Road to ICE 2024: The esports market’s three big players
As we all know, the esports market has undergone a meteoric rise since 2020. Since then the market has began to settle on three big players – Entain, Esports Entertainment Group and Rivalry.
As we’ll see from this article, Entain and Esports Entertainment Group have had mixed fortunes throughout 2023, while Rivalry has surged ahead.
Entain and Esports Entertainment Group
Starting with Entain and Unikrn, both had ambitious plans at the beginning of the 2023. Entain relaunched the brand in December 2022, with a target of global domination.
However, despite the launch happening to great fanfare, 12 months have passed since the relaunch and little has happened. So much so, that in a recent statement to iGB, Entain says that it will be scaling back direct-to-consumer operations with Unikrn.
The other big name at the start of 2023 is Esports Entertainment Group (EEG). However, following a turbulent year, Rivalry again has surged ahead.
Arguably, the company has been in trouble since May 2022, when it admitted “doubt” it could stay in business for another year. In October 2022, its future lay in the hands of a creditor after EEG defaulted on convertible notes issues in 2021.
EEG also announced the sale of its Bethard online casino and sportsbook business in February, with the sale totalling €9.5m.
Since then, with its net loss widening despite significant cost savings, we haven’t seen anything change just yet. Igelman remains upbeat however and we might just see a 2024 rebound.
Rivalry surges ahead
Onto Rivalry. Without a doubt this super-cool brand has definitely picked up the Entain and EEG slack and surged ahead. That’s certainly the opinion of Pinnacle, who were one of the main investors in its 2023 £5.9m financing round.
The Toronto-based operator has smashed every revenue expectation so far this year, while its unique positioning in the market makes it the esports brand for all the Gen Z and millennial users out there.
Catering to this audience is clearly bearing fruit – with 80% of its customer base claimed to be under 30.
By engaging its millennial and Gen Z audiences with its “down with the kids” approach, its campaigns have been crammed with internet-speak, memes and sought-after influencers.
Rivalry’s lack of profit: the last step to dominance
However, in its latest earnings report announced at the end of November, we can still see that the company is struggling to turn a profit. This, in our opinion will be key for it to stay ahead of the pack in the year ahead.
Looking more closely at its financials, we can see it remained at a net loss in Q3 despite posting record revenue of $8.7m (£6.9m/€7.9m), while comprehensive loss at the business also widened.
In what will no doubt be its biggest challenge in the year ahead, it wants to make the market its own.
Despite making record revenue, increased operating costs and foreign exchange loss offset the revenue hike in Q3. This meant comprehensive loss for the quarter widened to $6.0m, compared to $5.6m in 2022.
Reflecting on Q3, co-founder and CEO Steven Salz praised Rivalry for revenue growth amid a “challenging” capital markets environment. He said this will stand the business in good stead for further growth in Q4 and beyond.
Over to you to, Rivalry.