In a press release on Thursday, one-day fantasy sports (DFS) industry leader in, FanDuel announced its acquisition of leading fantasy eSports (DFeS) platform AlphaDraft. A blend of live streaming and fantasy sports contests and eSports, FanDuel’s first product for the eSports community brings with it AlphaDraft’s “employee base in-house to help create a one of its kind daily fantasy product specifically for eSports,” according to a press release on venturebeat.com.
Just a day before FanDuel’s purchase, industry rival DraftKings announced its partnership with six eSports organizations and officially launched contests based on League of Legends. The purchase by FanDuel enables the DFS giant to reach new sports fans and instantly compete with DraftKings who moved quickly to release its fantasy eSports product. The move by both companies is just in time for the October 1 start of the League of Legends World Championships. According to Venture Beat, FanDuel CEO and Co-founder Nigel Eccles said, “With over 200 million people globally watching eSports, AlphaDraft gives those fans a way to engage with this burgeoning entertainment product that creates an enormous opportunity for us.” Eccles added that, “This is sports for a new demographic, with very little crossover with what are considered traditional sports fans, and this acquisition gives us the ability to leverage the expertise of AlphaDraft’s team, while helping their efforts in customer acquisition and building awareness of this new industry. It’s a win-win.”
DFeS is essentially the same as the DFS product; they both have similar core elements such as competition structure, promotions, and contest lobby among others. The main difference is that players of DFS build rosters from actual athletes competing in traditional sports, while in DFeS contests players rosters consist of “fantasy” athletes in eSports like League of Legends and Dota 2.
According to a report on legalsportsreport.com, FanDuel’s purchase of AlphaDraft closely follows its acquisition of next gen sports analytics site numberFire, leading mobile app developer, Kotikan, who developed its mobile app, and an employee pool of about 40 from a closed branch office of Zynga in Florida. The acquisitions are in keeping with FanDuel’s goal of enhancing the sports experience, and building its product by aggressively investing in infrastructure and acquisitions. In addition to FanDuel’s 2015 acquisitions, the company has plans to open a new office in Glasgow and expand into a new office in Edinburgh according to the Legal Sports Report.
To date investors in AlphaDraft include former NBA Commissioner David Stern, Freestyle Capital, IDG Ventures and Melo7 Tech Partners among others. Last year eSports generated approximately $612 million in revenue and an estimated 13 percent of the entire live stream audience watching eSports. The industry anticipates that by 2017 the number of eSports fans will come close to mirroring that of footballs fans and DraftKings and now FanDuel will share in reaping the rewards.