eSports embraces subscription model as Covid decimates in-person events

eSports facilities providers have long been searching for the right business model – a feat made more challenging by Covid-19. Now one eSports company is following the likes of Netflix Inc and Inc into subscriptions.

As the pandemic lockdowns hit, Nerd Street Gamers shut down all its eSports facilities between March and July and vastly expanded the number of online esports tournaments it offers to stay afloat. The bet has paid off, said chief executive officer John Fazio, with the company posting some year-over-year revenue growth.

Wednesday, Nerd Street is introducing a US$20 (RM82)-a-month subscription service, called Nerd Street+, that offers gamers access to live and online tournaments and monthly training time at facilities around the country. Nerd Street operates five locations – ranging from 2,000 to 40,000 square feet in size – in places like Philadelphia and Denver. An outpost in Los Angeles is coming online in the first quarter. The locations are outfitted with US$2,500 (RM10,262) PCs, US$500 (RM2,052) gamer chairs and gaming systems like PlayStations and Xboxes.

The subscription also offers access to partner facilities such as Esports Stadium Arlington.

“We’ve unified the power of the venues across the country,” Fazio said.

Subscribers will also get discounts on larger monthly tournaments and camps for games such as Fortnite and Call Of Duty. The service is expected to be offered at a discount to students.

The subscription offer comes as eSports continues to go through major adjustments. While streaming is booming, live events and in-person gatherings at training facilities remain severely restricted amid the Covid-19 pandemic. Nerd Street is limiting most facilities to 10 people or fewer while some facilities are shut down.

The pandemic has also slowed down Nerd Street’s plans to build 50 larger regional and university-based facilities, Fazio said. The company has raised venture funding from Comcast Corp and Five Below Inc.

With the business model still evolving, a growing number of eSports companies are experimenting with different ways of trying to generate new streams of revenue online. For the time being, Nerd Street is in effect competing more against online services like Amazon’s Twitch, said David Cole, founder of researcher DFC Intelligence. “I do know it is a big opportunity and really hard to pull off because so many people are doing it,” Cole said.

The number of Nerd Street’s active customers rose from about 8,000 people at the beginning of the year to more than 30,000 currently, Fazio said. Many of the users are high-school students and young adults, training to improve in order to get scholarships or to become professional gamers. Some also use the facilities for remote learning if they lack the…

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