The esports surge — and the massive opportunities behind it

31 million people watch esports tournaments in the U.S., and more than double that, 68M, in China. And the question is — how do you monetize that at scale? Don’t miss this VB Live event for keen insights on how U.S. companies can effectively operate globally or begin to expand globally.

Here’s the big esports question: Is there anybody who’s really interested in watching other people play a game as opposed to playing a game themselves? With more than 150 million people a month on Twitch, there really is no question.

Esports, which racked up 300 million viewers worldwide last year, is on track to surpass a billion dollars for the first time this year, across all markets, and not just from indirect revenue sources, like advertising and sponsorship. Merchandise sales, ticket sales, and other items that consumers purchase directly make up about a quarter of that income.

“Blizzard can sell out tickets for its esports tournaments at BlizzCon — these are tickets that go for about $200 a pop, and they sell 25,000 seats in about six seconds,” says Dean Takahashi, lead writer for GamesBeat. “That’s pretty amazing.”

What’s behind the surge? For one, internet infrastructure and bandwidth making live streaming much more viable — and with streaming, you get a much more micro-targeted audience, says Carter Rogers, senior analyst at SuperData Research. Ratings you might sniff at in the TV world are still very viable for esports ecosystems, because the super devoted fans watching on Twitch or YouTube are devoting their time and money to it, making a bigger ecosystem possible.

Games are also getting more fun to watch, Takahashi suggests, with titles like League of Legends, Arena of Valor, Overwatch, Fortnite, and PUBG, and the releases just keep on coming. The esports trend started in the Asian market, almost ten years ahead of the rest of the world, when StarCraft was a thing.

And in China, it’s even getting much closer to a truly mainstream activity, Rogers adds.

“We see games like Honor of Kings or Arena of Valor, which we might think of as very male-focused in the west, with very even gender ratios in their players,” he says. “It’s an activity that reaches across male and female audiences and reaches across age groups.”

However, game tournaments aren’t even the most popular form of gaming video content, despite the big draw. Audiences are stacking up for walkthroughs, game strategy videos, and game trailers.

But no matter what they’re watching, these viewers are extremely engaged, he adds.

“They watch for long periods of time, and they watch live because they want to do things like interact with other fans,” Rogers says. “Esports and live streaming have really brought back live TV viewing, much like real-world sports.”

A big part of the surge is how connected this audience really is, says Johannes Waldstein, CEO of FanAI Inc., which works with esports teams like Cloud9, TSM, Liquid, Optic Gaming, and leagues like the Turner E-League.

“It’s having 90 million people messaging each other on Discord, being on Twitter, being on Twitch,” Waldstein says. “Unlike television, these are the platforms and the places where you have friendships with people you know in real life and with people you know only in the gaming or virtual world.”

Worldpay research estimates that there will be 25 billion connected devices by the year 2020, says Roc Harry, relationship director at Worldpay, and that full-powered mobile devices, which allow users the convenience of streaming anywhere, will continue to drop in cost.

And that’s where much of the opportunity in esports lies, especially in Asia, Rogers says.

“Mobile esports that we wouldn’t consider viable in the west are the norm in Asia,” he explains. “We’re seeing mobile games that have the potential to build a truly hardcore audience.”

Adds Waldstein: “Sponsorship is going to be one of the largest growth areas.”

What they’ve found is that the audience is not as homogenous as everyone assumes, with much more varied cultures, ethnicities, and socioeconomic backgrounds, than you would expect, he says. But it does skew toward the wealthy millennial: Somebody who can afford to go to one of these events, or play competitive games on a higher-end PC.

“You now have some of the big brands and agencies that are not traditionally in esports now suddenly realizing, ‘Wait a second, these audiences block my ads, they don’t watch traditional sports where my advertising budget is typically going, but they have an affinity for my product, they’re the right life stage, they have discretionary spend,'” he says. “This is a good place for me to find and engage with the right type of customer.'”

“Opportunities are breeding more opportunities and attracting more investment into esports now,” Takahashi adds. “I moderated a session a couple of weeks ago at the Milken global conference where there were about 4,000 investors.”

They were all very interested to learn that there are companies like Lionsgate and venture capitalists like Crosscut Ventures investing in teams like the Immortals, he says. Kent Wakeford and Kevin Chou, the former leaders of Kabam, are investing in the company behind the Seoul Dynasty Overwatch team. Tencent, Activision Blizzard, Robert Kraft of the New England Patriots, the owners of the Sacramento Kings, the owners of the New York Mets, the Philadelphia 76ers, and a lot of other traditional sports companies are coming in. Even venue companies like AEG, which owns the Staples Center, are investing in this market.

