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Episode 43: If it Ain’t Broke ft. Adam Fitch and Rishi Alwani

Imad Khan November 25, 2020 28

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SPEAKERS: Rishi Alwani, Imad Khan, Adam Fitch

Imad Khan  00:02

What’s up everybody, this is FTW with Imad Khan. I’m your host Imad Khan and joining me today on this If it Ain’t Broke edition is Dexerto’s Adam Fitch.

Adam Fitch  00:10

Thank you very much for having me once again,

Imad Khan  00:12

And later on we’ll be joined by Rishi Alawni of The Mako Reactor to talk PUBG’s massive investment in India. But first, Call of Duty League. It was announced last week that Chicago Huntsman would be rebranding to OpTic Chicago. While the team is still owned by NRG, it is being rebranded as players like Seth “Scump” Abner and Matthew “FormaL” Piper, longtime OpTic members during the Call of Duty World League days have taken over the zeitgeist of the team. Most fans follow the Chicago Huntsman because of its roster, not the city associated with it. Hector “H3CZ” Rodriguez, who runs OpTio Gaming, is now co-CEO of NRG and CEO of OpTic Chicago. Adam put out a story last week on Dexerto pointing out how important branding is in Call of Duty League. It called into question Activision Blizzard’s attempt to put geolocation at the forefront. So Adam, while geolocation did work for Overwatch League because it was a completely brand new franchise. You know, it seemed that Activision Blizzard wanted to bring over the same model to Call of Duty League and kind of implant its own vision into the current culture. And clearly that’s not working out exactly exactly how it envisioned. Is that a problem for Activision Blizzard? Or are they just kind of going with the flow?

Adam Fitch  01:17

I knew things would be a little bit different with the Call of Duty league when Atlanta FaZe slipped through the cracks. And they actually retained like a pre-existing brand as like, okay, something’s changed here versus the Overwatch League. And, well, I think, college esports has always had a problem in terms of new fun and new spectator acquisition. And that’s kind of been evident in the lack of viewership growth over the past decade. Really, obviously, things have picked up as esports picked up, but it’s never really grown into kind of considered tier one esport by any means. And I think it has the fan base, but it needs it needs a stronger viewership, right? And I think tapping into locations, like I guess it’s Chicago and Atlanta, I don’t have the exact demographic of Call of Duty fans there. But I think they’ve always kind of banked on being able to do that, because you see, like rabid like geo tie targeted and geo located fan bases in like football, for example, like Manchester, United Manchester City, huge rivalries there. But then you look at the Call of Duty league as LA Gorillas, and there was OpTic Gaming LA, which is now LA Thieves. And nobody cares about Gorillas, like, that’s just how it is. And I think there’s a huge opportunity there for them to tap into it. But I also think like marketing, the esports side of the equation for Call of Duty has always been a weak point for Activision Blizzard. So I don’t know if they’ll ever actually managed to pull it off. But I think that is one of the key ways they could, in theory, grow Call of Duty League beyond where it is now, even though it did just have a record year, which is obviously a promising sign.

Imad Khan  02:52

I think what it points to is just how important personality is because you look at kind of the streaming esports space. I mean, there are individual streamers are pulling in greater numbers and entire leagues. And I see the industry moving more and more towards just streaming, I see a lot of pro players trying to do more streaming as they try to develop their brands, knowing that their careers might be cut short, because it’s more of just a symptom of esports starting to lag behind the current kind of streaming ecosystem?

Adam Fitch  03:18

It’s a good question. I mean, well, I think Call of Duty esports and Call of Duty more widely, I guess, was kind of like a springboard for some of the first like gaming celebrities, you look like NadeShot like signing with Red Bull, like, however long ago now, probably eight, nine years ago, and they were early on the content creation and streaming game, when you’re competing, is hard to find time to stream unless you’re going to stream competitive matches or scrims. And then you’re giving away tactics and stuff. So I think yeah, it’s a natural limitation. And I it’s broadly across like media and stuff as well. I think just personality is everything in like the internet era, I guess. And that goes across media and gaming and then streaming. So while competition is supposedly the number one thing in esports it depends how broadly you define esports right and I’d say the streaming portion fits into that in some senses with obviously like 100 Thieves, not only competes in other apparel, but it has Valkyrae and Courage and, and brookeab, Neeko and such were all pulling in those numbers. So they’re actually part of like 100 Thieves. Actually successful still based based off of that and bringing in the viewership. So I think it’s quite nuanced and Call of Duty was in a really good spot for that and still could be, but I don’t know it’s hard. I think it’s hard to balance competing and streaming. So they’re never going to be as huge personalities that they could be. I think like Scump is a perfect example of somebody who would be way more like financially successful if he retired and stuck to streaming and creating videos because he can have a year’s break, come back, upload a YouTube video and get 200,000 views overnight. So imagine if you had a consistent schedule, and he was really putting himself out there instead of concentrating on trying to be the best in the game. You know?

