Fandom Takes Big Step In The Esports Market With Private Beta Launch In China
The Esports market is growing in popularity across the globe, but nowhere is it more popular than in China. Tencent, the world’s largest video game company and the leading player in the Chinese Esports market, has grown to a market cap of well over half a trillion dollars. It has tripled in price since 2016 and added over $400 billion to its valuation. Fandom Sports Media (CA:FDM – $0.39 & US:FDMSF – $0.30 & GER:TQ43 – €0.24) understands the opportunity of the Chinese Esports market very well. It took a big leap forward to actually capitalize on the opportunity by announcing the launch of the private beta for its all ages Esports app for the Chinese market this past week.
The beta test will take four to eight weeks to complete. A small group of potential partners in China will conduct the initial tests, with a larger group conducting tests shortly thereafter. The app is enabled with Mandarin language support and will be loading data and gaming content that’s relevant to the Asian Esports community. This is all made possible by the versatility of Fandom’s Esports platform. Once launched, Esports fans in China and the rest of the world will be able to win and earn Fancoins on the platform complete with badges, prizes and other leaderboard functionalities.
While Fandom’s apps are in the testing phase, the Company took another step forward in ensuring that they will be something desirable once they go live to the general public. It announced a partnership with Sportradar, the global provider of real-time sports data services, to use on the Company’s Esports engagement platform. As a result, Fandom will be able to offer a wide array of live, in-game content services for League of Legends, Counter-Strike Global Offensive and Dota 2. This will enable users to make real time predictions on the Fandom Esports App.
CEO David Vinokurov pointed out the importance of this deal along with the earlier announced partnership with Esportz, stating: “The addition of Sportradar’s live data complements the recent partnership announcement with Esportz Network which is providing Fandom Sports with Esports related content from a network of global journalists. The aggregation of diffused data and content across the Esports landscape will allow the Fandom Esports App to assume its position as a trusted community for Esports SuperFans. We will continue to execute on our content aggregation strategies and leverage each new content/data partner to grow our footprint and relevance across the Esports industry.”
This would be no different than a sportsbook. Sports bettors are accustomed to live game betting and immediate access to odds as well as updates to the game’s action and commentary either through watching it live or through real-time data feeds. Fandom is trying to build a similar concept both for the all ages and real money apps.
Fandom Adds To Its Advisory Board
We have made note of Fandom’s impressive Advisory Board as one key element to the Company’s future success. That Advisory Board just got a little bit stronger as it added successful entrepreneur, well-known marketer and author Rick Padulo. Of particular interest is his experience in handling the advertising account for Poker Stars. This experience will no doubt be invaluable as he is tasked with assisting in bringing relevant advertisers and sponsors on board along with crafting Fandom Esports brand identity. He was granted 200,000 FDM stock options at a price of CAD$0.37. We think that is a pretty cheap cost to bring him onto the Advisory Board and a sign of how bullish he is on the future of Fandom. The stock price is going to have to be significantly higher over the next five years in order for Mr. Padulo to get a payout that is material to him.
His excitement over the opportunity and belief in his ability to assist the Company is apparent by his comments: “Fandom Sports’ unique and innovative Esports ecosystem that covers both social interaction by SuperFans as well as real money wagering is a unique and an industry leading value proposition. My contacts and past experience have provided with a unique insight into the potential of this exploding industry. I believe that Fandom Sports is positioned for a quantum leap forward and I’m excited to be a part of the team.”
FDM is trading at $0.35 on the Canadian Securities Exchange in Canada, a CAD$11 million market cap. Every time we check in with the Company, it appears to be getting a step or two closer to executing on its plan. It’s currently in beta testing of its English and Mandarin version of its all ages app while signing partnerships and adding features and functionality.
Moreover, it’s evaluating a beta test for an app in the Middle East. Also, it’s setting the stage for its Esports gaming app as its Curacao gaming license application is in progress.
Fandom’s aggressive move on several fronts is why we think this is an ideal time for risk tolerant investors who want to get in at the ground floor of a compelling Esports business model to make an investment. This is also why we have a target that implies over 3x upside at these prices. Smallcaps Recommendation: BUY.
|Smallcaps.us Advice: Buy||Price Target: $1.26||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|