“It’s those layers of investment that are building up across the whole ecosystem, from the amateur level all the way up to this professional, championship level,” Takahashi says. “That’s what’s really generating a lot of this excitement. It’s breeding more opportunity.”

Here's Why the Top CRISPR Stocks Rose as Much as 47.1% in May

Shares of gene editing leaders Editas Medicine, Intellia Therapeutics, and CRISPR Therapeutics had an amazing month.

Maxx Chatsko

Jun 8, 2018 at 4:05PM


What happened

It was a great month for shareholders holding any piece of the fledgling field of CRISPR gene editing technologies. Shares of Editas Medicine (NASDAQ:EDIT) rose over 22%, Intellia Therapeutics (NASDAQ:NTLA) gained 33.4%, and CRISPR Therapeutics (NASDAQ:CRSP)jumped an impressive 47.1%, according to data provided by S&P Global Market Intelligence.

What moved these CRISPR stocks higher? Last month all three companies announced first-quarter 2018 financial results and provided updates on their respective drug development efforts. Broadly speaking, investors are excited about the coming initiation of clinical trials -- which will be the first ever for CRISPR drug candidates in the United States -- and are racing to own a piece of the action ahead of expected catalysts. However, there are company-specific factors investors should know.

So what

Since all CRISPR stocks represent development-stage biopharmas, the updates provided during quarterly earnings releases aren't very important from a financial perspective -- with the possible exception of cash balances. Rather, quarterly updates are times for gene-editing companies to announce pipeline and collaboration updates.

With that in mind, Editas Medicine announced that it ended March with $359 million in cash and cash equivalents. The company is barreling toward filing an investigational new drug (IND) application in mid-2018 for its lead drug candidate, EDIT-101, to be evaluated as a possible treatment for Leber's Congenital Amaurosis type 10 (LCA10), an eye disease that impairs vision.

In fact, Editas Medicine presented data later in May on EDIT-101 showing it was well-tolerated in nonhuman primates (which may be the golden standard for getting the first CRISPR drugs into clinical trials), using the same procedure the company plans to use in a phase 1/2 trial in humans. There was also news of an expanded collaboration with Celgene in oncology applications, and more preclinical data was generated for potential treatments in eye and blood diseases.

Intellia Therapeutics announced that it ended March with $328 million in cash and cash equivalents. It was the first full quarter with new CEO Dr. John Leonard at the helm; he was appointed to broaden the clinical strategy, and ensure the company didn't fall behind its peers. The CRISPR pioneer plans to submit an IND for its lead drug candidate, a potential treatment for the rare metabolic disease transthyretin amyloidosis, by the end of 2019.

While that may seem far off, more time is needed to generate data on a novel lipid nanoparticle delivery system (one of the most important parts of a gene-editing therapeutic) and possible dosing regimens. Since there's no blueprint to follow for CRISPR gene-editing therapeutics, it may prove best to walk slowly to avoid costly missteps in the clinic. Additionally, two other rare hereditary diseases showed further progress in preclinical studies, while Intellia Therapeutics also announced its first target for edited immune cells for cell-therapy applications.

Last but not least, CRISPR Therapeutics announced that it ended March with $342 million in cash and cash equivalents. The company expects to begin clinical trials to evaluate its lead drug candidate, CTX001, as a potential treatment for blood disorders such as sickle-cell disease in 2018. Or, it did, but the drug was put on a clinical hold by the U.S. Food and Drug Administration.

There's an argument to be made that the recent slide creates a buying opportunity, especially considering that the "clinical hold" was put in place for an asset that's not even in the clinic yet; nonetheless, CRISPR Therapeutics will look to clear that up. It also expects to file an IND for its second therapeutic asset, CTX101, by the end of 2018; the drug candidate is a CRISPR-edited CAR-T therapeutic designed to target specific markers of B-cell cancers.

Now what

CRISPR stocks were a hot commodity last month, which isn't surprising given all the hype and promise surrounding gene editing. There were also several major clinical conferences for oncology and gene therapy, which helped to keep the pioneering efforts of these companies at the forefront of the market's awareness. So although there's a long way to go before any of these approaches yields a commercial product, investors can expect a volatile -- and perhaps lucrative -- journey through the stock market to continue.

6 Internet of Things Facts to Make Investors Sit Up and Take Notice

The IoT could help reduce vehicle crashes in the U.S. by an estimated 600,000 each year, for starters.

Chris Neiger

Jun 9, 2018 at 1:00PM

The Internet of Things (or IoT) links formerly isolated objects -- think thermostats, cars, refrigerators, etc. -- to the Internet. All that connectivity allows devices to communicate with each other, provides us with vast amounts of previously inaccessible data, and does handy things like, for example, warn businesses when equipment is about to break down.