Imad Khan  05:09

Are there any other teams you think in the Call of Duty league that could probably be rebranded with, you know, a more long standing organization?

Adam Fitch  05:15

I think Dallas Envy would be the most obvious choice for me. So FaZe Clan Association I named OpTic gaming and I named team envy is like the three main legacy brands in Call of Duty. Been around, they’re basically from the start of the esports side of things really picking up. And Ency anyone is missing out. Now obviously, we’re with OpTic Chicago, and Atlanta FazE and LA Thieves to some degree because of nature and his former association with OpTic gaming. He’s very much a branch off of that. So I think Dallas Envy would be the most logical kind of next step in doing that. I don’t think like changing London Royal Ravens to London Rogue, or Florida Mutineers to Florida Misfits would have anywhere near the same impact as bringing back Envy into the CoD fold and look like we saw Hastr0, the well former CEO now as the chief gaming officer or chief people officer, one of those bs titles. He’s um, he actually put out a poll a couple hours after I tweeted about Dallas Envy saying this is not me saying this or swayed anything but which do you prefer Empire or Envy? So I think that’s something they’re considering now. Now they’ve realized for sure that they can do that as long as they fit in with whatever the superlux rule is over Activision Blizzard about naming conventions for franchises.

Imad Khan  06:29

Hmm. You know, I look at kind of like the Chinese esports space where it seems that at least like League of Legends, or Dota, a group can come together and form a team. And you know, that’ll be their brand and people just band by it because of the, I guess the quality or strength of the players playing. While, you know, and at least in the West, I do see branding as more and more important, and, you know, I was watching a video in which Mr. Beast that very popular YouTuber, I think has like 50 million subscribers, he was talking about how he really do want to start a league of legends esports team. And, you know, I mean, is there going to be a future you think, at least in western esports where, whatever brand, whether it be a YouTuber, a shoe or whatever, decides to form an esports team, and that is the thing that propels it to great stardom. I mean, even LA Thieves there you said that in your article that they’re the fourth most followed account in the league on Twitter, even though like it’s really really new.

Adam Fitch  07:19

You can kind of look at it already happened in a sense, like Nadeshot obviously has his competitor past, but he he’s most known for his content. And you can look at like Team Queso, or Spanish organization, I couldn’t tell you the name of the YouTuber, but he’s a popular YouTuber there. And he kickstarted I bought last case is like cheese. So is called team cheese. And they have a cheesy logo, but like it works. And it’s huge in that kind of local market. Right? So I could see Mr. Beast doing it. And I mean, that’s a really strong foundation to build off of like that pre existing audience. And of course, you only need like 5% of his audience to go across the 50 million, and you’ve got one of the most followed teams instantly. And if you and that that percentage, I mentioned, that that’s people who really get into it. Like they’ll probably have more people who just casually follow or at least help to pad the numbers because they support him as a person as a personality. So we’ve already seen a slight amount in the West and I can’t I can’t imagine we’ll see it more button only when esports is proven profitable industry because right now, the the organizations that are claiming to be profitable, the ones like TSM, who have huge creators, as opposed to the pure competitive ones, say like an Excel esports in in the UK, like Australis, for example. I think he kind of hinges on that when esports is actually a good investment instead of when some people on LinkedIn, literally anyone saying it is a really good investment on the team side right now, at that point, I think we’ll see more creators looking to do so. And it’s cool. I actually think a lot of societies called see creators really getting into the business side of things and having like products and business ventures beyond just creating because it’s a lot more scalable. Like you can only create so much content, but you can actually have a team on the side and that can grow. So I’d be interested in seeing it happen. And I think it will be a phenomenon that grows in the next couple years.

Imad Khan  09:11

For a major creator like a Mr. Beast or PewDiePie, whoever, if they decide to get into esports. You as a business partner, what is like the number one piece of advice you would give them?

