Jan 03, 2020 (Financial News Media via COMTEX) -- FN Media Group Presents Safehaven.com Market Commentary
New York, NY - January 3, 2020 – They're calling it "the streaming wars." A bitter fight over market share between media giants. First, there was Netflix. But now, there's Disney, AT&T, Comcast, Apple...the list goes on. Mentioned in today's commentary includes: Microsoft Corporation MSFT, -1.25%, Netflix, Inc. NFLX, -1.19%, The Walt Disney Company DIS, -1.15%, Apple Inc. AAPL, -0.97%, Take-Two Interactive Software, Inc. TTWO, +0.11%.
Companies are laying down big bucks to buy up chunks of the streaming market. Competition has gotten fierce. And that's where Torque Esports Corp. (GAME.V, MLLLD) comes in.
Torque is a little company disrupting a corner of the hottest new market in the streaming scene -- esports. Esports are video game sports tournaments that are attracting big audiences, with investors, advertisers, and the streaming giants paying attention. The four biggest esports events of 2018 generated 190.1 million viewing hours. The potential audience for esports in 2019 could be as high as 438 million people.
It's a sector that has only just begun to attract real attention – and Torque esports Corp. is taking advantage of esports' rise in a way that no other company has mastered yet...using the ability to cull data from across the industry for advertisers and sponsors.
Here are five things you may not know about Torque:
#1 The Streaming Wars Are Heating Up
All of the biggest names in media are duking it out on a new battlefield. From Netflix to Disney and Apple and beyond, there is a major war under way and the winner stands to reap the benefits of one of the hottest new markets on the planet.
Netflix (NFLX), of course, is the pioneer in this sector, and is ramping up original content as the battle for new and returning subscribers gets heavy. Though it has lost some key shows to its competitors, it is still hanging on, and is unlikely to go anywhere soon.
Disney (DIS), on the other hand, is betting big on its in-house content and content from its acquisitions, including its merger with Fox and its $4 billion purchase of LucasFilms which is already paying off thanks to the wild success of the Star Wars franchise, including the recently released Mandalorian series which has become an internet sensation through its depiction of a baby Yoda.
What is yet to be seen, however, is how Apple(AAPL) will contend with these behemoths. It too is looking to bank on original content, but unlike Netflix and Disney, the company is also juggling a tech empire which may even be leveraged to secure more subscriptions naturally. It also offers a more appealing subscription cost, coming in at $4.99 per month, as opposed to Disney's $6.99 and Netflix's $8.99 per month.
But Torque (GAME.V, MLLLD) is looking to capitalize on a niche that other majors are missing. Esports. A brand-new niche in a new sector. And it's already rivaling traditional sports.
#2 Esports: The New Kid on The Block
Ever heard of Fortnite? It's that game that your son, or nephew, or the kid next door plays for hours every day. And it's probably the biggest cultural sensation to sweep the globe since Pokemon. And people don't just love to play Fortnite: they love to watch it.
The streaming service Twitch broadcasts Fornite matches, and in October more than 7 million people tuned in to watch a "Black Hole" match. It's the Fortnite 2018 World Cup, the biggest event in esports. 40 million players competed to enter into the final competition, where prizes ranged from $50,000 to $3 million. The total prize pool was $30 million.
Fortnite is just one piece of the esports puzzle. This new and rising sports industry has the potential to top $1 billion in revenue by 2022. As an industry, video games have surpassed nearly every other form of entertainment. Revenue has tripled since 2000--rising from less than $50 billion to more than $120 billion per year. Estimates have the industry doubling again, to $300 billion by 2025.
It's literally bigger than Hollywood. And millions are tuning in to watch professional gamers duke it out for big prizes.
Even Microsoft(MSFT) is looking to get into the game with its acquisition of Mixer, another streaming service. In fact, eager to get new subscribers, Microsoft paid a rumored $100 million to get Fortnite superstar Tyler "Ninja" Blevins on its platform.
Comcast too has invested $50 million into a new esports arena, while Twitch signed a $90 million deal to broadcast the Overwatch World Cup, another international esports event. Across the board, traditional sports are down. And esports is still in its infancy.
But that just makes the timing better: companies like Torque (GAME.V, MLLLD) are positioning themselves strategically. And here's how they'll do it.
#3 How Torque is Winning
Torque Esports Corp. is a small company, with a number of very promising assets. They've got a video game developer, Eden Games, which specializes in racing simulators.
Then there's AllInSports, a company which Torque is set to acquire a majority stake that makes state-of-the-art racing simulators and which is partnered with Formula 1 and Ferrari. But the secret to Torque's success isn't games, or even racing...it's data. Right now, the Achilles' Heel for companies entering the esports market is a lack of good data. Specifically, user data--information tied to a specific individual's online habits, from shopping patterns to viewing habits to personal information.
Advertisers and brands want to sign on to esports events, but don't have good information to use in catering advertisements. Advertising and brand investment will make up the biggest chunk of revenue from esports. This year, esports is expected to bring in $906 million in revenue, and advertising for esports events was the centerpiece of Advertising Week, a gathering of thousands of advertising professionals. Companies are very, very interested in the esports demographics.
According to one market research firm, esports fans tend to be well-off, professionals with purchasing power, with high levels of enthusiasm.
They're drawn to the video game events out of strong interest, which means they're likely to not click away out of boredom--it also means they won't skip the ads, for fear of losing a moment of the esport excitement. The user data for esports attendees is priceless for advertisers.
But ad buyers are in a pickle. They can't get access to accurate data--the industry is in its infancy, and advertisers are having trouble finding the right metrics.
Companies that are joining the esports circuit haven't figured out how to satisfy advertisers' concerns. They've stalled at the starting line. But Torque Esports (GAME.V, MLLLD) has a secret: it's figured out the data problem, and developed a service that could make it the "Nielsen of Gaming."
#4 Torque's Secret
It's called StreamHatchet, and it's Torque's little secret. Here's how it works:
StreamHatchet is a data analytics service that focuses on gathering data sets on esports events, users, and economics, which it can then package in reports for clients. These reports highlight trends, point out opportunities...basically, they give interested companies a peak under the hood. But StreamHatchet is the leading service like this that exists for the esports industry.
Big companies are desperate for this data, which offers the secret to unlocking revenue streams attached to the entire esports market.
Understanding how players interact with the games helped developers create hits like Take-Two's (TTWO) Grand Theft Auto V, which clocks as the third highest selling video game of all time, generating over $6 billion in revenue.
#5 Scale Up
From StreamHatchet, Torque has the opportunity to ride the wave of esports and scale up. And it's attracting big attention.
So far, professional racers have come forward with endorsements, the company has expanded its YouTube channel, and made major presentations of its software and services at esports conferences. Right now, esports is a tiny piece of the video game landscape...but it's growing.
The four biggest esports events of 2018 generated 190.1 million viewing hours. The potential audience for esports in 2019 could be as high as 438 million people. And all those users generate huge amounts of precious data advertisers need to maximize customer potential.
The leading service catering to this need is StreamHatchet, owned by Torque Esports Corp. The company lies at the intersection: between the streaming wars, the rise of video games as an entertainment super-sector, the slow ascent of esports.
"This space is at the intersection of a $140 billion gaming industry and a $640 billion sports industry," according to CEO Darren Cox. And Cox is confident Torque (GAME.V, MLLLD) will be able to scale up quickly as demand grows and more companies sign on to esports events.
By. Meredith Taylor
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COMTEX_360153044/2608/2020-01-03T08:01:44
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