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Gaming as a Service Platform Gives Teams Another Path to Engage, Monetize Young Fans

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Gaming as a Service Platform Gives Teams Another Path to Engage, Monetize Young Fans

Rival, a three-year old Gaming-as-a-Service (GAAS) provider, recently raised a $1.6mm seed round. 

Most esports endeavors to date have focused on winning or ‘being the best’. Rival is going in the other direction, and leaning into community building and entertainment.

Its platform serves as a participatory digital gaming destination for young fans, and the company provides the operational overlays enterprise customers need to establish meaningful connections with them (think: moderator tools, ability to ingest streams, and promote media).

The company seems to have found product-market fit with pro sports organizations eager to reach the gaming or esports demo. 46 teams currently subscribe to the GAAS. 

“The next-gen customer is spending equally as much time playing games as they are consuming legacy social media platforms,” Matt Virtue (founder, Rival) said. And “much less on broadcast [television where traditional sports air].”

Now, the company will turn its focus to reaching profitability.


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Esports investments have largely underwhelmed to date. At least relative to the fervor that existed for the nascent gaming niche circa 2016-2020 (see: FaZe firesale). 

A competitive approach tied to sport’s traditional business model has failed to catch on amongst the general market. And as a result, organizations that once sold for tens of millions can now be had for $.03-$.05 on the dollar.

Of course, the idea esports would have individual leagues with market-based franchises was flawed to begin with. 

“The lifeblood of [big four sports properties] is media packages and ticket sales,” Virtue said. “But when you hear [game] publishers on earnings [calls] they talk about the avidity of the gamers playing the games, not those watching behind a one-dimensional screen.”

Gamers also aren’t just fans of a single game.

“So, when they were [asking for] a ~$25mm expansion fee to build a League of Legends team and [suggesting it] would produce monster returns, [that] seemed speculative,” Virtue said.

It’s simply not how the industry works.

That didn’t matter to many sports investors in the years preceding the pandemic.

“This was during the ZIRP period, when money was effectively free to borrow,” Virtue reminded. “And esports fell into the ambitious innovation bucket [for many big four franchises].”

But Virtue understood that the most material gaming businesses would likely come from those facilitating an elite participatory journey rather than centering their model on viewership, and serendipitously came across TwoUpTwoDown (an emerging educational/pen-pal platform) in 2020. 

The company’s tech enabled two kids within two years of each other to “effectively get to know one another through gaming without having to communicate in the traditional local sense,” he explained.

Howevever, its founders lacked the strategy necessary to efficiently monetize the platform. 

So, with Virtue’s assistance TwoUpTwoDown was re-packaged as a disruptive, down funnel marketing tech solution.

“Not about impressions or CPM viewership-based gaming, but about [participation],” Virtue said.

Rival began marketing the product to sports organizations because they maintain passionate fandoms that, at least to some extent, index as gamers.

Teams can also speak cheaply and effectively to fans on social media making it easier to cultivate community. Even the largest and most popular brands in the world would struggle comparatively with audience acquisition.

Fans have been drawn to Rival by the opportunity to be a part of their favorite team’s gaming community, to participate in gaming tournaments, and compete against other gamers.

“But there is a unique prizing [element to the business too],” Virtue said.

Every action completed on Rival accrues value redeemable within the team marketplace (think: showing up for a tournament, participating in survey). Fans can take home signed merchandise, game tickets, and/or unique experiences.

While gamers value Rival’s play-to-earn system, its partners value the insights the loyalty platform generates. 

“The redemption marketplace is a nice way [for sports organizations] to better understand first party data capture. In addition to their [fans’] gaming activities, [we identify] what they like to do and consume,” Virtue said.

Rival’s rewards program also provides teams with an arbitrage opportunity of sorts.

Organizations can “markup [excess inventory] in [the redemption marketplace] in a way that is favorable to [brick and mortar] team stores because [the tokens users earn] feel like free money,” Virtue said.

And the brands Rival works with value the platform’s transparency. They can sponsor the community or own specific gaming activations, and the redemption program ties back to merchandise sales.

“So, there’s no ability for us to shy or hide behind activity [or scalability],” Virtue said. “We track the user’s ability to unlock loyalty and spend and see [their behavior] in real time.”

The Detroit Pistons were among the first big four teams to sign up for Rival’s GAAS solution and launch a branded gaming community (Motor City Rivals). It promoted the platform across social channels and thousands of fans quickly signed up. 

Rival has helped to keep the community engaged and growing by running a steady dose of programming.

“Console, PC, mobile, whatever the gaming audience caters to,” Virtue said, “and any and all games under the sun.”

Some team branded communities on the Rival platform now have tens of thousands of monthly users.

While Rival is participation focused, the platform will include a passive viewership component in the months/years ahead. But it’s going place amateur players at the center of the storyline, rather than professional gamers (as with ‘traditional’ esports).

For example, those watching in the Motor City Rivals community will be seeing the best gamers amongst Pistons fans.

Rival generated over $1.3mm in ’23 revenue and its ‘24 run rate is expected to be well north of $3mm. So, the sub $5mm valuation it commanded in the most recent round may seem low. 

But Rival’s investors (four family offices, two of which have ties to big four sports team ownership groups) value cash-flow positivity above all else.

“It was a uniquely advantageous [valuation] for all of us,” Virtue said.

While investment will be made in product, the newly raised capital is largely earmarked for bolstering headcount (think: sales team). The money is expected to give Rival 26 months of operational runway.

The goal over that time will be to reach profitability (think: more clients, raise pricing). FWIW, annual contracts are currently valued between $50,000 and $75,000. 

But that’s largely because the company has been more focused on customer adoption than margins. 

“What’s [been] most important for us [to date] is the teams providing a baseline feeder system to league level conversations,” Virtue said.

That will change moving forward. Rival recently inked its first league-wide ‘master license’ with the NHL and its 32 associated clubs, and plans to begin addressing client pricing in the months ahead. 

Once the company can sustain itself the plan is to go back to market and raise a Series A from institutional sports tech and media investors. Virtue is planning to initiate those conversations in Q3 ’25. 

In the meantime, Rival will focus on helping more sports organizations and brands to engage and monetize young fans.

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