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Kuuhubb To Enter Esports Gaming Market; Targets Female Market To Generate Share of Multi-Billion Dollar Revenue Opportunity

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Kuuhubb To Enter Esports Gaming Market; Targets Female Market To Generate Share of Multi-Billion Dollar Revenue Opportunity

May 05
08:24 2020

Kuuhubb (OTC: BCDMF, TSXV: KUU) is aiming to become what the company terms “a casual esports game developer.” But, don’t underestimate the term casual in their motive. Kuuhubb’s new and emerging competitive gaming segment is being designed to compete with some of the biggest names in the space, like EPIC, Activision Blizzard (Nasdaq: ATVI), and RIOT. And, with billions of ad dollars up for grabs and with investors eyeing esports investment opportunities in the public markets, the value proposition in Kuuhubb can be compelling.

Research by GlobalData supports Kuuhubb’s decision to enter the lucrative gaming space. According to a published report, both gaming and esports are growing at a rapid pace, with much of the growth spurred by a spike in consumer demand, new and efficient distribution strategies, and emerging technologies that can create market opportunities for agile and innovative companies like Kuuhubb.

And, with Kuuhubb already having a development model that can quickly adapt to changes in consumer demand and preference, the company appears ideally tooled to seamlessly enter the esports segment. Thus, despite the company’s micro-cap stature, investors shouldn’t rule out their ability to play with the big guys in the space, especially with Kuuhubb showing they can already deliver Top 10 ranked games with Recolor. Moreover, with a focus toward the more than one billion gamers in the female market, Kuuhubb may be able to take advantage of an underserved esports opportunity.

Esports Global Market Surpasses One Billion Dollars In 2020

Kuuhubb is entering a global esports market that has been on a significant uptrend. Newzoo, a games and esports analytic firm, forecasts that the worldwide esports market will likely top $1 billion for the first time during 2020. According to their most current data, players in China are leading that growth, followed by those in North America, who have contributed to a year-over-year growth rate expected to eclipse 15%.

In terms of revenue, Newzoo expects that the Chinese market will deliver roughly $385 million in 2020 revenues, followed by North American players contributing an estimated $252 million toward the $1 billion total global contributions. And, that revenue may find a new channel for growth from the recent attention given to the online streaming market due to the COVID-19 pandemic.

Notably, access to online esports events is becoming more mainstream. Online platforms, like Twitch, which is owned by Amazon (Nasdaq: AMZN), and YouTube, an Alphabet (Nasdaq: GOOGL) company, are helping to bring events straight to the consumer by allowing esports streamers to broadcast game-play. Sector analyst, Influencer Marketing Hub, cited data from TwitchTracker, which shows Twitch seeing a more than 116% increase since 2016 in the number of people who watch live streams, with the 2019 totals showing a jump to more than 1.28 million watchers.

That jump is attracting advertisers, and the bid for online ad space may heat up.

Advertising Is A Big Game In esports

Another report from GlobalData expects that streaming platforms and esports companies are likely to benefit from the sector’s strong growth. Advertising from corporate giants like Intel have not shied away from the esports opportunity, and have been actively hosting live esports events for years. Moreover, despite the market’s unexpected shift toward a more online presence due to COVID-19, advertisers are showing their willingness to increase their online ad buys.

Furthermore, they appear to be allocating a portion of their planned ad spending at in-person tournaments to the almost forced online broadcast. That shift, though, can act as a two-edged sword by benefiting the online streamers at the expense of the tournament organizers. But, the move toward online ad purchasing can help online-based providers, like Kuuhubb, as they develop their niche in the sector.

Moreover, ad purchasing by major companies isn’t expected to dry up. Supporter’s of the esports market include Intel, the U.S. Air Force, Pepsi, Comcast, and Mercedes Benz. These companies not only advertise, but many of the world’s largest companies are now sponsoring leagues such as the ESL, the League of Legends, and the Overwatch League. And, these companies are expected to stay involved.