The IoT has been around for years, but the recent proliferation of low-cost sensors has made it easier and more affordable to bring all sorts of new things online. Here are a few facts that show how big this tech trend really is, and why investors should be paying attention.


1. You can measure the IoT's worth in the trillions of dollars.

By 2025, the global worth of IoT devices, revenues, and cost-savings is expected to reach $6.2 trillion. The healthcare industry is forecast to account for the largest fraction of that at $2.5 trillion, with manufacturing close behind at $2.3 trillion.

2. Two years from now, there will be over 200 billion connected devices.

According to Intel (NASDAQ: INTC), there were 15 billion connected IoT devices in 2015, but the chipmaker calculates that number will jump to more than 200 billion by 2020.

3. Consumer IoT devices are surging.

Apple (NASDAQ: AAPL) became the world's top maker of wearable tech just a few quarters ago, when it outpaced Fitbit (NYSE: FIT) for the first time. Apple Watch sales are still a small portion of its total revenues (the company doesn't break out Watch sales in its reports), but the growth rate of the consumer IoT device market indicates that there's still plenty of room for Apple to expand its wearable business.

4. Vehicle-to-vehicle communication could cut the number of crashes in the U.S. by 600,000 a year.

Driverless cars get all of the attention these days, but allowing vehicles to talk to each other -- conveying everything from accident warnings to data about traffic conditions -- could prevent more than a half-million crashes in the U.S. every single year, according to the National Highway Transportation Safety Administration (NHTSA). 

General Motors is currently the only automaker in the U.S. that sells vehicles equipped with this technology, but Toyota has plans to bring shortwave vehicle-to-vehicle (V2V) communications to its U.S. offerings in 2021. 

It's also worth pointing out that tools to track industrial vehicles are already a growing part of the IoT. CalAmp (NASDAQ: CAMP) is a leader in the machine-to-machine (M2M) market. Its hardware and cloud-based software allow industrial equipment giant Caterpillar to track some of its construction vehicle fleets.

5. China may be leading the IoT already.

A recent Accenture study asserted that China's openness to the IoT, and its current investments in the technology, could add $196 billion to its manufacturing sector over the next 15 years. But Chinese tech companies are making big moves in the IoT space as well. E-commerce giant Alibaba (NYSE: BABA) just bought a large chipmaker -- Hangzhou C-SKY Microsystems -- to advance its cloud-based business.   

Research firm IDC says China will outspend the U.S. in the IoT market this year, $209 billion to $194 billion.

6. The Internet of Things is improving farming.

Sensors embedded in the ground are providing some farmers with data that helps them provide more water, pesticides or fertilizer specifically to those crops that need them. AT&T (NYSE: T)recently partnered with a company called WaterBit, which makes solar-powered sensors to monitor soil moisture. When the sensors detect a specific part of a field needs more water, they signal an automated irrigation system that supplies it only to that section. As a Scientific American article noted last year, this type of "precision farming" not only conserves water, but can help boost crop yields as well. 

Remember this

The Internet of Things is transforming many industries, and there are still plenty of ways for investors to capitalize on its growth. Some tech companies, like Intel, break out their IoT-related revenues, but many don't. For example, Apple is clearly benefiting from its leadership position in the wearable tech space, but it still wraps up its smartwatch sales figures in its broad "other products" segment (which includes Apple TV, Beats, and HomePod, among other things). 

Investors who are looking to profit from the IoT's potential should consider whether they want to buy stock in large companies that have minor exposure to the IoT, or small-cap business making bigger bets on it (or both). The former will offer more stability, but the latter could deliver more significant share price gains as the IoT expands.


Why Now is the Time to Explore Cannabis Investing

Why Now is the Time to Explore Cannabis Investing

The long-sought normalization of marijuana laws is becoming a reality among an increasing number of states, spawning a huge multi-billion-dollar industry that's attracting a "green rush" of entrepreneurs, venture capitalists and individual investors.”

With the launch of its first cannabis-centered venture capital fund, First Capital Ventures has an insider’s look at the state of the industry and what’s in store for the future. Keep reading to find out more about the state of cannabis investing today. 

Assessing the Marijuana Investment Climate: Q&A With First Capital Venture’s Erin Turoff

Assessing the Marijuana Investment Climate: Q&A With First Capital Venture’s Erin Turoff

First Capital Ventures COO and Managing Director Erin Turoff sat down with Marijuana Business Daily to discuss why now is the time to get into marijuana investing. 

The seasoned asset management professional – she co-founded Stamford, CT-based hedge fund Red Ivy Capital – is convinced cannabis is the investment world’s next big thing. Read more about Turoff’s predictions about the industry.