Mobile Esports Firm Doubles Revenue in Just 10 Months

(Bloomberg) -- In the world of competitive video gaming, playing on phones and tablets has traditionally been an afterthought. That's rapidly changing: Last year, the leader in mobile esports hosted 300 million tournaments -- some with more than 10,000 players -- and awarded more than $100 million in prize money.

Andrew Paradise, co-founder and chief executive of Skillz, says the company has doubled its monthly revenue to $16 million since last May, and he doesn't see growth slowing any time soon. “When we started out, there was definitely some ridicule in the esports community about mobile esports,” he said. “The industry is shifting.”

As smartphones and tablets have gotten more sophisticated and powerful, they've become more satisfying for gamers. In 2016 global mobile gaming revenue was $42 billion, 39 percent of the overall video game market, according to research from German investment bank Berenberg. By 2020, that's projected to be 50 percent, or $65 billion.

In March Amazon rolled out its GameOn service, a competitor to Skillz that helps mobile and PC developers promote their games by creating esports tournaments. Microsoft Corp. recently purchased PlayFab, another company aimed at aiding developers. In the past two weeks, Fortnite and PlayerUnknown's Battlegrounds, two of the world's top-grossing computer games, launched on mobile. The games are currently the top two free games in Apple's App Store.

Unlike traditional gaming, though, mobile gaming appeals to women as well as men. Among the 15 million gamers on Skillz, about 54 percent are female, according to Paradise. The six-year-old company is a central hub that can turn any mobile game into a cash contest between friends or strangers -- not unlike the seat-back video games that connect airline passengers.

In December the company closed a $25 million round of funding led by telecom giants Telstra Corp. and Liberty Global Plc. Other investors include the owners of the New England Patriots, Milwaukee Bucks, New York Mets, and Andy Miller, a Sacramento Kings co-owner who was an early-mover in esports.

“The tech is there and everyone has a phone,” said Miller, a co-founder of Quattro Wireless, which was acquired by Apple in 2010. “If you hit the right formula, we'll see mobile games take off because it's just a bigger player base.”

--With assistance from Joshua Brustein

To contact the reporter on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net.

To contact the editors responsible for this story: Janet Paskin at jpaskin@bloomberg.net, Rob Golum

©2018 Bloomberg L.P.