Denmark’s Astralis set to join Man United as listed firm as e-sports chases multibillion sponsorship deals

While e-sports, which is basically competitive video gaming, has had an uphill struggle to become accepted as a ‘physical sport’ there is less debate over the similar commercial and marketing opportunities it offers compared to some of the world’s biggest sporting teams, such as football team Manchester United and the NBA’s LA Lakers.

In the face of the doubters and sceptics who cried “nerds” and ‘it’s not a real sport”, and just like snowboarding and skateboarding which have made the Olympics and won credibility, e-sports keeps on rising and Denmark’s Astralis is now set to become the first team to go public.

Astralis is ranked the world’s number one in Counter-Strike: Global Offensive, a popular first-person shooting game, and has won millions of dollars in tournament prizes. The success has earned it commercial endorsements with brands such as Audi and Logitech, according to a Bloomberg report. Now operating as a media company, the Astralis Group has expanded with teams competing in League of Legends and EA’s Fifa.

Astralis wants to capitalise on this success with a planned listing on December 9 on Nasdaq’s Copenhagen exchange for small companies. According to its prospectus, Astralis plans to raise 125 to 150 million kroner (US$18-22 million), with shares priced at 8.95 kroner each. The global e-sports market will generate almost US$2 billion in 2022 with viewership expected to reach 595 million that year, according to research by video games and e-sports analytics firm Newzoo.

“In many ways, traditional sports and e-sports teams have similar business models. They both fundamentally operate as sports media products, meaning the traditional monetisation of viewers and fandom [sponsorships, media rights, merchandise] are very similar,” said Remer Rietkerk, Newzoo’s head of E-sports. “One advantage that esports has is that the audience is digitally native, which means they have more direct touch-points with their fans outside of match days.”

As with physical sports – talent is a top priority. How to develop and retain top players is critical to the commercial success and sustainability of both regular sports and e-sports teams. The Astralis prospectus states that highly-skilled employees are its “engine and largest assets” and future success depends upon “the ability to attract, retain, and motivate them.”