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Speaker 1: This is the Bloomberg Business of Sports show, where we

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Speaker 1: explore the big money issues in the world of sports.

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Speaker 1: I'm Michael Blough, I'm Scarlett, and I'm Mike Lynch. Today

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Speaker 1: we're taking a dive into the metaverse, talking all things

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Speaker 1: e sports with Super League Gaming chairman and CEO and

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Speaker 1: hand and welcome to the show. Well, thank you for

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Speaker 1: having me, you know, and I'm not gonna lie. I'm

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Speaker 1: I'm kind of that old geezer guy. And thank god

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Speaker 1: for my seventeen year old son who had to school

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Speaker 1: me on what metaverse was all about. Take us through

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Speaker 1: the people who may not know what metaverse is that

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Speaker 1: are my age and if you can explain it to him, yeah, absolutely. Um.

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Speaker 1: You know, if you think about it these days, you know,

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Speaker 1: forty six percent of gen z say they prefer digital

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Speaker 1: hangouts to physical ones. Um, increasingly, we're spending more and

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Speaker 1: more of our time in in a digital world. And

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Speaker 1: the beautiful thing there is is that it's a highly

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Speaker 1: creative world. Um, there's loads of self expression in it.

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Speaker 1: You can kind of create your aspirational self. But also

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Speaker 1: now what's starting to emerge is is it's not just

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Speaker 1: a place for self expression and ways to make friends

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Speaker 1: and build relationships. But it's also becoming a really powerful

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Speaker 1: place for commerce as well, and so we see that

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Speaker 1: that intersection of digital and physical worlds, whether it be

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Speaker 1: for brands, um retailers, but also just for the individual themselves.

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Speaker 1: The other cool thing about the metaverse is it's totally

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Speaker 1: empowering and democratized. Everybody can produce content in it, whether

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Speaker 1: you're designing cool games that you want to invite your

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Speaker 1: friends into play, or just creating other neat content that

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Speaker 1: you want to share on your social media or other places.

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Speaker 1: So it's this kind of beautiful, empowering world. And I

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Speaker 1: think another powerful way to think of it is is

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Speaker 1: to not almost think of it as something different than

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Speaker 1: your physical life. It's just another form of your world.

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Speaker 1: And if you ask again a typical gen z or,

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Speaker 1: they don't delineate the difference between their digital and physical selves. Um,

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Speaker 1: it's all kind of one life, much to the frustration

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Speaker 1: of their Gen X parents who don't quite get what's

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Speaker 1: going on. Um, can you fold in E sports into

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Speaker 1: the metaverse? Because we understand E sports and we know

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Speaker 1: that it's still early days in e sports, So walk

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Speaker 1: us through what that looks like in the metaverse and

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Speaker 1: what will look like in say, one year's time. Yeah,

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Speaker 1: so it's really uh, you know, first of all, I've

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Speaker 1: we've been in the area of the sports for about

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Speaker 1: five six years now, and often with investors, I'll say, look,

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Speaker 1: if the word is getting in the way because it

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Speaker 1: sounds like a niche or fad, then then just let's

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Speaker 1: rebrand it. Let's call it competitive video gaming. And what

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Speaker 1: it's really about is the thank you that is so

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Speaker 1: much more clear. By the way, there's three billion gamers

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Speaker 1: on the planet. There's about ten thousand or so that

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Speaker 1: are professionals. Um. They're either professional players playing for teams,

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Speaker 1: like just like the players in the NBA are paid

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Speaker 1: full time salaries, or their professional influencers, streamers, you know,

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Speaker 1: celebrities in their own right, um, and they make their

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Speaker 1: full time living off of it. What super leagues always

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Speaker 1: been about is empowering that next tier down of like

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Speaker 1: a classic pyramid. And so we're really focused on what

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Speaker 1: we call that avid gamer. So that's somebody who plays

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Speaker 1: about eight hours a week of gameplay at least as

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Speaker 1: a floor, um, but on top of it, they are

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Speaker 1: watching another nine hours or more of gaming centric content

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Speaker 1: and in many cases they are streaming and sharing their

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Speaker 1: gameplay content too as well. So when we talk about

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Speaker 1: the sports real specifically UM, what we do in the

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Speaker 1: sports landscape is we give tools to those people in

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Speaker 1: the middle of the pyramid for them to create their

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Speaker 1: own UM gameplay experiences tournaments for their friends, so they

