Make no mistake about it, gaming is serious business. So much so that esports revenues are expected to reach over $1.6bn within the next two years. More immersive and competitive games than ever before has resulted in a surge in ‘gamers’ as well as audiences who flock to watch the very best in action out of interest and a desire to see how good the best really are.
Such an environment has many parallels with real-life sports. Teams need to be created and athletes need to be trained and conditioned to ultimately have a good chance of taking home a share of the sizeable and growing revenues associated with esports.
Step in Guild Esports (LON:GILD), who has become the fastest growing esports company across Europe, comparable to the likes of Manchester City or Paris Saint-Germain – securing big-deal sponsorships and developing best-in-class teams to go out there and win top prizes, albeit virtually!
As part of the ShareBuyers’ going for growth feature, here we speak to visionary CEO Kal Hourd on why Guild Esports is a worthwhile consideration for investors who seek access to this high growth industry with an industry leader.
Firstly, please can you tell us about Guild and its core value proposition?
Guild Esports is a global esports business headquartered in London and co-owned by David Beckham. Guild was listed on the London Stock Exchange in October 2020 and in less than a year, it has become the fastest growing esports organisation in Europe.
Guild’s ambition is to build a culture of excellence, not only within its teams of professional athletes, but also around its brand and digital presence. Celebrating and harnessing the diverse tribal loyalty of sports enthusiasts worldwide, Guild has established itself with teams competing in the most popular titles in esports, including: Fortnite, Rocket League, Valorant and FIFA, and has ambitious plans for continued growth. A network of content creators and creative partnerships has further established Guild’s presence within the esports community, giving Guild a “network audience” totalling over 16 million as of August 2021.
Core to Guild’s strategy of developing best-in-class esports teams is its establishment of a unique, U.K.-based talent pipeline for esports athletes, based on the traditional sports academy model. The company launched its online academy in May of this year and will roll out its physical academy by the end of 2021. Youth talent of all ages and abilities will be coached and mentored by industry leaders to enhance their skill sets, with the best-performing athletes coached for professional competition.
Last year was admittedly tough for many businesses – how did this impact you?
Even before Covid-19, the world of competitive esports was growing strongly and attracting significant viewer numbers. The pandemic accelerated already growing audience figures. According to NewZoo, in 2020, 435.9 million people globally watched esports events, 10 per cent more than 2019. As audience figures have grown, the appeal of esports from world-renowned brands has also increased, with esports revenues hitting $947 million in 2020. Guild has proven that the esports sector has continued to be a commercially attractive industry for brands having secured sponsorship and partnership agreements with best-in-class brands, including Subway, Samsung and Hyper X.
The main area of esports which has been impacted by the pandemic is in-person events and tournaments but Guild is anticipating that these will return in the autumn. However, like many other industries, competitions and tournaments have still been able to take place remotely and audience figures have only continued to grow in numbers. Despite this, Guild is looking forward to the return of events which will give pro-players the opportunity to meet and interact with Guild’s audience, further cementing the organisation’s rapidly growing fanbase.
Moving forward, economies look set to sustainably kick-start once more – how will this help Guild?
As lockdowns ease and events return, as mentioned it will give our players the opportunity to compete in tournaments at stadiums under the Guild banner in front of fans for the first time, capitalising on tribal loyalty. In-person events will also give our brand partners greater opportunities for brand visibility to Guild’s fanbase including the sought-after but hard to reach Gen Z and millennial audiences.
In addition, the reopening of economies will allow us to proceed with the next stage of our academy rollout which will include the opening of our physical academy site for our pro-players. The academy will take player development to the next level, providing professional coaching, in-person training and holistic development, all under one roof.
Growth catalysts are vital for any business to appreciate in value. What are the key ones to drive your business forward?
The growth of Guild’s fanbase has been pivotal in highlighting that the company is able to meet and exceed the ambitious targets it is setting itself. In less than three months, the company doubled its social media following, reaching an important milestone of an owned audience of one million followers at the beginning of August, two months ahead of schedule. Guild is continuing to see substantial growth in its owned audience and this is pivotal in ensuring it attracts brands through its partnership programme which are a suitable fit for Guild. In addition, our total Guild network audience (which includes followers of our players, influencers as well as Guild’s own channels and content) has also grown exponentially, and exceeds 16 million. This figure excludes David Beckham’s 125 million social media fans and followers.
Guild’s academy system will also become important in creating value for the business. Within the company’s first year, its pro-players have won three major esports trophies, demonstrating that its academy system is already delivering consistently strong performances from its players. In the long term, the company aims to use its academy to find the next generation of pro talent as part of its “path to pro” strategy by using its own in-house talent scouts to recruit players showing the most potential. The academy will also serve to attract Guild fans for life, serve as an important asset for sponsors to reach a young audience in an authentic way, create a significant revenue stream through its scalable subscription service, maintain a pipeline of professional athletes for Guild’s teams and create an opportunity for player transfers in the long run.
Imagine you find yourself in a lift with Warren Buffett. What would be your ‘elevator pitch’ to summarize why he should invest in Guild Esports?
The esports sector is one of the most dynamic and fast-growing sectors of the moment. NewZoo estimates esports revenues will reach around $1.6 billion by 2023, maintaining a 15 per cent annual growth rate and that audience numbers will grow by over 10 per cent per year, totalling 646 million by 2023. Esports is also one of the few sectors mostly unaffected by the pandemic and its high-growth potential is also not contingent on the global population remaining at home. This makes the sector unique as it is particularly resilient to the current economic uncertainty.
Guild is a fast emerging global esports teams brand with a track record of appealing to, captivating and attracting youth audiences and leading consumer brand advertisers and sponsors. It has also established a unique esports Academy, inspired by proven Premier League football teams to reinforce its brand equity and connection with David Beckham, an international icon and football star. As the only esports organisation listed on the London Stock Exchange, a growing fan-base or “franchise”, it offers investors with a pure-play opportunity to invest in a fast growing esports teams business with exposure to favourable long term fundamentals and visibility involving Gen-Z and millennial audiences.
Please note: this discussion with Kal Hourd CEO of Guild Esports forms part of the ShareBuyers’ going for growth series – helping companies with high growth potential to share their growth story.