You’ll occasionally hear of business valuations and investments that just amaze and seem almost preposterous considering their scope. Think Uber in 2011 with $49 million raised; Amazon paying nearly $1 billion for Twitch, and most recently, a company named Unikrn who somehow managed to raise $10 million for their company where people bet on the outcome of video game matches. Two years ago, if you had told me betting on video games was going to be a reality, on any scale that wasn’t just a fringe movement, I would have laughed you out of my office.
Now it’s two years later and the only one’s who are laughing have $10 million and powerful backers such as Mark Cuban on their side. Their name is Unikrn, pronounced ‘Unicorn,’ and they’re attempting to monetize eSports in a way that no one has to this point. While companies such as Twitch and Google are attempting to use eSports as a viable business strategy through conventional means such as ads, (which of course is undeniably successful) Unikrn is attempting to merge gamblers and the eSports model to create a unique service that is closest in service offerings to the companies that offer betting on fantasy sports.
Since 2010, over 30 million Americans a year have spent an estimated $11 billion annually on fantasy sports and betting that they can predict the outcome. But what about eSports? Currently, 21% of the entire United States engages in non-traditional forms of gambling. This includes gambling that is not confined to casinos, slot machines, and convenience store lotto tickets. These gamblers are constantly looking to expand their gambling, and Unikrn might just be the service for them. But what about the general market for video game watchers? At last count, Twitch had over 45 million subscribers who watch in excess of 200 million hours of content a month. With that kind of viewing power, Twitch is currently the fourth heaviest trafficked site on the web.
But does it translate into a viable business model? Investments and a large following don’t necessarily translate into sales. And with the gambling industry already under heavy scrutiny and regulation, Unikrn might have a tough time convincing people that they’re worth a bet. Will I be using this service? No, I won’t. Not because I disagree with gambling, but rather because I choose to spend my time creating content, not watching it. But then again, I wouldn’t bet against Unikrn. Chances are the house will win.