Adam Fitch  09:22

Yeah. Oh, God. Don’t do it. No. I think just do due diligence, right? Don’t Don’t just look at the team. If you’re looking to get involved with a team like Vikkstar, for example, part of the sideman, very big emotion right now. He’s just invested in London Royal Ravens, which is part of Rekt Global so it also owns like Rogue. Look, I don’t think he’s just identified them as all that they’ve got huge followers. I don’t think that’s the case. I think he’s gone right? what fits with my brand and he’s like, Okay, I’m big in Warzone right now Call of Duty. I’ve got a background there as well. Okay, who are involved in that? Like the London Royal Ravens are part of that he’s English and London Royal Ravens is the only English franchise. So I think that just kind of fits in and is a natural extension of his brand and his persona online and kind of his background, I guess. So I think finding something that makes sense. And something that you believe in is a lot more. Just it makes a lot more sense than just saying, okay, TSM we’re getting the most views on YouTube right now, so I just go with them. Like, I think you just got to be careful with that and take your time you don’t like esports is not going to go anywhere. And especially like competition is never going to die. So you can you can take your time. And also maybe don’t be afraid to start your own if you’ve got the kind of capability and the backing and the team to do so. That may be the most smart way of doing it. It just depends what you’re really looking to do and how much you’re looking to invest.

Imad Khan  10:51

Well that Adam, thank you so much for jumping on.

Adam Fitch  10:53

Thank you for having me mate.

Imad Khan  10:54

And now I’m joined by Rochelle one of the microreactor. Earlier this year, India banned PUBG as well as the host of other Chinese apps as tensions between the two countries intensified. While PUBG is working on making its return by rebranding as PUBG Mobile India, a custom version that aims to satisfy regulators, it did so by cutting ties with Chinese giant Tencent and striking a deal with Microsoft to move all PUBG Mobile data. PUBG Corps. parent company Krafton plans to invest $100 million in India to help cultivate a local video game esports entertainment and IT scene. There are plans to open offices throughout the country and hire more than 100 employees. So Rishi, the loss of PUBG was major, major news early this year. It returning is probably also equally major news. What is the reaction been from the PUBG Mobile community in India,

Rishi Alwani  11:39

The game was banned around two months ago. And the situation was such where it had to do a lot with the increasing border tensions between India and China. The response from the community to the fact that it’s coming back has been fantastic. There’s been a lot of people who are really happy that’s coming back. The players themselves, the the bit casual players are pros, they’re really happy that it’s coming back, the response has been great. And at the same time tournament organizers and esports teams are also really happy. Because you know, when you have the likes of fanatic in the country, when entity for that matter, TSM entity, a lot of them are doing business in India on the basis of the fact of the PUBG Ecosystem. The fact that there’s so much prize money, the fact that that you know, Tencent was pushing it was willing to invest a lot was a big draw for talent and was a big draw for people to care. So the community is really happy. The business is really happy. But it’s not exactly following protocol. And I say that because see, here’s the thing. While you do have the community and the business that’s really happy what’s going on. The government, on the other hand, doesn’t seem to be notified. And I say this, because, so after we had the announcement that it’s coming back, and they said there’s $100 million, you know, that they want to put $100 million dollars into India, and they want to hire a ton of people. That’s all great. But I mean, there’s There was a recent report in The Times of India, which basically stated that, you know, and they were citing a government official that is able to address the concerns, it will be difficult to grant any relaxation. That’s the exact quote, according to government sources, speaking of Times of India, now, there are a couple of things to this. For one, Times of India has same publication last year that in its infinite wisdom, claim that PUBG was making a ton of money in India more than it was making, they were saying they’re doing something like 50 crore or 70 crore a weeks. And in India crore is 10 million, by the way. So, when you’re saying you’re making 500 million rupees a week, which is I mean, nonsense, they wanted the best case, it was 2 to 3 million US dollars. So, the facts that the fact that, you know, times video is also responsible for that a year ago, and that was a different team wrote about it. But still, that’s that’s one issue. second issue is, it’s quite likely that the government will have a problem, because when you have a game, that’s this high profile that gets banned, that decides to come back in such a fashion, there are going to be regulatory concerns, that is going to be a problem. And I don’t think that they’ve addressed that. And I say this because it takes time. No one has, particularly when you’re dealing with the government here, the amount of bureaucracy, the amount of red tape, the amount of lobbying that’s required. It’s not like anyone for the government is going to give you a say so immediately, and I say this, because it’s not just one department of the government that has a problem with PUBG Mobile, it’s a bunch of them. All right, and all of them are the next seven or eight ministries all of which have a problem with them. Citing issues like data, citing issues like violence, citing issues like addiction, so and for all of them to you know, reach a consensus come together and agree to it is when it’s going to take time, it’s not going to happen overnight. So while while PUBG Corps wants this to happen really soon, and I say this because a lot of the local PUBG Pro players here have been hinting at Diwali release. And I mean, we’re ready I think. I mean, we already are on Diwali in India. So, and we’ve seen teasers already. So they were like, there was a teaser that went out yesterday that had, yeah, yes, they had Dynamo and grant and, and Jonathan three, three really well known PUBG pro players here who are talking about, you know, oh, you’re missing the game, but it’s coming back. So that teaser already went out. And then from and the other rumor that’s doing the rounds is they’ve enlisted Bollywood actor Arshad Warsi, who used as one of their, you know, brand ambassadors of sorts. And that’s another piece of advertising that’s going to go out as well. And now so that’s the thing, right? When you have all of this in the works and all of this that’s happening, and you’re going this high profile, and you don’t have the government backing just yet, it makes the entire thing seem very amusing to me.