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Speaker 1: can they and spin up gameplay and leagues. They can

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Speaker 1: also use our tools to stream their competitive video gaming

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Speaker 1: content to all their social channels, and as well, we

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Speaker 1: have a creator economy in it. So as they're streaming

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Speaker 1: their their e sports gameplay UM you know, posting highlights

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Speaker 1: to to their different channels, or live streaming say on

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Speaker 1: their Twitch and Instagram channel through our tools, if they

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Speaker 1: participate in our ad economy, they can also UM get

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Speaker 1: a share of the revenue. So really at its heart

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Speaker 1: for super League, you know, we're really UM. We use

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Speaker 1: e sports and competitive tournaments as just one way to

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Speaker 1: engage UM with players with a community and to build

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Speaker 1: community UM. And and the big kind of crux of

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Speaker 1: the company is where at the intersection of a creator

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Speaker 1: economy gaming centric content in the metaverse. Hi, and this

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Speaker 1: is Mike lynch up in Boston. So who is your

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Speaker 1: average game. UM, I don't maybe speak in the demographic terms. Yeah, yeah,

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Speaker 1: we really have two core demographics. UM. We talk a

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Speaker 1: lot about our young gamer network, and that is a

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Speaker 1: unique foothold that we have. We in a very safe way,

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Speaker 1: have built owned and operated and metaverse platforms that speak

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Speaker 1: to millions of under eighteen players. Those are predominantly Minecraft

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Speaker 1: players up until recently with an acquisition of a company

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Speaker 1: called block Spiz, where we now in the month of

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Speaker 1: October alone reached um had access to reach up to

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Speaker 1: sixty million Roadblocks users and that's about thirty of all

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Speaker 1: Roadblocks choosers, so that under eighteen demo. It's it's really

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Speaker 1: kind of the sweet spots about a twelve to sixteen

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Speaker 1: year old. They're an advanced player in in Minecraft and

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Speaker 1: Roadblocks UM. They're creating their own gameplay, and again we

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Speaker 1: believe over time will turn into those up and coming

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Speaker 1: more competitive older players and streamers as well. We also

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Speaker 1: run two Minecraft related servers on behalf of Microsoft named

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Speaker 1: Mine Villain Pixel Paradise, So we have this really vast

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Speaker 1: reach in that that young gamer demographic. And then we

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Speaker 1: talk about the core gamer, and the core gamer is

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Speaker 1: eighteen to thirty year old. They're playing older titles UM,

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Speaker 1: different types of titles like League of Legends UM, and

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Speaker 1: they are We're we're primarily the way we're reaching that

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Speaker 1: audience is through those those kind of older type of

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Speaker 1: gamer offerings that we have. So mob Crush is a

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Speaker 1: suite of tools that they can use for free to

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Speaker 1: multicast their gaming centric content across all of their social

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Speaker 1: media channels. I had mentioned earlier. We have super League Arena,

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Speaker 1: which is our kind of more heightened e sports property

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Speaker 1: and broadcast UM and things like frame Rate, which is

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Speaker 1: our set of owned and operate social channels that UM

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Speaker 1: are where we post highlights from our various players. So

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Speaker 1: you know what we do. You know, we're Our reason

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Speaker 1: for being the sun in our universe is the creator, right,

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Speaker 1: It's that mid tier creator that we're trying to empower,

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Speaker 1: and in doing so, we get to aggregate their audiences

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Speaker 1: and their content. UM. The way we monetize us through

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Speaker 1: the ad model. What we do so uniquely is we

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Speaker 1: can deliver advertising units very engaging UM embedded ad units.

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Speaker 1: I'm not talking about UM slapping a lot of logos

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Speaker 1: into gameplay and interrupting gameplay. I'm talking about very experiential

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Speaker 1: ways we can bring advertisers into the physical game, the

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Speaker 1: the metaverse, or into the stream, the gaming centric stream

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Speaker 1: from our influencers streaming their gaming content. So the way

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Speaker 1: we make money is primarily off of that ad model

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Speaker 1: because those very premium in game and in stream AD

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Speaker 1: units can't be AD blocked out or cord cut out.

