Market Overview

eSport Tournaments Draw Viewers From Around the Globe

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NEW YORK, July 23, 2019 /PRNewswire/ --The idea of being able to play your favorite video game while potentially earning money has inspired many children and young adults around the world to hone their craft. Being at the top of the industry can net a person millions of dollars in revenue each year based on popularity, winnings, sponsorships, and brand deals. For example, professional Danish Dota 2 player Johan Sundstein has achieved approximately USD 3.8 Million in winnings. Notably, Sundstein is the original founder and captain of OG, an eSports team that won USD 25 Million from The International 2018 Dota 2 tournament. While becoming a top competitive player requires serious dedication and time commitment, there are many other players who have also achieved fame because of their personality or their early entry into the market. Recognizable players such as Timothy "Timthetatman" Bater and Michael "Shroud" Grezesiek have gained a reputation through Twitch, a popular streaming platform. The two streamers began streaming at an early stage and have since risen to the top. While the two have competed professionally in various tournaments, it is estimated that they net most of their earnings via Twitch as well as sponsorships. According to Mediakix, based on Twitch metrics, Timthetatman nets approximately USD 2.7 Million a year. Meanwhile, Shroud previously played competitive Counter Strike for eSports team Cloud9, but since his retirement from the professional scene, Shroud has now become a full-time streamer. It is estimated that Shroud nets approximately USD 3.19 Million per year. Overall, the eSports industry is a diverse marketplace that appeals to both high-ranking competitive players and casual players. Regardless of the market appeal, both spectrums of the industry are growing at an astonishing rate because of its rising publicity. According to data compiled by Infoholic Research, the global eSports market is expected to triple by 2025, reaching a value of USD 3 Billion. Additionally, the market is expected to exhibit a CAGR of 20% during the forecast period from 2019 to 2025. UMG Media Ltd. (TSXV:ESPT), Caesars Entertainment Corporation (NASDAQ:CZR), Nintendo Co., Ltd. (OTC:NTDOY), Zynga Inc. (NASDAQ:ZNGA), Enthusiast Gaming Holdings Inc (OTC:EGHIF) (TSXV:EGLX)

2019 has already become a lucrative year for professional gamers. For instance, Epic Games announced a USD 40 Million prize pool money for its first ever Fortnite World Cup. Through investments and fundraising, Epic Games was able to hold to one of the largest tournaments in eSports history. During the qualifier stages, Epic Games paid out a total of USD 1 Million to top players. And for players that make it past the qualifiers, they have a chance to compete for the grand prize of USD 40 Million. Moreover, Dota 2's The International tournament made headlines recently after Valve announced that the prize pool will be more than USD 30 Million, smashing its previous record-breaking payout of USD 25 Million. The majority of the prize pool money is derived from crowdfunding. While sponsorships and brand deals are projected to account for a substantial amount of the revenue within the eSports industry, one top industry expert believes that main revenue driver will come from businesses that are centered around the fans. Steve Arhancet, Owner and Chief Executive Officer of Team Liquid, believes that businesses will invest into gaming companies because of the large, and growing, fan base. Newzoo's eSport research study highlighted that each viewer is projected to bring in around USD 5.45 in revenue per capita this year among a total projected audience of 454 million. Despite the large audience, businesses are more than likely to invest into an organization that is at the top of the leaderboard. In return, organizations can use the investments to recruit more professional players. Likewise, gaming companies have also invested some of their revenues back into the company to promote tournaments for players and viewers. For instance, Riot Games, creator of League of Legends, and Valve have released special in-game items that players can purchase. Ultimately, the revenue generated is funneled back into tournaments to provide players with a larger prize pool. "That is what will eventually drive revenues. You want to be able to invest in [companies and brands] that can generate substantial revenue in [the] future, so ask yourself: Who owns that fan relationship?" Arhancet told CNBC. "You can say that the gamer is playing the game and they have developed [a] relationship with the game, but I would argue that the teams have the biggest arsenal to create that relationship and drive revenue per capita." 

UMG Media Ltd. (TSXV:ESPT) provided earlier last week an update, "on its operations. The Corporation announces that it will commence trading on the TSX Venture Exchange today, July 19, 2019, under the trading ‎symbol ESPT. UMG is also pleased to provide an update on its operations.

UMG continues to expand its esports original content business. Through its distribution channels UMG continues to expand its user base. UMG produces and distributes the following on going series at its studio in St Louis:

Minecraft Mondays

Emergence Days - Gears of Wars

Keemstar Fridays

Call of Duty Weekly Rumble

With notable streamers such as Ninja, NICKMERCS, PewDiePie,and DrLupo, UMG is proud to announce that they have generated in excess of20,000,000 live views on their platforms of its broadcasts.

UMG's user base continues to grow, in the second quarter of 2019 the registered user base has increased by 70,000 to over 2,200,000. The increased user base has added to the daily tournaments played through the UMG network. Over 18,000,000 matches have now been played through the UMG platform. The matches include daily tournaments, season ladders and individual cash matches. The majority of the matches played on the site are cash based. From these matches well over $3,000,000 in prizes have been paid out.

UMG is also excited about a number of the upcoming and recently completed live events. UMG has plans to broadcast a portion of the weekly Keemstar Friday Series live from various locations in the United States including Las Vegas.

About UMG:  UMG is a premier esports company in North America. UMG has operations involved in live tournaments, online esports contests, casino esports ‎operations, creation and distribution of original content and esports tournament operations through ‎its proprietary tournament management app. Readers can learn more about UMG and its esports ‎offerings at www.umggaming.com‎."

