Tens of millions of dollars continue to flow towards top esports organizations, with Gen.G announcing a $46 million investment round Wednesday, a raise featuring money from a mix of Silicon Valley venture capital firms, figures in traditional sports and actor Will Smith.

Flush with cash, and in some cases strengthened by the enforced scarcity of a franchise model in publisher-driven leagues built around games such as Overwatch and League of Legends, esports organizations are starting to embark on long-term visions to shore up their positions for the future. The visions themselves are far from uniform however, as some seek to emulate traditional sports teams while others see something quite different, operating more like full-on corporations than merely a competitive organization.

Akin to European sports clubs that have teams which compete in various sports — think Maccabi Tel Aviv, Real Madrid, and Bayern Munich — esports organizations are companies that own teams which participate in several different video games. But for some their business model extends into other areas as well, including content creation and apparel. In this way esports organizations are breaking from the established business models of traditional sports, based heavily on television broadcast revenue and box office receipts, to reimagine their place in a new, online and global industry. The financial ecosystem around many such outfits encompasses competitive video games, player streaming on platforms like Twitch and Mixer, original unscripted content and even gambling.

Cloud9, which raised $50 million last year and $25 million in 2017, has decided to place some of its upcoming focus and capital on creating a competitive structure for young players.

“Imagine baseball was invented last week, what would Little League look like?” said Dan Fiden, president of Cloud9. Fiden said that, unlike traditional sports which have youth leagues, esports for kids is completely unstructured.

“Some of the players we sign have never been coached in anything ever,” he said.

The organization’s planned Los Angeles headquarters will feature a public space where fans can meet up, interact with players, watch games and it will also contain the “equivalent of the esports little league diamond,” according to Fiden.

“We want to continue to continue to launch programs like this to learn how best to organize and coach kids. We want to figure out the curriculum,” Fiden said, but noted his organization’s core business remains trying to win games.

Gen.G is also trying to move beyond the footprints of existing sports teams via its international focus and content production, both common in an industry that has been always been international and which considers South Korea to be its Mecca. For content, fans expect access to top players through Twitch and YouTube.

“We don’t have to just build versions of what we’ve seen yesterday,” said Gen,G CEO Chris Park, who was previously a senior executive for Major League Baseball.

Park said his company will continue to place a heavy focus on growing in China, Korea (they own the Seoul Dynasty team in Overwatch League), and the United States.

In a departure from traditional sports, he said Gen.G will not only be looking to attract top players, but top content creators as well, since they plan to “create content that shows gaming is a culture and way of life.”

The 100 Thieves franchise, which received a high profile investment from singer Drake, has established itself as an apparel company, with its limited edition gear quickly selling out after its becomes available online.

The differing approaches illustrate that esports is still very much amorphous and in its very early stages, even as investor attention -- and money -- has arrived en masse. Park said that his organization was “oversubscribed within hours” of announcing their latest raise. Fiden said there has been “strong interest” in Cloud9 from investors since 2017.

Last year’s notable raises, in addition to Cloud9, include $38 million for Echo Fox, $37 million for TeamSoloMid, and $26 million, including money from Michael Jordan, for Team Liquid.

A 2018 Goldman Sachs report stated that esports have landed venture capital investment totaling $3.3 billion since 2013, and $1.4 billion as of the middle of last year.

“We [the esports industry] look like the NBA did in late 60s, early 70s,” said Canaan Partners’ Maha Ibrahim, who has led the firm’s investment in Gen.G.

Driving the spiraling valuations and investments, according to Ibrahim and fellow investor in Gen.G, Roger Lee, of Battery Ventures, are a mix of Overwatch League’s exposure on ESPN and an overwhelming amount of data to support the viability of the enterprise. Seventy-nine percent of esports viewers are under 35 years old and this audience, on Twitch and YouTube, outstrips HBO, Netflix, and ESPN combined, according to Goldman Sachs.

Lee believes top esports teams have more visibility than a comparable baseball team, and that once esports starts “generating more interest, they’ll be worth the same amount.”

Ibrahim agreed, saying, “Teams will be billion-dollar entities, of that I am sure.”

For now, valuations, like those for many start-ups, are based on the hope that attention will be converted to revenue at some future date. A plurality of team revenue is from sponsorships, according to Goldman Sachs, which projects that by 2022 that will shift to come from media rights.

Video games, including the professional competitive element, are not widely seen as a threat by traditional sports leagues or teams — especially those like the NBA and most of its franchises, which have co-opted them. But in Hollywood, games like the Fortnite are increasingly seen as a threat. Netflix, which is expected to spend $15 billion on shows this year said in a recent shareholder letter that, “We compete with (and lose to) Fortnite more than HBO."

“This is more than a movement, it’s the next generation of media and media consumption,” Ibrahim said.

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