Allied Esports Entertainment Inc., an Irvine-based company that runs venues and live events for online gaming enthusiasts, sees major growth possibilities for the competitive side of the industry.
The company went public last Monday by reverse merger after it was bought by Black Ridge Acquisition Corp., a Minneapolis-based blank check company with some $140 million in the bank.
Allied Esports also runs the World Poker Tour. It employs nearly 100 people including 30 in Irvine, which is now the public company’s home.
“We are highly confident because esports is not a bubble,” Allied Esports Chief Executive Frank Ng told the Business Journal last week.
“Esports is huge, it’s big. It’s at its early stage, but the potential is amazing.”
And for the over-50 crowd who missed the new trend, here’s the way Dictionary.com defines esports: “competitive tournaments of video games, especially among professional gamers.”
Ng says the company and its executive team, now near John Wayne Airport, will stay in Orange County. “This will be my everything,” he said.
Santa Ana, Vegas Venues
“Video gaming is the biggest form of entertainment already and it’s still growing fast,” according to Ng, whose company, he said, is “at the heart of the industry.”
Early returns suggest Wall Street still needs convincing about the viability of esports.
The company’s shares fell 14% to about $3.60 apiece last week with a market cap that regulatory filings indicate stands around $88 million.
The stock of Black Ridge had already fallen from a little more than $10.20 to $4.50 prior to the completion of the merger.
Regulatory filings indicate that Black Ridge, headed by former pro poker player and casino owner Lyle Berman, initially valued the reverse merger deal at more than $200 million, factoring in stock, debt repayment and other factors.
Berman and Black Ridge still has a sizeable stake in the company, according to regulatory filings.
Ng attributed last week’s stock dip to technical factors as the company went public.
Many video game publishers, including Irvine’s Blizzard Entertainment Inc., are now creating competitive modes for their games to capture the demand for esports and competition.
The newly public company said players want to compete in person, on stage, under the bright lights, which is where Allied Esports says it comes in.
The company provides live experiences, content and interactive services to the global video gaming and poker communities.
It will utilize its global network of properties and content creation facilities. That includes its flagship location, HyperX Esports Arena Las Vegas, a 30,000-square-foot, multilevel venue at the Luxor Hotel & Casino that holds about 1,500 people. Its sponsor is Fountain Valley’s HyperX, the gaming unit of computer products manufacturer Kingston Technology Corp.
A few years ago, Allied Esports set up the first dedicated gaming venue in North America in downtown Santa Ana. The Esports Arena is about 15,000 square feet and often draws hundreds of attendees for weekly events and competitions.
Along with seeking out new venues, Ng said his company would also draw on World Poker Tour’s nearly two decades of international expertise in running live events.
Other Investors
Simon Property Group Inc. (NYSE: SPG), the Indianapolis-based mall owner valued at about $49 billion, and TV Azteca, the top sports television network in Mexico, have each made equity investments in Allied Esports and are launching alliances with it.
Simon and Allied Esports will collaborate to create a new product offering focused on opening esports gaming venues and production facilities in Simon malls around the country; think a modern version of a mall’s video arcade.
The mall-based venues will be designed for tournament play and daily use with the capability to be expanded into common areas for larger esports activations and live events.
TV Azteca and Allied Esports will work together to expand the esports landscape in Mexico through a number of initiatives, they include:
• Creating a 24-hour digital esports channel dedicated to esports and video gaming for the Mexican market.
• Developing a network of esports talent across Mexico and Latin America.
• Building a flagship esports venue and additional esports and content facilities in Mexico.
