Locked and loaded: Emerge Gaming targets international expansion after inking landmark distribution deal
ASX-listed esports heavyweight Emerge Gaming Ltd (ASX:EM1) has clinched a deal with MTN Group that sees it deliver its exclusively branded esports platform, MTN Arena, to 29 million mobile gamers across South Africa.
Leading esports platform operator Emerge Gaming has this morning secured a partnership with the world’s ninth largest mobile network operator, MTN Group, to integrate its mobile competition and gaming platform with the telco’s services.
Based in South Africa, MTN boasts over 250 million subscribers in 22 countries across Africa and the Middle East, with a market cap of approximately A$8.4 billion.
The landmark distribution deal – the first between an esports operator and a major telecommunications giant in the continent – will see MTN Group responsible for marketing and operating Emerge’s ArcadeX gaming platform in South Africa, branded under the name “MTN Arena”. MTN Arena is a gaming tournament platform that will allow casual gamers to enter competitions and win prizes while playing their favourite games with incorporated social elements.
“After two years of nurturing our relationship with MTN, product planning and product development, we are now the exclusive MTN Mobile esports provider,” said Emerge Gaming CEO Gregory Stevens.
“I am incredibly enthusiastic about MTN Arena and the future opportunities of Emerge.”
Emerge Gaming and MTN Group will look to drive revenue growth together, with the telco giant committing to market the MTN Arena platform throughout its digital channels in combination with further external marketing. A significant investment into the marketing and prizes in the first 12 months under the terms of the deal will drive subscriber acquisitions. Under the two-year partnership agreement, MTN Group will market the platform to its 29 million South African subscribers via direct SMS marketing, promotions and other advertising.
The platform, which will go live later this month, allows Emerge Gaming to access economies of scale by tapping into a lucrative and fast-growing market of mobile gamers.
“We’ve been working on this idea for the better part of a decade and we now have a first-mover advantage thanks to our distribution agreement with our longstanding partners MTN Group,” Emerge Gaming CEO Gregory Stevens told Stockhead.
“To give you an idea of the scale of this opportunity, there’s over 3 billion online gamers worldwide, 2.4 billion of which are mobile gamers and that’s our total addressable market.”
MTN Group has also engaged a digital product marketing specialist to acquire more paid subscribers, and has developed a pipeline of campaigns for the platform’s launch.
When it comes to monetisation, MTN Group will charge a 25-cent daily subscription fee to subscribers, who can use their subscription to enter competitions playing their favourite mobile social games and win prizes.
“Leveraging MTN’s significant marketing support, we are fully funded to launch the product,” Emerge Gaming CEO Gregory Stevens added.
“We have worked extremely hard in developing a trend-setting eSports and gaming technology offering that leverages global Mobile eSports and gaming trends.
“The size of the video game market was estimated to be worth US$152 billion as of the end of 2019, more than the film and music industries combined.
Within that, mobile games directly accounted for US$68.5 billion in sales with 10.2 percent YoY growth, and that’s the market Emerge is looking to tap into with this partnership.
The partnership comes at an inflection point for the industry as two intrinsically linked trends are emerging. The first is the global rollout of 5G networks, which is sure to be a welcome addition for the estimated 2.4 billion mobile gamers globally.
The second is the emergence of cloud gaming in the past few years, with industry leaders like Microsoft and Google investing in game streaming in the hopes that faster internet speeds will usher in a new era of mobile gaming.
With mobile gaming set to become even more accessible, companies like MTN Group are looking to bolster their entertainment offerings, positioning Emerge Gaming to forge more global partnerships going forward.
Stevens told Stockhead that this was the first in a number of partnerships consistent with the company’s global expansion plans, as Emerge Gaming was presently in discussions with other significant parties and international telcos who represented a real opportunity to bolster its tilt at gamers worldwide.