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Speaker 1: A good example just to kind of give you a

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Speaker 1: sense of, well, why is this so special and different

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Speaker 1: than a typical ad model, you know, we re skinned

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Speaker 1: the world in a Roadblocks game for a ten day

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Speaker 1: campaign for Nickelodeon, who has been one of our long

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Speaker 1: time advertising partners and their parent company, Viacom is also

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Speaker 1: an investor in us UM. In that ten day campaign,

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Speaker 1: we transformed a Roadblocks world into something more akin to

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Speaker 1: UM the themes around SpongeBob Um for a new TV

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Speaker 1: show they had coming out, and in those ten days

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Speaker 1: we were m it created a really cool, exciting gameplay

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Speaker 1: experience for kids inside that world. UM we reached had

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Speaker 1: fifty million visitors to the game, and if you added

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Speaker 1: up all the gameplay in those ten days, that equaled

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Speaker 1: about a hundred and sixty two years of gameplay. So

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Speaker 1: when we're talking about that kind of deep engagement that

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Speaker 1: we in an authentic um way to engage with with

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Speaker 1: a demographic that a brand's targeting, you're talking about fifty

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Speaker 1: c pms. So it's really a completely different ad model

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Speaker 1: than we've ever really known because the AD model will

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Speaker 1: never be the same again, and so our big insight,

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Speaker 1: aside from the fact that the supremacy of the metaverse

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Speaker 1: and how do you put tools in the hands of

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Speaker 1: everyday content creates this democratization of content creation, the third

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Speaker 1: leg of the trends that we really kind of drag

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Speaker 1: off of is for all those reasons, the AD model

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Speaker 1: will never be the same, and the place the AD

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Speaker 1: model has moved to is really in this highly democratized

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Speaker 1: self produced content and that we and in our opinion,

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Speaker 1: the place we really kind of differentiate is the way

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Speaker 1: that we are close to where that self produced content

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Speaker 1: is happening in the metaverse and gaming centric live streaming. Well,

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Speaker 1: and I'm thinking about this in reverse. Instead of people

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Speaker 1: going on sites to play a particular game like Call

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Speaker 1: of Duty, You or Fortnite, I'm thinking about it in

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Speaker 1: the metaverse world as an old easer. Why can't you

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Speaker 1: do like, let's play Monopoly or something like that. You know,

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Speaker 1: I call up Scarlett, and I call up Mike and said, hey,

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Speaker 1: I'm the car, let's go. Can't that be done? Absolutely?

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Speaker 1: In fact, that's one of the beautiful things about the

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Speaker 1: piece of the metaverse that where you speak to is

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Speaker 1: really um. These gaming platforms like Roadblocks that really you know,

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Speaker 1: Roadblocks doesn't serve up a game, you know, a fixed

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Speaker 1: game like Hall of Duty or League of Legends. What

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Speaker 1: they give is a set of tools that allow everyday

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Speaker 1: game designers to design inside the parameters of that tool.

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Speaker 1: So Roadblocks has millions of games inside Roadblocks. The question

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Speaker 1: then becomes, can you create one that attracts is the

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Speaker 1: most exciting and fun and attracts the most players. But

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Speaker 1: if you think about there's really nothing to your point

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Speaker 1: that you can't have an expression of digitally. I'll tell

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Speaker 1: you the most easy example for me. You know, I

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Speaker 1: used to in my former life, I worked in large

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Speaker 1: cap and used to have thousands of retail sites under

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Speaker 1: my domain, UM globally. And you know a classic retailer,

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Speaker 1: you know, UM conundrum is always you know, it's all

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Speaker 1: about you know, like for likes and foot traffic, and

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Speaker 1: I couldn't possibly spin up a digital store, because then

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Speaker 1: I'll cannibalize my foot traffic, right that, you know, And

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Speaker 1: and it's it's just a never ending cycle of constantly

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Speaker 1: trying to to to beat those like for likes. Um.

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Speaker 1: You know, if right now, what I would tell the

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Speaker 1: old you know, the old self of me that used

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Speaker 1: to run all those brands globally for BP, I would

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Speaker 1: now sit her down a chair and be like, listen,

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Speaker 1: if you don't start thinking about how your brands are

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Speaker 1: going to persistently live in the metaverse, you're missing the boat.

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Speaker 1: And then here's the reason, the simple example bow why

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Speaker 1: you know right now, if you're in League of Legends,

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Speaker 1: you're a very advanced player. Right that game, I mean

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Speaker 1: it's like playing chess, serious layers of strategy and critical thinking.

