Was GAME’s £20m Multiplay deal an astute purchase or an unnecessary risk?

‘Retail should get involved with eSports’. It’s a headline we’ve run several times in MCV over the last two years.

The big eSports specialists believe that the High Street is its opportunity to turn pro-gaming from a niche (albeit widely watched) pastime, into something every gamer can participate in.

GAME has always been the ideal candidate to lead this charge. With some 330 shops in the UK, and its repeated desire to turn its stores into ‘community hubs’, surely introducing competitive gaming into its outlets was inevitable?

Yet, whenever we would meet the team at GAME and put that proposal to them, the answers we would invariably get were dismissive. Now we know why. GAME this week acquired Multiplay – the organiser of the Insomnia UK eSports series – in a deal worth 20m.

So what does this mean for GAME, Multiplay and eSports as a whole? We asked GAME boss Martyn Gibbs and Multiplay CEO Craig Fletcher.

Why eSports and why now?

Martyn Gibbs, GAME:Our headline aim – which I’ve been speaking about for two years now – is to build the most valuable community of gamers. We need to be able to do that in-store, online and anywhere players might be interacting. If you think about all the events we have been running, all of the in-store lock-ins, the midnight openings, the ways we get involved in various events – Insomnia being one of them – we can play a fundamental part in tying together all of the gaming experiencesthat there are. This is a natural progression for us, so we don’t see this as completely left field. This is absolutely on-point in terms of our strategy.

What is the commercial opportunity in eSports?

Gibbs: We don’t just view eSports as a concept on its own, it is also about our customer lifetime value and being able to bring future income into the business via different events. Multiplay is a very successful business in its own right – it is profitable, and we believe we will be able to work alongside the team to run more and more events.

It’s clear what Multiplay can offer GAME. But what can GAME do for eSports?

Craig Fletcher, Multiplay: If you ask the person on the street about eSports they might say: ‘Where has this come from?’ But it’s actually been around for 20-plus years. The moment a company like Amazon spends a huge sum of money on a streaming platform like Twitch, people go: ‘What the hell? People actually watch others playing games?’. Suddenly you have mass-market interest. And then when a company like GAME makes this level of commitment it further legitimises eSports in the mass-market. It proves it is something worth taking seriously.

The potential is very hard to estimate. If you look at how fast the viewer numbers are doubling in eSports, it is being measured in months and not years. It is absolutely crazy. For us, this acquisition by GAME gives us the chance to access over 17m Reward Card holders who may have never even heard of eSports or the Insomnia events. That is a huge extra market.

Can we expect eSports to be integrated into GAME stores?

Gibbs: We could have built our own eSports platform, we could have done something like this by widening out our own events portfolio. The reality is that Multiplay gives us a fantastic opportunity to run bigger and better events, both in-store and out of stores, on a local and a national level. We have been very open about our stores being community hubs and our store managers are, to all intents and purposes, community managers. They want to run more events and Multiplay will support us in delivering that.

Could you do another big banner event like your GAMEfest expo in 2011?

Gibbs: It’s too early, with the two of us just coming together, to work out if that’s something on the radar. But it is fair to say that we will be looking to run sizeable events across multiple different gaming experiences.

GAME has had a tough few weeks following your profit warning in January. Is this announcement in any way a reaction to that?

Gibbs: I don’t know how quickly you think you can buy a business. Obviously it wasn’t connected to that. This is about having a long-term strategy to build the most valuable community of gamers. The acquisition has been in discussion for some time.

"When a company like GAME makes
this level of commitment it further
legitimises eSports in the mass market."

Craig Fletcher, Multiplay

Has the slowdown in physical software sales meant you have had to escalate your move into events?

Gibbs: We are not doing anything other than what we said we would do from day one. It is nothing to do with current market conditions or performance, it is a core foundation point that we are putting down here.

Are you planning any further acquisitions?

Gibbs: If a merger or acquisition lends itself towards developing our strategy, then we will look to do it. But I haven’t anything else I can talk to at the moment. Our focus right now needs to be on Multiplay. I really want to make sure that Craig has all of the support he needs to deliver the business plan.

eSports is closely associated with PC, which is the one area of gaming that GAME is not especially strong in. What is your aim for the PC market?

Gibbs: You’re absolutely right. The PC gamer is not a core audience to GAME at the moment outside of physical software. We have done some really good work in terms of being able to unlock PC downloads, where we previously haven’t. This acquisition allows us to access the right expertise – which is the Multiplay team – to aid us in getting to more gamers, with the majority of those being PC gamers.

eSports has struggled to generate financial investment, particularly in the UK. Is this changing? And what role can GAME play in that?

Fletcher: It is about legitimacy. Back in the Wild West days of eSports, we had a number of sponsors burned by organisations that promised lots but delivered nothing before disappearing. That left the rest of us to just pick up the pieces. We’ve reached a point now where you have people taking it very seriously, because the user numbers that are involved in some of these big tournaments cannot be ignored anymore. In the past it was easy for people to say: ‘Oh this isn’t a real thing, we don’t have to worry about that’. But now they can’t reach this audience via any other method. These consumers don’t watch much TV. If you want to reach them then you have to be on Twitch and the other streaming platforms.

I have a slightly different definition of eSports: the moment you press play in a multiplayer game… that’s eSports. It’s not just about being the top of the Premier League, it is also about the kick around in the park and everything in-between. There is a huge market for people who would just like to get a bit of competitive action going with their mates, and the GAME store is a great venue for that. Barcraft [pub nights which gamers attend to watch Starcraft eSports matches) is something that has cropped up throughout the UK – that is people actively looking for venues to watch eSports. So there is a lot of opportunity for growth. It’s such a huge market and the engagement is going to show a lot of reward for those involved.