Indonesia’s EVOS Esports eyes growth in diverse Southeast Asian countries

EVOS Esports team won the Mobile Legend tournament (doc: EVOS Esports)

Despite the COVID-related fog of uncertainty, Jakarta-headquartered EVOS Esports has carved out an aggressive expansion plan to tap gamers not only in its home market but across the Southeast Asian region, said its co-founder Hartman Harris.

On its radar are countries such as Vietnam, Thailand, the Philippines, Singapore, and Malaysia – where it has already established a presence since its inception in 2016.

“We see an opportunity there [in the e-sports market]. We want to bring all the EVOS features in every country we operate in,” its co-founder Hartman Harris told DealStreetAsia.

Harris founded EVOS Esports with Ivan Yeo and Wesley Yiu in a bid to capture the burgeoning e-sports sector that, he says, can flourish as much as traditional sports such as basketball and football, among others.

Four years on, Harris says the company is on the verge of achieving breakeven next year even as there has been an impact on its business this year due to the COVID-19 pandemic.

“We’ve indeed been hit for a while as the pandemic impacted the offline activities and competitions, but we ensure our partners that we can still engage with our audiences and markets amidst the pandemic,” Harris said.

Going forward, the company plans to strengthen its core businesses by helping players enhance skills across all five SEA countries it focuses on apart from its home market, thereby vigorously promoting the merchandise and membership programme in those regions.

EVOS plays a significant role in coaching the players, preparing them to be professionals. The company has built gaming houses – dormitories with training centers for athletes.

Today, the company claims to have as many as 80 e-sports players, divided into 13 teams, spanning across five countries. Each country has different e-sports interests and markets. For instance, Indonesia’s favorite e-sports is Moonton’s Mobile Legends. Meanwhile, consumer favorites in Vietnam and Thailand are Tencent’s Arena of Valor (AOV) and Garena’s Free Fire.

“From the beginning, our mission is to be a regional brand. We see Southeast Asia’s market potential is big. The competition is not as large as in China, South Korea, or North America because the entry barrier in regional markets is high. We take this opportunity for existence in each country in the region,” Harris said.

EVOS Esports, earlier known Zero Latitude, is a professional e-sports organization that generates 90 per cent of its revenue from sponsorships.

The remaining 10 per cent of its revenue comes from the membership programme that it launched in Indonesia early this year.

Even as its core business is to create players, EVOS is looking to ramp up its content and communities to broaden its business horizon.

The co-founders of EVOS have also built WHIM, a talent management firm, which manages the e-sports influencers in the digital platforms.

“We want to be the whole e-sports entertainment business, instead of just focusing on the team,” said Harris.

“We want to enlarge our merchandise and membership income, from 10 per cent to 20 per cent by this year. We want to target more countries besides Indonesia,” Harris said.

In Malaysia, it recently launched an e-sports business course in collaboration with one of the Malaysian universities in a bid to teach the finer nuances of creating a business from e-sports. It will run the session in October and plans to introduce a similar course in Indonesia next year.

Last year, EVOS raised $ 4.4 million in its Series A round, led by Insignia Venture Partners with the participation of Indogen Capital.

With the increase in internet and mobile phone penetration, the gaming industry has been witnessing increased traction over the past few years.

According to gaming-market research firm Newzoo, global e-sports revenue is expected to touch $1.1 billion in 2020 and record a 15.7 per cent year-on-year (YoY) growth from $950.6 million in 2019.

In Southeast Asia alone, gaming startups generated revenues worth $4.4 billion in 2019, a 16 per cent (YoY) jump from the previous year, according to Newzoo, a source for games and e-sports analytics and market research. Of that, mobile games alone contributed $3.1 billion last year.

According to a separate set of data available with the research firm, consumers in Indonesia have spent a total of $1.1 billion on games in 2018, which the biggest games market in the region.

To break down this number further, as much as 94 per cent spent money on in-game items or virtual goods.

Burgeoning market

Even as the e-sports industry in Indonesia is still at a nascent stage, a host of startups are mushrooming to cash in on the early years of the boom.

These include prominent names such as RRQ, BOOM E-sports, Bigetron, and Alter Ego. Just like EVOS, all of them are registered with the E-sports Federation of Indonesia (PBESI).

“They have a similar business, but currently, EVOS has the largest members and fanbase in the e-sports sector. There is no definite formula for the business model of an e-sports team. Still, EVOS has the largest members and buffs in e-sports,” Ashadi Ang, the spokesperson at E-sports Federation of Indonesia (PBESI), told DealStreetAsia.

Echoing the same sentiment, Tan Yinglan, founding managing partner at Insignia Venture Partners added: “EVOS has maintained its first-mover advantage in the region, locking in top teams and talents and establishing itself as the go-to channel for brands, platforms, and games to reach Southeast Asia’s e-sports fans. ”

Going forward, the sector is expected to get a leg up since, in August 2020, the Indonesian government has recognized e-sports as the official sport after it had held an e-sports tournament in Asian Games 2018.

According to estimates provided by Yinglan, as many as 510 million are e-sports fans (defined as those who watch the game at least once a month) in Asia, with 595 million being e-sports players. E-sports streaming viewership increased by 75 per cent to 100 per cent in Asia last year, and 50 per cent to 75 per cent of gamers are spending more time playing games during the pandemic.

Chandra Firmanto, managing partner at Indogen Capital, too, highlighted how the esports ecosystem in Southeast Asia has started to develop among the young generation.

“We see there is a huge revenue potential, which comes from the tournament prize, sponsorships, IP (Intellectual Property), merchandising, and TV rights,” said Firmanto.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.