Esports business models: HLTV case analysis

29 million monthly visits, almost 3 million unique visitors, 8 minutes of visit duration & $34 million acquisition cost represent one of the most popular esports websites in the world. HLTV.org. Its in-depth analysis will reveal lots of insights into the esports industry.

Betting drives esports sponsorships

Whenever you like it or not, but betting industry support esports websites, streamers & teams with the money. For years betting companies apply the latest technologies to serve connected "iGamer". Better collective acquisition of HLTV.org is a striking example of how far could betting companies go to penetrate the esports industry.

Here & now Better Collective received access to multimillion traffic source, real-time betting analytics, betting operators favourability, esports-related data, internal sponsorships budgets, sales funnel of CS:GO-related betting services & so on.

It's pretty strange when a betting business owns a #1 CS:GO website in the world with a unique ranking system and whole game-related activities analytics platform. It just means that more esports fans will spend money on betting. $34 million is the cost of the CS:GO future.

Why HLTV.org matter?

You will be surprised by how bad HLTV design is. It was created years ago & didn't changed a lot. Website owners are afraid that esports fans will leave once their favorite product will be updated. This is pretty odd (because evolution drives better UX/UI & client satisfaction), but at the same time... working really well.

So why millions of people visit HLTV with outdated design & advertising mess? 2 key factors:

1. Hot news.
2. Unique data sets & it's analysis.

HLTV supply community with the latest CS:GO related news. They cover events, reveal insights, make interviews, shoot photos, upload fresh replays & deliver tons of CS:GO content. It's just the center of CS:GO universe.

Here & now HLTV is the leading scoring & data-aggregation engine for the CS:GO. The website measures almost everything around esports from the best teams in the world ranking & to the most efficient players.

CS-fan driven website became not just market benchmark but proven that innovation could come from the community - when the team around HLTV has proven it's expertise, carefully selected right business model (before there were times when they got almost bankrupt) & found the right timing when betting companies penetrate the market.

Millions of people use HLTV as kinda IMDB when you could track all game-related data from historical to live data. It's a big data of Counter-Strike from events to personal athletes achievements. Each year they add more data, so it's nearly impossible to beat their market positions, especially, when they are recognized by Valve (game publisher).

Note that esports customers are truly global. HLTV biggest customer bases come from Russia, China, Brazil, the USA & Poland. Which means that in order to succeed you need to stay relevant to different nationalities, countries & cultures. That's the challenge of operating in a globalized world.

Show me the data & I will tell who you are

HLTV.org, OP.GG, Liquipedia proves that data is what matters most for the esports fans. When will be the next match, what was the result, how my favorite player performed, how good he is within 1 year period? These & many other questions are answered within industry data aggregators.

Suddenly, publishers could concentrate on the games & entrepreneurs on the data sets. Ecosystem startups to build around games & not around publisher' will.

Do you remember online-forums? Old, but a gold way of people to communicate online. And it's still relevant to esports! Why:

• It's not format, but rivalry matters. Thousands of people clash in comments discussing players, teams & the results. Rivalries between favorite teams & players accelerate global text battles. 500 comments to 1 news? HLTV visitors answer: "easily!"
• Esports is dedicated to competition. That's why you should always keep in mind the personal preferences of esports fans (teams, heroes, players, coaches) - they foster conversation & user engagement.
• Esports is full of drama. It's a perfect Hollywood script: one team lost-another win, s1mple finished 2nd last year, but now he's dominating the scene, fall of super-teams like Faze Clan, benched legends like Pasha Biceps...

Note that esports fans' communication is full of hate speech, racism, sexism. It's really important to think about your work with the community (example: Twitch is banning them & receives lots of negative reviews from the audience, still not losing their traffic). Esports fans don't like censorship or branded tyranny.

Forum is also alive because social media failed to deliver tailor-made esports experience. So thousands of CS:GO-related fans prefer to spend their life on HLTV instead of Facebook, Instagram & other social media. You could name it a "micro-community", but it's massive in numbers & scale.

Desktop vs Mobile: user experience nuances

Go and read esports-driven mobile apps customer feedback. You will found out that esports fans are hyper-active & speak out easily - they hate the majority of esports apps from the Activision Blizzard Overwatch app to the HLTV app. It's striking how product loyalty lose when your product experience is weak.

Be ready to deploy new releases faster & faster if you launch a mobile-centric esports product. Esports customers will rapidly provide feedback: what they like & what they hate. Keep in mind these improvements & deliver a new version ASAP. The last HLTV mobile version was released in January, that's why it's rating is so low & the first feedbacks are 1 or 2 stars.

In search of the perfect business model

HLTV is constantly trying to add more revenue streams & polish their business model. HLTV revenue streams:

• Advertising (banners, advertising networks)
• Betting odds
• Fantasy league
• Online-shop
• Optional: analytics for betting companies
• Optional: special projects for betting companies

LEC recently launched beta-version of its Fantasy League developed by Spanish LVP. The instrument is helping the league increase consumer engagement & attract more money from the sponsors. HLTV has its own Fantasy Leagues sponsored by the betting companies. They help to increase performance KPIs of betting companies & influence more customers to register on betting websites. But at the same time, Fantasy leagues help esports fans participate deeply & actively in their own esports tournaments. We will see more cross-overs between real & second screen esports tournaments in the nearest future.

Online commerce is the future of esports, but hardly anyone could prove that they master this channel. G2 & 100 thieves sold their jerseys in minutes, but here I'm talking about a strategic approach to multi-branded merchandise stores that sell different items from teams all over the world. It's painful business from logistics & stock issues, but once ecosystem players will exchange supply&demand data on merch - we will see more sustainable esports items-as-a-business models.

Here you see how HLTV became a betting marketplace making money on everyone interested in esports betting without limiting their profits to exclusive deals.

Conclusion

HLTV proves that the most sustainable business models in esports should be built around data. And it doesn't matter if its B2B (like Stream Hatchet) or B2C (like HLTV) data. B2C audience still doesn't want to pay for esports data, so the data should be provided for free & monetization could come from the partners (advertising, revenue sharing, online-store items, fantasy league etc).

"Know your B2B client" is the main challenge for the majority of B2B businesses. Note that HLTV has chosen betting businesses over non-endemic FMCG, Automotive, telco companies - you wouldn't see any special projects of those on HLTV. Even advertising network placements of non-endemic are rare on HLTV. It's the price of working with the betting industry. It works in the case of HLTV but isn't scalable with all the esports businesses.

And finally, your esports product could look really bad. But you will succeed once your value to the consumer will be really tangible & unique.