For our latest "Behind the Buzz" Corporate Snapshot Show featuring UMG Media Ltd., please head over to: https://www.youtube.com/watch?v=BAXCXDHsAR4

Caesars Entertainment Corporation (NASDAQ:CZR) is one of the world's most diversified casino-entertainment providers and the most geographically diverse U.S. casino-entertainment company. Caesars Entertainment and University of Nevada, Las Vegas recently announced the creation of "Black Fire Innovation," a technology hub where new gaming and hospitality concepts will be created and tested in a 43,000 sq. ft. innovation space that will include elements of mock hotel rooms, a casino floor and sportsbook, an esports arena and virtual reality facilities. Black Fire Innovation brings the university's academic leaders and Caesars Entertainment, one of the world's most diversified casino-entertainment providers, together in one space to advance current trends in hospitality and gaming technology to propel the industry forward. The complex is expected to open by the end of 2019. Black Fire Innovation will be headquartered in a state-of-the-art research building in the UNLV Harry Reid Research & Technology Park located in southwest Las Vegas. Expected to open later this year, this multipurpose space will allow UNLV, Caesars and partners to develop and test new concepts using a mock integrated resort environment. Elements of mock hotel rooms, a casino floor with slots and table games, presentation/exhibit areas, sports book, esports arena and virtual reality facilities will be used to host on-demand testing of new ideas and products and provide a venue to showcase innovations to current and potential industry partners. "We intend to accelerate innovation in a way that is truly unprecedented within the gaming and hospitality space, bringing together top researchers and industry experts in a unique collaborative environment," said Les Ottolenghi, Caesars Entertainment Executive Vice President and Chief Information Officer. "Working side-by-side and with emerging student talent, technology partners and the community through this technology hub, Black Fire Innovation is designed to spur the creativity and entrepreneurship that will shape the future of our industry for many years to come."

Nintendo Co., Ltd. (OTC:NTDOY), the worldwide pioneer in the creation of interactive entertainment, Nintendo Co., Ltd., of Kyoto, Japan, manufactures and markets hardware and software for its Nintendo Switch™ system and the Nintendo 3DS™ family of portable systems. Recently, Nintendo introduced Nintendo Switch Lite, a device designed specifically to play Nintendo Switch games in handheld mode. The Nintendo Switch Lite system launches Sept. 20 at a suggested retail price of USD 199.99 and will be available in three different colors: yellow, gray and turquoise. A carrying case and screen protector set for Nintendo Switch Lite will also be available. Nintendo Switch Lite has integrated controls and is smaller than the flagship version of Nintendo Switch. It has no kickstand and, as a dedicated handheld gaming device, does not support video output to a TV. Therefore, it does not come with a dock or HDMI cable. The new device can play all games in the robust Nintendo Switch library that support handheld mode, although some games will have restrictions. Compatible game modes will be listed on the back of game packaging and in Nintendo eShop. "Adding Nintendo Switch Lite to the lineup gives gamers more color and price point options," said Nintendo of America President Doug Bowser. "Now consumers can choose the system that best suits how they like to play their favorite Nintendo Switch games."

Zynga Inc. (NASDAQ:ZNGA) is a global leader in interactive entertainment with a mission to connect the world through games. Zynga Inc. recently released its financial results for its first quarter ended March 31st, 2019. In Q1, Zynga delivered revenue of USD 265 Million, above its guidance by USD 25 Million and up USD 57 Million or 27% year-over-year from strong bookings growth offset by a significant increase in deferred revenue. Bookings were USD 359 Million, beating its guidance by USD 34 Million and up USD 140 Million or 64% year-over-year. These better than expected results were driven by outstanding performances from Merge Dragons! and Empires & Puzzles, as well as strong contributions from CSR2, Words With Friends and Hit It Rich! Slots. "Zynga is a leading mobile-first, free-to-play, live services company on the largest and fastest-growing gaming platform. We are uniquely positioned to capitalize on the rapidly evolving gaming landscape at a time when demand for interactive digital experiences is reaching new highs. We are pleased to have begun 2019 with tremendous momentum and we remain focused on executing on our multi-year growth strategy to further scale the business and drive significant topline growth and margin expansion over the coming years. We are excited and confident in our ability to generate more value for players and shareholders." said Chief Executive Officer Frank Gibeau and Chief Financial Officer Ger Griffin in a letter to shareholders.

Enthusiast Gaming Holdings Inc (OTCQB:EGHIF) (TSXV:EGLX) founded in 2014, is the largest vertically integrated video game company and has the fastest-growing online community of video gamers. Enthusiast Gaming Holdings Inc. recently announced that Luminosity Gaming, one of the largest and most successful esports organizations in North America, has officially entered the popular Ubisoft video game title, Rainbow Six Siege. Luminosity has signed "92 Dream Team," the current first-place team in the North American division of the Rainbow Six Pro League. The announcement aligns well with Enthusiast's recent partnership with Ubisoft Canada to host the Rainbow Six Canada Nationals and bring the Ubisoft show floor activation to Enthusiast Gaming Live Expo (EGLX) in October 2019. Presented by Ubisoft Canada and powered by Enthusiast, the Rainbow Six Canada Nationals kicked off in June 2019 and conclude in a live finals at EGLX 2019 on October 20, downtown Toronto at the Metro Toronto Convention Centre. Menashe Kestenbaum, Chief Executive Officer of Enthusiast commented, "We continue to realize synergies between Enthusiast and Luminosity which will be beneficial for the growth and success of the merged entity. The ability to attract top talent and leverage partnerships across the entire network will help increase reach and monetization opportunities." He continued, "We look forward to working with the Luminosity team on future synergies for growth across our online platform and various events including EGLX this fall."

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