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Speaker 1: Nobody plays it casually. Um. If you look at the

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Speaker 1: typical demo of who plays that game again, it's that

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Speaker 1: hardcore kind of you know, twentysomething gamer. Um. Probably the

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Speaker 1: last target demo that you think is is strolling down

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Speaker 1: Rodeo Drive walking into Louis Vatan. And yet you can

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Speaker 1: buy a Louis Vuitton Cape inside League of Legends. Now,

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Speaker 1: why can you do that, well, you can do it

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Speaker 1: because it's a brilliant move UM for all these luxury

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Speaker 1: fashion brands that you're now seeing getting into um getting

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Speaker 1: into digital fashion products. The reason is is because if

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Speaker 1: I can vary affordably buy a twenty dollar cape for

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Speaker 1: my champion that is branded Louis Vuitton, my propensity now

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Speaker 1: to think about having a pee of physical Louis Vuitton

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Speaker 1: in my home, a purse, a wallet, a scarf, what

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Speaker 1: have you, is way likelier. And the thing is, this

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Speaker 1: is a customer I was never going to probably reach

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Speaker 1: through just my physical footprint, and so it completely expands

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Speaker 1: UM that that notion of a digital to physical crossover

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Speaker 1: is a really powerful thing. The other way to think

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Speaker 1: about it is that cape lives forever. You may pull

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Speaker 1: that purse or wallet out once a month, but your

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Speaker 1: relationship to that digital cape is is persistent. And that

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Speaker 1: is powerful too, because if you can as a brand,

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Speaker 1: even if your primary business is physical goods, if you

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Speaker 1: can start creating a relationship with new customers and a

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Speaker 1: physical environment in a digital environment that way, then you're

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Speaker 1: starting to not only reach new people, but you're starting

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Speaker 1: to get into a whole different level of brand definity

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Speaker 1: or loyal guilty. And so that's that's the fun conversation

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Speaker 1: I'm now having with brands because I'm seeing across from them,

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Speaker 1: and the nice thing is is they know I've I've

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Speaker 1: actually stood in their shoes. I've been on the other side,

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Speaker 1: and I so enjoy you know, you guys have joked about, hey,

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Speaker 1: you know being a gen X or well I am.

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Speaker 1: You know my games are Galagha and Centipede. I love

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Speaker 1: getting to talk to him and say, no, I know,

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Speaker 1: I'm you, I'm really you. And the only thing that

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Speaker 1: separates us is that I've spent the last six years

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Speaker 1: being taken along this journey by a lot of really

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Speaker 1: smart millennial and gen Z people who get it. And

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Speaker 1: so it's kind of fun to see. I think the

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Speaker 1: bells starting to ring. Just like with the sports, the

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Speaker 1: metaverse is way bigger and m and I do think, well,

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Speaker 1: it seems a little intimidating. I think brands are starting

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Speaker 1: to really get it. Thank you for explaining that. That

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Speaker 1: actually made it a lot more tangible um for for

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Speaker 1: old geezers, old gen xers like us. You know, when

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Speaker 1: we okay, only speak for myself and Michael barr here um.

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Speaker 1: The metaverse, though, still feels a bit nichey um, like

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Speaker 1: it's cutting edge for the gen zars um, certain millennials,

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Speaker 1: those who have time to be gamers or competitive gamers.

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Speaker 1: Morgan Stanley has said that for all that formerly the

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Speaker 1: company formerly known as Facebook now meta platforms and alphabet

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Speaker 1: may have ventured into the metaverse, in order for it

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Speaker 1: to really take off, to become mainstream, you need a

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Speaker 1: company like Apple to to jump in there. I want

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Speaker 1: to get your thoughts on that idea. Yeah, it's it's

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Speaker 1: a good point. I mean, look, I said on our

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Speaker 1: last earnings call. Um, you know, hey, I'm not going

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Speaker 1: to complain when Facebook rebrands themselves meta, right. I mean

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Speaker 1: you know some crazy stats like the the the number

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Speaker 1: of searches you know for the word metaverse. I think

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Speaker 1: in Google in the month of October went up like

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Speaker 1: eighteen tho percent or something. So, you know, certainly for

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Speaker 1: for companies and stocks like super League that have been

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Speaker 1: talking about the metaverse, and frankly, we haven't just been

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Speaker 1: talking about it, We've been in it. You know, if

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Speaker 1: you go back the last few scripts of calls the

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Speaker 1: metaverse has been a drumbeat for us for the last

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Speaker 1: year because of our exceptionally large footprint that we already

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Speaker 1: have inside gameplay metaverse is. So I think when it

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Speaker 1: comes to gameplay metaverss, I do think it's a pretty

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Speaker 1: established thing. I mean, Minecraft has been around for twenty

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Speaker 1: years and it is, you know, the second or third

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Speaker 1: largest game in the world, and it's maintained itself that way.

