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Esport Trends During the Global Pandemic

The first half of 2020 provided a fascinating metamorphosis of society. As we all cocooned in our respective lockdown habitats, alternative forms of entertainment, socializing, and working anchored themselves in our daily routines. While many people, companies, and industries were caught off guard by the abrupt online transition, there were a select few that flourished as a result of the digital mass migration, such as Epic Games’ Fortnite. Fortnite partnered with popular rap/hip-hop artist Travis Scott to host their second in-game concert, which saw over 12 million live attendees. Scott had used the platform to release his new single while Fortnite took the opportunity to release event specific in-game items. We believe this is a step in the right direction for Fortnite’s platform expansion; as back in December, Epic Games CEO stated “Fortnite is a game. But please ask that question again in 12 months” in response to whether he felt Fortnite was a game or platform.

Figure 1 

Esport Trends During the Global Pandemic: Text
Esport Trends During the Global Pandemic: Image

 Epic Games was not the only game developer that saw outstanding growth during the pandemic. Riot Games unveiled the closed beta of their latest mega-title Valorant, a free to play, multiplayer first person shooter.The title was only released to a select few initially, as Riot Games opted to employ a closed beta testing phase prior to the full release of the game. 

First person shooters were notably popular during the pandemic, as shown in Figure 1. First person shooters accounted for 25% of the top PC games ranked by player share, over the last 6 months; the most of any genre. Call of Duty: Modern Warfare, which was released last October, completely revitalized their player base this March with the release of their free to play battle royale mode, Warzone. Tangential releases like this are a prime example of how developers are improving the longevity of their games.

Figure 2 

Esport Trends During the Global Pandemic: Text
Esport Trends During the Global Pandemic: Image

Week 1 beginning on December 31st, 2019 

Verizon recently reported that US domestic peak-hour video game usage was up 75% in the first week of quarantine – but tellingly gaming as a spectator sport is also through the roof. “With more stay-at-home mandates being issued around the world and the entertainment industry finding new ways to migrate their offerings to live streaming platforms, we expect to see these numbers rise,” says Doron Nir, the chief executive of StreamElements. Twitch and Youtube, two of the world’s biggest streaming platforms for gamers, are estimated to have grown their audience by up to a third in quarter one alone, as displayed in Figure 2. This comes in contrast to traditional sports viewership, as nearly all professional forms of competition were furloughed.

Sustainable Growth

Racing was one of the few sports able to adapt to the stay-at-home orders. We saw Formula One and NASCAR transition to virtual racing competitions, using in-home racing simulator setups (a technology we will be closely tracking). At their online peak, Formula One esports had 12 current Formula One drivers competing. The sport saw 30 million views across all platforms, and a 1000% month to month increase of streaming hours. 

One concern for the industry is a lack of sustainability bred through the inorganic growth caused by COVID-19. Formula One returned on Sunday, June 5th to brick and mortar operations, after 2 months of virtual races. We will be observing and reporting the change in audience dynamic. 

Figure 3

Esport Trends During the Global Pandemic: Text
Esport Trends During the Global Pandemic: Image

Week 1 beginning on December 31st, 2019 

The plateaus seen in Figures 2 and 3 are reflective of the stay-at-home orders being lifted and people resuming their pre-COVID lives, so it will be important to see if the higher numbers are sustained as COVID-19 (hopefully) becomes more contained. The gaming industry saw success and unprecedented popularity over the past few months, with the most important step forward being viewership numbers. A strong player base is not what is holding esports back from breaking into the mainstream, but rather a strong, monetized fanbase. It will be critical to the success of esports for the spectating and following of video games to become normalized. Fortunately, certain metrics like peak viewers trending seem to indicate sustained growth, as overall hours streamed and total hours watched are plateauing, overall peak viewers continue to rapidly increase, as shown in Figure 4. 

Figure 4

Esport Trends During the Global Pandemic: Text
Esport Trends During the Global Pandemic: Image

Bilibili ($BILI)

Bilibili is a multi-faceted entertainment company that focuses on high-quality, socially engaging content across their various consumer platforms. 

  • Pioneered “bullet chatting” a method of commenting at a specific moment of a given video, where the comment is then broadcasted across the screen in a scrolling fashion. This provides a more immersive user experience 

  • Last month, Bilibili saw 677 million visits to their website, with 86.83% being Chinese traffic. 19.06% of their traffic clicked through to their peripheral platform,

  • Overall global trends seem to indicate that Bilibili will continue top grow as alternative forms of entertainment as late adopters become exposed and better versed in current technologies. Exposure to new communication technologies driven by COVID-19

  • On April 9th, 2020 Sony acquired a 5% equity stake in Bilibili at an $8 billion valuation

We have held a long position on $BILI since early 2019 as a result of their explosive growth across various segments in their online engagement and retention rates. 


Copyright © 2020 Hyperion Group Inc, All rights reserved.

This newsletter is for informational purposes only. The newsletter does not constitute any actionable entity or provision of service. These statements are not investment advice. Hyperion Group does not claim ownership of any content provided. This newsletter is not investment advice.

Esport Trends During the Global Pandemic: Text
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