Online eSports and gaming competition operator Emerge Gaming (ASX: EM1) is set to make a foray into South Africa after signing a two-year agreement with Africa’s largest telco Mobile Telephone Networks (MTN) to distribute, market and operate its platform technology under the brand ‘MTN Arena’.
The move is part of a broader ambition of commercialising the rapidly emerging eSports market that is generating annual revenues of around US$500 million (A$728 million) per year and projected to hit US$1.5 billion (A$2.2 billion) this year.
MTN is a South African multinational mobile network operator listed on the Johannesburg Stock Exchange, wielding more than 250 million subscribers in 22 countries in Africa and the Middle East with a market capitalisation of approximately A$8.4 billion.
The deal means Emerge Gaming will provide MTN with its proprietary Arcade X platform to host competitions and tournaments online. With end-to-end testing now completed, the platform is set to go live “during June 2020”, the company said.
Online tournaments comprise regular competitions including mobile gaming events offering prize money. Additionally, a variety of grand prizes will also encourage mobile gamers to engage for longer periods on the platform.
Emerge Gaming said prizes available via MTN Arena will be distributed via MoMo, MTN’s “mobile money” service, a means of allowing smartphone users to store, send and receive money with their devices.
The service currently has 35 million active users conducting around 9,200 transactions per minute and bringing total transaction value to US$96 billion (A$139 billion).
Emerge Gaming said the competition and prize features of its platform constitute the “cornerstone” of its marketing content with the MTN collaboration now on course to develop a corporate identity and digital platform user interface consistent with MTN’s products and other MTN-branded gaming content.
Under the terms of the agreement, Emerge Gaming has agreed to develop a customised version of its Arcade X platform under the MTN brand and will hence receive a proportion of net revenue generated by MTN Arena.
Meanwhile, MTN intends to market and distribute the platform through direct SMS marketing, promotional initiatives, advertisers and listing on the MTN customer portal.
MTN has committed to funding marketing support and prizes for the first 12 months of the agreement while Emerge Gaming is expected to operate and monitor the platform, design, plan and adjudicate tournaments, issue prizes and manage engagement with MTN Arena subscribers.
Emerge Gaming’s toolkit integrates social integration and is designed to entice casual gamers to the concept of online gaming and eSports in general.
Additional features such as prize giveaways, raffle tickets and communal online gaming events for casual games intend to generate an “entertainment factor”, enabled by spirited content that encourages re-engagement and longer lifetime values of subscribing gamers, the company said.
In a statement to the market, Emerge Gaming confirmed MTN Arena will be discoverable on MTN Play, MTN’s traffic driven subscriber portal for the distribution of its content and will further be marketed on other MTN digital channels including social media.
“After two years of nurturing our relationship with MTN, product planning and product development we are now the exclusive MTN Mobile esports provider,” Emerge Gaming chief executive officer Gregory Stevens said.
“Leveraging MTN’s significant marketing support, we are fully funded to launch the product. We have worked extremely hard in developing a trendsetting eSports and gaming technology offering that leverages global Mobile eSports and gaming trends,” he added.
Importantly, Mr Stevens also said COVID-19 had “accelerated the interest in fresh and entertaining mobile gaming content” with global lockdowns increasing mobile usage significantly in recent months.
The comments again highlight the ability of some technology niches such as gaming and eSports to remain commercially resolute despite crushing macroeconomic conditions for most other sectors.
Emerging in eSports
Currently, Emerge Gaming operates Arcade X to create skill-based tournaments, series and live matchmaking, where players compete in sponsored tournaments to establish rankings, win prizes and earn participation rewards.
Earned rewards can be utilised to enter raffles for more prizes, as well as purchase and trade physical merchandise and digital assets.
On several occasions, Emerge Gaming has stated that Arcade X offers players a “unique and mature” gaming experience as well as offering a “hybrid environment that offers access to both casual and eSports gaming titles”.
“It is without a doubt going to change the way the corporate world and gaming world engage in the future,” it said.
Emerge Gaming is also looking to attract gamers from emerging markets as a priority. The company said MTN Arena will, therefore, be differentiated from typical subscription-based casual gaming content offerings with competitions on premium app and premium HTML5 games that do not require downloads and can be streamed to mobile devices instead – an important caveat in emerging markets.
Other tools created to encourage subscriptions include a one-click activation sign-up process, more straightforward admin and dynamic image-rich landing pages to allow greater numbers of people to access MTN Arena, thereby “allowing multiple marketing campaigns targeting multiple target markets in parallel”.