Riot Games strikes up data deal, equity stake with GRID
Sharpr is a weekly newsletter covering the intersection of esports, betting, and Gen Z
Hi everyone, Cody here.
Fun fact: this intro section of the newsletter is sometimes the hardest for me to write. But that’s probably because I usually draft this part at the very end after I’ve already exerted all my energy writing the content of the newsletter.
Anyway, we’ve got a big story to run through this week with Riot Games and GRID, which we’ll get into below. Aside from that, this will be the second-to-last newsletter of 2024. Next on the docket? My annual wrap-up of the year’s most defining stories.
Stay tuned.
In this week’s edition of Sharpr…
Riot Games strikes up data deal, equity stake with GRID.
Rivalry records 50% increase in Q3 betting handle.
GG.BET partners with Dot Esports on Counter-Strike hall-of-fame.
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Riot Games strikes up data deal, equity stake with GRID
Riot Games has expanded its relationship with esports data company GRID in a multi-year deal set to kick off next year.
The three-year agreement will establish GRID as the exclusive data provider for League of Legends and Valorant esports.
Riot Games has also acquired an equity stake in GRID as part of the deal.
Financial terms of the partnership were not disclosed.
As an official partner, GRID will collect and distribute real-time esports match data for the publisher’s marquee esports properties. The data can be used in a variety of ways to enhance the experience and provide value for fans, advertisers, media companies, and sportsbooks.
“Through our partnership, we can grow the presence of official esports data in Riot’s ecosystem and the industry, enabling growth, innovation and more entertainment value for the fans,” Doug Watson, head of business strategy across global esports at Riot Games, said.
The agreement builds on a two-year relationship between the two companies. In February, the pair released the Valorant Data Portal, providing professional teams with access to granular data from official league matches and private scrims. Riot and Grid intend to recreate a similar product for League of Legends.
🔎 Between the lines: League of Legends and Valorant are two of the biggest esports franchises globally. Similarly, they are also two of the most bet-on esports.
The 2023 League of Legends World Championship Finals in November set the record as the most-watched esports event of all time with 6.4M peak viewers, up 25% year-over-year.
Both Rivalry* and Abios reported that Valorant was the fourth most bet-on esport. League of Legends ranked number one on Rivalry in 2022 by betting handle while Abios reported it was the second most popular esport across the Kambi network of sportsbooks in 2023.
The partnership between the two companies could lead to improved uptime for League of Legends and overall Valorant coverage, which—given the betting volume these titles generate– would represent a welcome enhancement to the segment and its audience.
Thomas Lace, founder of Tactile Communications and former esports journalist, says the deal indicates a long-term investment from Riot in its official data, adding that the publisher now has “more skin in the game.”
"The shift away from the previous supplier–Bayes Esports—and the decision to take an equity stake in GRID means that Riot Games isn’t just focused on selling on data rights. The publisher is more tangibly invested in how its official data is used to build products and what those products look like.
“The investment is a sign that we may see less of the official data bidding wars that drive the high minimum revenue guarantee (MRG) costs that operators and other suppliers are often expected to pay – at least for LoL and Valorant.”
MRG-based structures were a talking point at the Casino Esport Conference in March, with former Pinnacle CEO Paris Smith saying that the price point for esports data is too high for where the segment is at today.
“The data and game providers have a huge play in this, but the problem is they’re making it too expensive for how small it still is at this stage,” Smith said. “As an operator, how do you pay $1 million a year for data when you don’t have anyone playing in esports.
Rivalry records 50% increase in Q3 betting handle
Gen Z-focused operator Rivalry released its Q3 2023 results and reaffirmed its H1 2024 profit guidance.*
Betting handle was $105.7M CAD, up 50% year-over-year, while marketing spend was reduced by 13%.
The company recorded $8.7M CAD in revenue, a 22% increase annually.
Gross profit reached $4M CAD in Q3, up 90% year-over-year.
Casino accounted for approximately half of the operator’s betting handle in Q3, highlighting Rivalry’s ability to “cross-sell next generation bettors and drive growth,” particularly against “unseasonably low viewership” in select esports events during the quarter.
In 2022, esports made up 90% of the operator’s sportsbook handle, although CEO Steven Salz noted that the “traditional sports segment on Rivalry has been growing,” during its Q3 conference call. This piece of intel comes a few weeks after Rivalry teamed up with Low6 to release an NBA fantasy sports app.
The operator noted experiencing geographic diversification and increased traction in new international markets including those in Southeast Asia, as well growth in its regulated home market of ontario, where betting handle grew by over 400% from Q3/22.
Following a C$14M investment raised in last month, Rivalry plans to go “back on the offensive” with marketing spend against improving customer economics (CAC is down 19% and betting handle per customer is up 29%).
(*Disclaimer: I am a full-time employee of Rivalry.)
GG.BET partners with Dot Esports on Counter-Strike hall-of-fame
Bookmaker GG.BET has partnered with esports and gaming media site Dot Esports to launch “CS:GO Records,” a virtual hall-of-fame for Counter-Strike: Global Offensive’s most storied players, teams, creators, and moments.
The “digital monument” on Dot Esports features 50 different records set in CS:GO – from the winningest teams and players to the most viewed Counter-Strike creators and clips.
The campaign is a farewell to CS:GO as the latest installment of the franchise, Counter-Strike 2, comes into focus. CS2 was released at the end of September and will see its first major tournament–the PGL CS2 Major Copenhagen– next year in March.
“As we start writing the next chapter with the beginning of the CS2 era, there’s no doubt new legends will emerge with their own feats of heroism,” Dot Esports’ editorial team wrote. “We hope the audience enjoys reliving these moments as much as we enjoyed covering them.”
🗞 In the news
Oddin has partnered with Bill Pascrell III to help lead a US licensing blitz.
Better Collective SVP of Esports Henrik Lykkesteen has announced his departure from the company.
DraftKings rolled out a “Pick6,” a new player prop fantasy game.
📈 By the numbers
Esports Entertainment Group posted a 72% dip in revenue to $2.7M in Q1.
The 2023 League of Legends World Championships created $144M in media value, according to Shikenso Analytics.
Mojo, a sports-betting startup from Marc Lore and A-Rod that raised $100 million, is cutting 20% of its staff.
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Reach me directly at luongomanagement@gmail.com 📩 or on Twitter 🐦
All figures are quoted in US Dollars at the current exchange rate unless otherwise specified.
*Disclaimer: I am a full-time employee of Rivalry.