Imad Khan  15:45

So you’re saying that like the the excitement might be a little premature, given that there’s a lot of bureaucratic red tape a lot of regulators that still need to analyze this game before they feel comfortable bringing it back. I mean, do you feel that there could be enough pressure from the public or from the corporate end, to essentially push the government to try to bring this game back more quickly?

Rishi Alwani  16:04

Look, at the end of the day, the only reason anyone decides to make grandiose statements of putting so much money into India. And, you know, launching the end and bringing back the game with, you know, trying to get the public on the side is for that reason, it’s pretty obvious that this is the reason and I say this because, I mean, it’s a pretty it’s an open secret in the industry here that PUBG Corps has been mulling its options for a while. They did they did talk to Jio, they did talk to Airtel, they did talk to a few other people in the in the senior. And the reason being why they they talk to bigger companies like Airtel and Jio is because telcos in India are they deal with bureaucracy on a daily basis. That’s how anything happens in that in that industry to begin with. And the only reason you talk to them is because hey, can you help us get unbanned? But you know, nothing will happen overnight, which is why I don’t think any of their discussions went through really well. Because if it did with with Jio, if it did with with etal, these were the these would be the potential PUBG partners, but that doesn’t seem to have happened. So, in my opinion, yes, I do agree with you is premature. I mean, it also makes me wonder what’s at stake here, because it’s definitely not a revenue play. The revenue is maximum 2-3 mil, which is, you know, from the grand scheme of things a rounding error for for PUBG Corps. But I think what’s more likely is because Krafton wants to do an IPO. And when you do an IPO, and you and the investors see that you’re missing out on that 50 million monthly active user base from India, that’s where it becomes a problem and harms your share price and your valuation. And we saw that with Tencent, right? So when the game got banned, Tencent overnight, lost what I think are $34 billion from its from its valuation on the stock market. So I think that’s the play here. The play here is to ensure that they have a great IPO. And if this is a key component of it, and this is a key market for them, they’re going to try every trick in the book. It’s just that I feel that it’s premature and it’s a little unfair, because you’re basically I mean, let’s be honest here, if the government does, it doesn’t give you a pre approval of balances again, there are two problems. One is this is a set precedent. Because I mean, let’s be honest Activision. Right. Activision has Call of Duty mobile, the developer there is also Tencent, the developer and PUBG Mobile is still Tencent. That hasn’t changed either. So there’s a chance that this could backfire and lead to other games being banned also, for that matter. So that’s one concern I have. And the second thing is, this isn’t exactly a new trick, because there has been another short form video app that rebranded itself or short form video from China, which I think was called quiet which rebranded itself to Super to snap video, the snapvid. And when it rebrand itself got a million, it got a million downloads from India. And what they basically did was all the employees on the Chinese company, they changed them to another company, which is a non-Chinese company that was the that that had them on their rolls. And I mean, you can do that if you’re small enough, and you can fly under the radar. But when you’re someone like when you’re a game that’s as visible and a company as as visible as PUBG Corps or PUBG. That’s where the problem lies. You can do these things that put you under the radar because it sets precedent. Tomorrow, nothing stops TikTok from doing a similar thing. And I think that’s what’s going to be fascinating because the government will eventually have to draw a line somewhere.

Imad Khan  19:15

Mm hmm. I mean, what is the financial hit been for not only the tournament organizers in India, but the players, fan base or the community and of course, PUBG Corporation itself?

