Since 2020, the esports market has experienced significant growth and has become increasingly competitive. Currently, three major players have emerged in the market – Entain, Esports Entertainment Group, and Rivalry. In this article, we will explore the performance of Entain and Esports Entertainment Group in 2023, while highlighting the success of Rivalry.
Entain and Esports Entertainment Group started the year with ambitious plans. Entain relaunched its brand, Unikrn, in December 2022, aiming for global domination. However, despite the initial excitement surrounding the relaunch, little progress has been made in the past 12 months. In fact, Entain recently announced that it would be scaling back its direct-to-consumer operations with Unikrn. This decision reflects their current situation and priorities.
Similarly, Esports Entertainment Group (EEG) faced a turbulent year, allowing Rivalry to surge ahead. In May 2022, EEG expressed doubts about its ability to remain in business for another year. Additionally, they defaulted on convertible notes issued in 2021, leading to their future being in the hands of a creditor. In an attempt to stabilize their finances, EEG sold its Bethard online casino and sportsbook business for €9.5m in February. However, despite cost reductions, EEG has yet to see significant changes or improvements in their financial performance. The CEO of EEG, Grant Johnson, remains optimistic and anticipates a rebound in 2024.
In contrast to the struggles faced by Entain and EEG, Rivalry has emerged as the strongest performer this year. Pinnacle, one of the main investors in Rivalry’s £5.9m financing round, recognizes their success in picking up the slack left by Entain and EEG. Rivalry has consistently exceeded revenue expectations and has established itself as the esports brand of choice for the younger demographic, particularly Generation Z and millennials. Their marketing campaigns, filled with internet slang, memes, and influential figures, have resonated well with this audience. Notably, 80% of Rivalry’s customer base is under the age of 30.
Despite Rivalry’s success in generating revenue, they continue to face challenges in terms of profitability. Their latest earnings report reveals that the company struggled to turn a profit in Q3. To maintain their position as the market leader, Rivalry needs to address this issue moving forward. While the company experienced record revenue of $8.7m in Q3, increased operating costs and foreign exchange losses offset this growth. As a result, their comprehensive loss for the quarter widened to $6.0m compared to $5.6m in the previous year. Nevertheless, Rivalry’s co-founder and CEO, Steven Salz, remains optimistic about their revenue growth and expects further expansion in Q4 and beyond.
In summary, Rivalry has emerged as the dominant player in the esports market in 2023, surpassing the performance of Entain and Esports Entertainment Group. Despite facing some profitability challenges, Rivalry’s innovative marketing strategies and appeal to younger audiences have propelled their success.
