In the words of faux fashion model Jacobim Mugatu, esports is so hot right now! And when it comes to heat, nothing burns quite like chilli. With an estimated worth of US$13 billion, games like League of Legends, Fortnite and Overwatch not only offer prize money beyond that of most traditional sports, but pull in a larger audience, too.
Sure, it’s not quite FIFA World Cup levels (yet), but the esports phenomenon has long since moved out of the basement and into the living room of modern culture.
It’s also a phenomenon on the precipice of a major disruption. The explosion in interest around cryptocurrency through the course of 2018 may have been divisive amongst gamers, but its incursion into the video games industry is a case of “when” not “if.”
It’s not so much the cryptocurrencies themselves that have developers excited, but instead the blockchain technology that allows them to work. Microsoft is already using the blockchain to run the Xbox ecosystem’s backend, Ubisoft has formed a whole studio focused on blockchain research, and Sony has patented a blockchain-operated DRM system.
But it’s the esports scene that is best positioned to really capitalise on the blockchain. Tournaments and games that utilise the blockchain allow for instant, near fee-less payments of prize money (or gambling payouts), a secure storefront for the secondary market, full transparency, and preventative cheating measures through its decentralised, secure nature.
But it can also be used for viewer participation. This is where chiliZ comes in. chiliZ’s revolutionary esports concept is so hot, it’s just broken the record for the largest amount of investment for a videogames related blockchain start-up. A cool US$65 million, including investment from some major, influential players.
So why are investors so hot for chiliZ?
An Esports Crowd Voting Platform
You’d be forgiven for not knowing too much about chiliZ. It’s based out of Malta, after all. But the little Mediterranean island has actually been quite proactive in its acceptance of adapting blockchain technology to the entertainment industry.
chiliZ is an esports focused crowd interaction platform aiming to give the audience a real-time, and meaningful, impact on tournament play. Through the chiliZ platform, teams can crowdsource key management decisions.
Fans purchase chiliZ, each of which act as a vote token. Fans then spend this chiliZ token to place a vote when a team looks to the crowd for help making a decision. Because the recording of data on the blockchain is transparent and secure from hacking, these votes provide a precise indication of crowd opinion.
(On a sidenote, many governments are exploring the use of blockchain for national elections for the same reason.)
The possibilities here are mind-blowing. Last year’s League of Legends world championship, for example, brought in over 100 million viewers alone. It’s just a small taste from one game of the number of humans that could be positively impacted by such a system.
Some of the decisions chiliZ suggest teams might crowdsource include tactics, team selections, formations, skins, and loadouts. However the voting process can look beyond teams, to entire leagues, tournaments, and even the games titles themselves.
A willingness of teams to allow viewers to play an active role in the outcome of a performance could be smartly used to gain fans. And a team with a greater number of rusted-on fans can attract more sponsorship, and in turn better talent.
Investors Believe in chiliZ
We can understand why gamers may approach chiliZ with a level of healthy scepticism. We’re gamers; it’s what we do.
How will the system ensure teams aren’t trolled by voters with a negative agenda? How will it enforce crowdsourced decisions on teams who participate? What is the timeframe for casting a vote and in real-time environments, how will that process be visualised and broadcasted to fans? Plus, of the money spent on chiliZ by fans, how much goes back to supporting the teams?
While such questions do require answering over the coming months, investors and those with inside knowhow on blockchain technology are past the point of scepticism. The idea behind chiliZ has already excited a lot of powerful stakeholders.
The largest of these is the cryptocurrency exchange Binance. Binance is huge. It’s in the top five exchanges on the planet when it comes to volume and size of transactions. We’re talking US$1.5 billion in daily cash movement and over nine million users here. Its investment in chiliZ is said to be “significant,” too.
In addition to investing in the Malta-based chiliZ operation, Binance is also opening a headquarters in the island nation, ensuring the relationship between the two outfits extends beyond funding. Alexandre Dreyfus, CEO of chiliZ, confirmed as much in a statement, saying:
“Binance’s significant investment in chiliZ will boost our current private placement offering and help us to move faster. Their support will help us deliver our vision globally, increase our visibility in the blockchain ecosystem and empower our technical vision. I’m also excited that Binance is setting-up in Malta, where we will be able to share resources, enabling a more strategic partnership.”
Binance has the power to ensure that the chiliZ token, should it be publicly listed, is seen by a significant number of traders. This could ensure continued investment and wider public interest in the chiliZ platform.
Another notable investor is Steven Nerayoff, better known as the co-founder of Ethereum. Ethereum is the second biggest cryptocurrency in the market behind Bitcoin. More importantly, it was the features of the Ethereum blockchain, such as smart contracts and non-fungible tokens, which have seen it become the go-to foundation block for most videogame-related blockchain startups.
Bancor, another global cryptocurrency exchange, OK Blockchain Capital, FBG Capital, and Ceyuan Ventures are other large investors. All up, chiliZ has received US$65 million in investment to help get the show on the road.
Sky is the Limit for chiliZ
As mentioned earlier, that US$65 million makes chiliZ the most backed video game blockchain startup yet and by some distance. It leads GameCredits ($US53 million), WAX (US$46 million), Theta Labs (US$37 million), and Enjin (US$35 million).
Whether the esports audience dives into the idea of team participation or not, chiliZ is clearly coming in hot and is due to launch by the end of the year.
Then there are the broader applications of crowdsourcing decision making across all aspects of videogaming to consider. Imagine how it could play a role in crowdfunded games or simply in the development process. What about MMOs or persistent worlds where the narrative could shift in new directions dynamically based on large-scale, real-time player involvement?
It’s an exciting new frontier there’s no doubt, and chiliZ is bringing the heat.