Rishi Alwani  19:25

In terms of PUBG Corps itself like I said, it’s for India, more or less a valuation play. And that’s what they’re looking at. It’s not two or 3 million Max Max they’re doing from India is basically a rounding error in the grand scheme of things. It’s the user base and the value and the value of that user base brings. When you look at it from a point of brand partnerships, which they’ve done in the past in India with Bollywood with a couple of Bollywood movies one Street Dancer 3D comes to mind which they did in the past. So that’s that’s where they lose out Atlas, obviously. Look, it wasn’t just the brand partnerships either right or and it wasn’t just a battle boss either, which was the major, major source of revenue from India. Whereas also the fact that matters, the content and ecosystem around it, for example, when Tencent did a whole web series on YouTube, and come on, you’re gonna make money of that ad revenue also. So the way I see it, I don’t think the hit isn’t pure revenue terms with more than a value and valuation terms is where PUBG Corps is being hit. If I look at it from tournament organizers and esports teams, well, I mean, for example, a Fnatic basically has decided to put everything on hold for three months, because their perspective was that the game will have to come back and only when it comes back, will they you know, end up doing anything. Those three months, they would take a hit because they are paying players and there are no matches, there’s no rounds or no tournament is nothing. That is what is happening from a team perspective. tournament organizers look ahead as well. I know a couple of them who lost basically an 80% of their topside valuation overnight. So there’s a pretty big, big problem for them. And that’s why you see a lot of them moving over to other games, right? They’re trying to make up for lost time. They’re doing stuff with Valorant. They’re trying to do stuff with Free Fire. They’re trying to do stuff with CoD Mobile. And while these games have their audiences, they’re not going to have the the mass appeal that PUBG has. I mean, no offense to Free Fire, it’s a great game. But the audience that attracts in India is, for lack of a better term, rather toxic. The game itself has a lot of cheating issues and the like. So you know, it’s been a big problem for organizers. I think they’ll be really happy if it comes back. And if I look at it from a player base that in my opinion, that’s the part that’s been hit the most the player base and content creators. That’s because see, once you’ve played a game that’s as polished as PUBG, going back in anything else is really tough. The Call of Duty Mobile is really good, but at the same time Activision is non existent in India. And were non existent to the point where even called a black ops Cold War doesn’t even have an India release. Because Activision thought, basically Activision priced themselves out of India. I think around $71-72 versus 60 in the rest, rest of the world. So no one’s touching it here. So the ones which Activision not even bringing that game and they don’t even begin mainline Call of Duty will they do Call of Duty mobile, so Activision is a non-entity. Your other options are what, Ludo and Cricket? Those are fine, and loot, they’re making money. They’re great games, they’re making money. But that’s a super casual audience that doesn’t help build an ecosystem. You can’t build an ecosystem around live streaming Ludo. No one’s gonna watch that. You can’t do esports around Ludo either, so and cricket, the cricket game show are yet to be esports. Ready, I have a feeling that we’re probably a few years away before cricket games in India become esports ready. And that’s a lot to do with the developer with developer resources being prioritized towards things like, you know, the cricket equivalent of a FIFA Ultimate Team. Until that comes together. I don’t think there’s anyone there who’s able to, you know, build an ecosystem around it. And that’s where it gets fascinating. There have been some attempts from Indian companies. So like, there’s been one game that’s called MaskGun that actually wasn’t even made for India. It’s made by an Indian studio, June Gaming, that’s based out of Puna. And that game, so like, I think, what 30 to 40% uptick in Indian users since PUBG got banned. It’s got a nice Fortnite meets Counter-Strike style aesthetic, and they don’t have a battle royale mode. It’s mainly like, you know, deathmatch, Team Deathmatch. But it’s got a pretty rabid hardcore audience. I don’t know if that company will plan or use that game as an esports play. When I interviewed them last, they did hint that they were working on something else as well. So I mean, you do have a couple of Indian in common Indian guys like them who are trying to do stuff, but it’s, it’s still up in the air as to who’s who’s able to come in and you know, fill that void. Because what most people… I mean, the thing is, look, I look at it this way, right when we have our Prime Minister telling saying that he wants games made from India, that’s great. But they’re not going to happen overnight. So what we’re seeing right now is not even wave one. It’s like wave zero of an Indian attempt. Wave one is probably at least three years away, you know? And I’m referring to games at scale. I’m not referring to you know, your indie stuff like Raji, which is great for single player experience. I’m referring games at scale, which can actually scale which can actually help you build an ecosystem around. And I don’t see that happening for another year at least.

Imad Khan  24:06

Well, there’s definitely a lot of complications when I guess analyzing the gaming and esports space in India. But Rishi, thank you so much for jumping on and giving us all this information.

Rishi Alwani  24:14

no worries!

Imad Khan  24:16

And that was FTW with Imad Khan. If you like the show, please rate subscribe and share. Full transcripts of the show can be found at ftwimad.com. To follow Adam and all the work he’s doing at Dexerto, you can follow him @byAdamFitch on Twitter. To follow Rishi and everything that’s going on in esports in India, follow him @RishiAlwani on Twitter. To follow me in my writing over at the New York Times The Washington Post and elsewhere find me @imad on Twitter. And Ron Lyons is our audio producer. With that, we’ll catch you guys next week.

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