Reports from McKinsey & Co. indicated that esports could be an attractive branding opportunity thanks to the interactivity of live-streaming. They also noted that because the ads are few, the opportunity for companies to purchase significant ad space creates a massive branding and recognition opportunity. Additionally, they wrote that similar to in-person events, streamers are willing to wear, consume, and endorse sponsors’ products while broadcasting. However, while ads may be few now, the market is expected to heat up as demand spikes from a lack of in-person events. And, the rise in demand will likely affect ad pricing, which can benefit the online companies.

Finding The Emerging Gems

While the giants of the industry grab most of the esports sector attention, the shift toward online streaming may benefit smaller companies that have a more agile ability to adapt to fast-changing consumer demands. Admittedly, COVID-19 has upended the industry, but it has also exposed the opportunity from shifting the model toward a more online approach.

And, if the benefits of an online event get proved, more nimble companies, like Kuuhubb, may be able to seize an advantage. Moreover, with Newzoo reporting that in the third quarter of 2019, the top 10 public companies by games revenue made a combined $21.5 billion, the opportunity can be massive. No doubt, however, Kuuhubb needs to be smart in its approach, especially when playing against companies like GOOGL, Take-Two Interactive (Nasdaq: TTWO), Apple (Nasdaq: AAPL), and Tencent (OTC: TCEHY).

But, despite competing against major brands, Kuuhubb is poised to find its place through innovation, its strategy to focus on a female market that is estimated to be a one billion person opportunity, and from developing highly engaging and cross-genre games that are attracting and building loyalty from its user base.

And, with Kuuhubb having an inherent ability to add content to already published games daily, they may be able to leverage their more than seventy person team to effectively navigate the barriers of entry to the esports sector. An even bigger advantage to the smaller Kuuhubb is that they may be able to navigate the changing esports market more efficiently than larger players. Thus, by taking advantage of speed, Kuuhubb may enjoy an ability to quickly shift strategy as the esports community faces uncertainty in its direction as a result of COVID-19.

Hence, being bigger is not necessarily better. And, in the battle for viewership, Kuuhubb’s compelling content and vibrant graphics may add a unique advantage for Kuuhubb to develop its esports ambitions toward its female-oriented user base.

Kuuhubb’s Esports Market Opportunity- Targeting Female Gamers

Keep in mind, too, Kuuhubb is almost exclusively targeting a vast female audience. It’s a strategy that may add to the potential long-term success of Kuuhubb’s emergence into the lucrative esports market.

Few are arguing that the esports sector is not a multi-billion dollar revenue-generating opportunity. The argument does arise as to who and how each company can carve its share of that prize. What may be interesting to note is that the timing of Kuuhubb’s entrance into the market may be a fortunate coincidence, albeit from a highly unfortunate event.

The COVID-19 pandemic may have changed the rules of esports marketing and development. And, unfortunately, the epidemic may shake out some of the companies that led the industries growth. Large bets made toward in-person events may cause some organizers to close their doors. Conversely, large stakes and new positions made by companies focused on online experiences and live-streaming events are likely to benefit in the near term.

But, what remains to be seen is if the shift toward online streaming can become as lucrative a proposition as in-person events. If it indeed proves to be a viable alternative, the opportunities provided can be substantial to those companies already positioned as an online developer and provider of games.

And, with many industry analysts suggesting that online events may become a viable contender to its in-person counterpart, Kuuhubb may be well-positioned for both near and long-term growth based on their experience to develop and launch online gaming experiences. Moreover, in a market where bigger may not necessarily equate to being better, Kuuhubb, with its entrance into the esports market, may present a value-based investment opportunity in a market that is earning worldwide attention.

Sources:

https://store.globaldata.com/report/gdtc0186ir—decoding-the-egaming-esports/

https://newzoo.com/insights/trend-reports/newzoo-global-esports-market-report-2020-light-version/

https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-keys-to-esports-marketing-dont-get-ganked

https://newzoo.com/insights/articles/top-10-public-game-companies-earned-21-5-billion-in-q3-2019-alone/

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