The following also ran in The Daily Payoff
This past week the two phenomena chasing the sports and entertainment industry, eSports and Daily Pay fantasy, came crashing into each other as both DraftKings and Fan Duel announced deals or initiatives to put themselves into the space, and Turner and IMG/William Morris Endeavor announced their own deal to create a “league” in the space.
At the same time another startup in the melded world of ESports Fantasy was making their case at the OnDeck Sports Conference in New York. It is Vulcun, an up and running esports Fantasy business run out of the Bay area.
Vulcun allows you to win money playing daily fantasy eSports on titles like League, DOTA2, CS:GO, CoD and more. To date this year Vulcun has distributed over $7 million in prizing to 150,000+ winners. We caught up with Ed Chang is the VP of Business Development at Vulcun to talk about the space, the opportunity and where it is going.
Vulcun appears to have seized a suddenly very hot niche, what is the value proposition offered vs. the larger traditional daily fantasy companies entering the market? What makes you work better?
I believe that we understand eSports better than the other large players. We understand that it’s not as simple as duplicating the fantasy football or basketball playbook. We’ve also managed to nail down the community part much better than the others and it shows in the amount of engagement on our different properties at all times.
Egaming is very much not the traditional sports play. Why would fantasy egaming work?
Why wouldn’t it? Anytime there’s actionable stats there’s the potential for fantasy. Each game has kills, assists, deaths and its own unique stats like flag captures, minions killed, gold spent, mana crystals unused, damage per round, etc. Not to mention the worldwide appeal of eSports, with huge fan followings and hundreds of millions of eyeballs
How is the audience different from say, football or baseball fantasy? Younger, global?
Generally 18-34 year old males. eSports is truly global, as opposed to sports like American Football (huge in the US), soccer (bigger in Europe and South America), etc. Also, eSports world championships (like the League of Legends World Championships, The International for DOTA2, Majors for CS:GO) bring the best from all around the world and happen yearly.
Who are the players and properties people should watch for?
Currently the top eSports are League of Legends, Counter-Strike:Global Offensive, DOTA2 and Hearthstone. Titles to keep an eye on are Call of Duty:Black Ops 3, Halo 5 (both studios are making huge investments in eSports in 2016), Vainglory (first mobile game in my opinion that has a chance to be an eSports) and Rocket League (just really fun).
Is there a worry that a young audience would not have the access to cash that a traditional Daily Pay Fantasy player would have?
The demographic that DFeS has is very similar to DFS. At the end of the day, with the DFS model you’re reliant on a small group of whales/sharks (those losing and winning lots of money on the platform) and an ocean of fish (people that play infrequently or rarely in small amounts).
There is a misconception that “egaming” is one entity, when in reality it is more like the Olympics. Fans of DOTA don’t play or follow World of War Craft, like skating fans may not follow skiing. How do you scale egaming fantasy as a business with that in mind?
eSports is also like your Olympics example, where when I’m sitting on the couch watching and figure skating is over and curling is on, I’ll watch some of it. Sometimes, hockey comes on instead and I’m hooked. Anecdotally, I’ve seen us be able to convert League of Legends into Call of Duty fans because League isn’t in season and they want something to play. With our digital skins stuff we’re doing, we’ve gotten thousands of users to purchase Counter-Strike because they’ve won items and wanted to see what the fuss is about.
What are some of the success stories in egaming fantasy? Whats games have seen an uptick in fantasy?
Earlier this year we had the first $100k DFeS winner and today we have many. We’ve given . One semi-surprising game that we’ve seen surprising numbers on is Call of Duty: Advanced Warfare. It’s a huge franchise, but most of the anticipation is for Black Ops 3 coming out, and the MLG league was the only one that was running, but numbers have been great.
You talked about owned currency and the purchase of items by fans. That is something that traditional fantasy does not have. How does that factor into the value of running an egames fantasy business?
It allows us to do a lot more. As our focus shifts beyond being a one-trick DFeS pony, we’re in a world where we can give rewards that are arguably more valuable than cash without dealing with supply chain or shipping and handling issues. We’re getting closer and closer to our goal of being a platform making eSports 100X more fun.
Has a lot of research gone into seeing if the fans want to play fantasy or is it more anecdotal at this point?
I’m not sure the method to the madness that Ali and Murti (co-founders of Vulcun) used to arrive to the conclusion of building the FanDuel/Draftkings for eSports in the first place but our numbers back up our funding and the hype. One of our core company values is speed – speed in building products, speed in getting things done and also speed in quickly figuring out if something’s working or not.
What is the esports fantasy market now vs. where you think it will be in two years, and why?
According to this report it’ll be $20mm in entry fees on 600,000 users. I think it has the potential to be 5-10x as big, due to current eSports growth numbers and the entrant of big players.
What do you think about the Turner announcement this week? Do you think egamers will actually migrate back to broadcast after so many have said that platforms like Twitch are where the fans are?
I think most people who have been involved in eSports long enough have a similar approach – cautiously optimistic. We’ve been here before and we’ve been burned before with DirecTV and the CGS. I think it’ll be difficult to bring gamers back to broadcast — all industry studies show that the younger generation is cutting the cord. Less than 10% of my friends currently pay for cable and I think that number will continue to trend downwards and I don’t think 2 10-week CS:GO seasons a year is enough to convince someone to shell out $50+ a month.
Lastly for Vulcun, what would make for a successful business story a year from now?
We’ve successfully transitioned into an end-to-end eSports platform. And we buy DraftKings.