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Speaker 1: So I think that gameplay meta versus are are somewhat

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Speaker 1: real and tangible, and it just doesn't sound like a

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Speaker 1: lot of hype. I do think though, the where it

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Speaker 1: can go, and I think when you when you look

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Speaker 1: at these from what I've read and tried to understand

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Speaker 1: about where Facebook's going, I think it still feels a

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Speaker 1: little blurry about what do they mean when they say it,

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Speaker 1: and and and what what does that mean for Facebook

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Speaker 1: and what it will look like. I think that I

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Speaker 1: think that it's a really good point you make, which

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Speaker 1: is the definitions can be super broad about what metaverse

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Speaker 1: can be, and if it's super broad, it's going to

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Speaker 1: take the largest platforms out there all really kind of

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Speaker 1: I don't want to say working in tandem, meaning that

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Speaker 1: they are integrated. But I do think at a minimum

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Speaker 1: it should be a course strategy for all of them

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Speaker 1: because we're so dependent on those platforms for all those

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Speaker 1: other parts of our lives. UM. The way that I

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Speaker 1: felt like Zuckerberg talked about a little bit was almost

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Speaker 1: because it was so broad and vast, it almost sounded

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Speaker 1: like everything digitally would be interconnected and that I could

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Speaker 1: be moving throughout all my digital word world seamlessly. And

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Speaker 1: to your question, then that's out the heart of it. Well,

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Speaker 1: that means that we need the Microsoft, Sea Apples, the

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Speaker 1: Metas all working in tandem and having integrated systems, and

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Speaker 1: and that's that would take a lot of time and

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Speaker 1: a big change in strategies for some of those companies.

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Speaker 1: So we take us around the corner for super League.

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Speaker 1: What what's next? Is it an all digital world of

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Speaker 1: the brick and mortar days? Uh? In the rear view mirror. Yeah,

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Speaker 1: you know, we UM we became kind of a nine

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Speaker 1: D ten digital to physical company prior to the pandemic,

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Speaker 1: and we really had to in many ways because of scale.

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Speaker 1: You know, we we we listed you know on NASDAC,

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Speaker 1: you know, as a microcap. We kind of in a

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Speaker 1: way embraced a little bit of the spirit of of

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Speaker 1: UM Nazdac and the old days. Right it was you

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Speaker 1: know when when like Amazon went public, you know, we

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Speaker 1: went public with without a lot of revenue, and it

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Speaker 1: was more about let's let the public investor get the

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Speaker 1: upside instead of staying private, you know, kind of the

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Speaker 1: Unicorn model that we're so deeply living in these days.

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Speaker 1: And so it really again in some ways, was true

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Speaker 1: to our brand and our promise to creators. It was

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Speaker 1: about UM putting the tools and the value in the

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Speaker 1: hands of the everyday investor as well. UM. Because of that,

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Speaker 1: we knew that we had to be more digitally based,

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Speaker 1: that we needed scale, We needed to start showing that

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Speaker 1: first we could deliver some big KPI, start to get

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Speaker 1: some critical mass on the platform, and that revenue would

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Speaker 1: then follow from that. So you know, right now we

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Speaker 1: have about one million creators making gameplay or broadcast off

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Speaker 1: of our tools. We reach about five million UM players

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Speaker 1: a month that in our own and operated properties, and

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Speaker 1: UM this year will will eclipse about ten billion views

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Speaker 1: on our platform. So we're showing that we can reach

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Speaker 1: the creator, the player, and the audience UM with some

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Speaker 1: scale and the nice thing is isn hour we're starting

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Speaker 1: to see some of the revenue kick in. So we

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Speaker 1: delivered about a four improvement on revenue and three Q

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Speaker 1: relative to UM same quarter prior year. UM as well,

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Speaker 1: I gave a little bit of guidance for four Q

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Speaker 1: that I expect another jump and revenue and and UM

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Speaker 1: I think investors and analysts were pleased to hear that

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Speaker 1: news that the revenue is starting to track up. We

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Speaker 1: also always said that we would be UM, that core

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Speaker 1: to our model would be UM inorganic growth as well,

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Speaker 1: and so we've completed three acquisitions this year. What I'm

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Speaker 1: most proud of on those is that UM two were

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Speaker 1: small tuck in and a creative out of the gate.

