network. In addition to bringing smooth and flawless connectivity to the machines and people at the event, equipment must be set up and taken down quickly. "BlizzCon is a critical event with die-hard Blizzard fans that requires a robust network infrastructure to support," said Systems Engineer Josh Dahl, "There are over 250 Catalyst switches, ASR 9000 border routers, 3800 Access Points, Nexus 9000 data center fabric, and Webex Teams coupled with API integration for collaboration. All of this was set up with automation within a two-week timeframe."
QUALCOMM Incorporated (NASDAQ: QCOM) invents breakthrough technologies that transform how the world computes, connects and communicates. Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated, recently unveiled the Qualcomm(R) Snapdragon(TM) 855 Plus Mobile Platform, a follow on to the flagship Snapdragon 855 launching with leading OEMs globally, built for speed to support enhanced performance and deliver leading experiences in multi-gigabit 5G, gaming, AI and XR. The platform features a boost in performance that will raise gaming to the next level for a truly Qualcomm(R) Snapdragon(TM) Elite Gaming experience--especially when gaming in the 5G arena. "Snapdragon 855 Plus will raise the bar for elite gamers with the increase in CPU and GPU performance and elevate experiences for 5G, gaming, AI and XR, which is something our OEM customers look to us to deliver," said Kedar Kondap, Vice President, Product Management, Qualcomm Technologies, Inc. "Snapdragon 855 Plus is our most advanced mobile platform to date and will build upon the success of the 2019 Android flagship Snapdragon 855 5G mobile platform."
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