HyperX Esports Arena's owner seeking a "more asset-light approach"

In-person revenues increased by approximately $0.4 million, or 17%, to nearly $2.6 million, driven particularly from Allied Esports’ flagship venue, the HyperX Esports Arena Las Vegas, which opened in March 2018.

2019-11-13

United States

Reading time 1:44 min

The company's CEO said Tuesday it has been approached by several major real estate companies over the past few months. Partnerships like the one achieved in June with a subsidiary of Simon Property Group would allow Allied to run an eSports venue without having to purchase the real estate itself.

Frank Ng, CEO of Allied Esports Entertainment, a California-based company that operates the HyperX Esports Arena at MGM’s Luxor, told investors Tuesday in a third quarter earnings call that the company has been looking to figure out a way “to achieve a more asset-light approach to tackle this market,” very similar to MGM Resorts International announced plans for an “asset-light” strategy.

The company announced a partnership with a subsidiary of Simon Property Group — a commercial real estate company that operates shopping malls — back in June, with Simon purchasing $5 million of stock and agreeing to collaborate with Allied to build eSports venues at its properties.

Ng said the company has been approached by “a lot of major real estate companies like Simon Properties” over the past few months. These sorts of partnerships would allow Allied to run an eSports venue without having to purchase the real estate itself. “A very consistent conclusion is that shopping malls around the world, they’re looking into converting from a shopping center into an experience center,” he said, as reported by Las Vegas Review-Journal. “They all realize that eSports is a very big part of it.”

Tuesday’s earnings call was Allied’s first as a public company. The eSports entertainment company was created on August 9 as a business combination between Black Ridge Acquisition Corp., Allied Esports International, Inc., WPT Enterprises, Inc. and other affiliates.

Total revenues in the third quarter of 2019 increased 10.2% to $6.0 million, reflecting growth from all strategic segments. In-person revenues increased by approximately $0.4 million, or 17%, to nearly $2.6 million, driven particularly from Allied Esports’ flagship venue, the HyperX Esports Arena Las Vegas, which opened its doors in March of 2018.

Multiplatform Content revenues increased by approximately $0.1 million, or 9%, to about $1.0 million for the third quarter, mainly due to the WPT (World Poker Tour) business, with increased sponsorship revenue of $0.2 million being the greatest contributor. Interactive revenues increased by nearly $0.1 million, or 4%, to approximately $2.4 million, also driven by the WPT business, related to product licensing revenue and social gaming revenue.