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Speaker 1: The third one was a little bit of a larger one,

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Speaker 1: but again it really gave us some heft UM. But

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Speaker 1: all three of them were right on the m and

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Speaker 1: a strategy we laid out for investors a year and

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Speaker 1: a half ago. We looked at tons of stuff and

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Speaker 1: it was powerful to be able to walk away and say,

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Speaker 1: you know what, if we do this deal. It may

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Speaker 1: give us a short term jump on revenues or give

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Speaker 1: us a bunch of eyeballs, but it's off strategy investors,

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Speaker 1: how do I write the earning script after we we

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Speaker 1: we do that deal, and so I'm I'm proud of

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Speaker 1: the fact that we really stayed in the lane that

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Speaker 1: I think is giving us a point of differentiation. So

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Speaker 1: investors should expect to see us continue to do smart

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Speaker 1: M and a UM along with our our organic growth.

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Speaker 1: I do think we're starting to get to a point

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Speaker 1: where with the types of run rates we're starting to

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Speaker 1: see on revenues UM, things like being profitable UM aren't

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Speaker 1: as far off as they seemed, you know, a year

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Speaker 1: or two years ago, right So I feel like, well,

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Speaker 1: I'm not saying that we'll hit that next year. I

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Speaker 1: do think that we're starting to see a path to

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Speaker 1: two cash flow positive also too, though I don't think

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Speaker 1: investors expect that of us right now. I think what

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Speaker 1: they've said all along is is that because we're a

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Speaker 1: growth company, deliver the top line growth and wisely reinvest

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Speaker 1: in scale and whatever it takes for automation to kind

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Speaker 1: of lift that ceiling on the types of revenues you

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Speaker 1: can push through your your model. As far as the

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Speaker 1: physical goes, we still think it's pretty magical watching people

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Speaker 1: gameplay together in real life. The tech that we've built

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Speaker 1: is location agnostic. It doesn't care if the players at

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Speaker 1: home or sitting at one of our top golf locations

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Speaker 1: or cinema theater locations. And so the beauty is is

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Speaker 1: that UM and it's all cloud based. UM. So what

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Speaker 1: that means is is that for a retailer to start

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Speaker 1: spinning up their own pop up e sports experiences, they

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Speaker 1: just need to have adequate broadband and a flat screen

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Speaker 1: TV that's Internet connected. And so the nice thing is

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Speaker 1: is the stuff that we've built that's driving our digital

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Speaker 1: experiences right now, UM can easily flip back into a

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Speaker 1: retail offer and we still do some live events. What

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Speaker 1: I like about it for investors though, is if we

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Speaker 1: move back to that model as we expand into it,

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Speaker 1: I really see it more as a technology as a

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Speaker 1: service model, a licensing play, something that has nice margins,

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Speaker 1: and that is really hands off for us, just really

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Speaker 1: putting the tools in the hands of the person who

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Speaker 1: runs that retail location. And don't let lynch you fool you.

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Speaker 1: He's in the palm crowd like the rest of us.

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Speaker 1: And I'm not talking about beer either. I'm talking about

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Speaker 1: the good old fashioned pong and hand. You've been so kind, uh,

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Speaker 1: Super League Gaming chairman and CEO, thank you so much

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Speaker 1: for joining us in Thank you. This is the Bloomberg

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Speaker 1: Business of Sports podcast. Catch us here each and every Monday,

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00:23:41,200 --> 00:23:43,720
Speaker 1: Wednesday and Thursday, exploring the world of money in sports.

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Speaker 1: You can find me on Twitter at Big Bar Sports

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00:23:46,080 --> 00:23:47,880
Speaker 1: and I'm Mike Lynch. You can follow me at Lynch

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00:23:48,160 --> 00:23:51,200
Speaker 1: w c dB. I'm also on Twitter at Scarlett Fool

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00:23:51,560 --> 00:23:54,040
Speaker 1: and I'm also on Twitter and joining the Lions win.

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Speaker 1: I'm sorry I had to slip that in. Uh, you're

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Speaker 1: listening to the Bloomberg Business of Sports on Bloomberg Video

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Speaker 1: of around the world. M