Heroes in Business - Jonathan Anastas fmr CMO Atari, Activision, Board Chairman AlphaTech

Episode Date: October 4, 2021

What you need to know about gaming and the coming explosion of esports. Jonathan Anastas, former CMO Atari, Activision, Board Chairman Alphatech is interviewed by David Cogan founder of Eliances and famous celebrity host of the Eliances Heroes Show broadcast on am and fm network channels, online syndication and on over 100 TV channels.  

Welcome back to Alliances Heroes, where heroes in business align. To be part of our super community and find out more about Alliances, visit www.alliances.com. That's right. And again, just another amazing day. You know what I realized I was thinking the other day? We've done over a thousand interviews. Can you believe that? Over a thousand interviews. Who does that? I mean, we've got just so many incredible people and the demand is out there because people learn from our show. They learn from the people that come on our show. I learned so much from the show. It's just truly amazing.

And I really appreciate, again, thank you for the feedback when I had on Lee Steinberg. So make sure you check it out by going to eliances.com. That's E-L-I-A-N-C-E-S.com. All right. I'm sure you've heard of eSports, eSports this, eSports that. I mean, eSports is huge. And we're going to learn more about esports today because it is such a in demand I mean it's like its own I think it's its own industry now and and everything too because we're going to learn from Jonathan Anastas who is the board chair at Alpha Esports and you could reach him by going to alphaesports.com. So Jonathan, first of all, how did you get involved in esports? What were you doing prior to that? Sure. So first, thanks for having me and congratulations on over a thousand interviews. Very, very, very impressive. So I ended up in

gaming for a couple of reasons. First, I've been a passionate gamer since I was a kid and have continued to game from my teens into my adult life. And I ended up doing a lot of marketing and advertising work around millennials, Gen Y, Gen Z, which led me to gaming and led me to my first brand side role in gaming at Atari, legendary game publisher, the gaming brand that got me started as a kid. From there, I ended up spending over five years at Activision, which is, you know, really like playing for the Dallas Cowboys of gaming, you know, like the world, you know, the largest game publisher in the West, for sure. And we were at the forefront of esports with Call of Duty, where we were doing some of the very, very early US leagues and teams with a company called Major League Gaming that we ended up acquiring. And I did all the marketing for that early esports stuff. And from there, I went to one championship that launched one esports, which is taking

this explosive category of gaming and esports to Asia, which has some flavors and some differences that we can talk about versus the West. And I had the opportunity to join Alpha, which is built with Gamers Arena, one of the top esports gaming platforms in the West, for sure. Unbelievable. Boy, you know, I mean, you're doing whatever everyone's childhood dream is to be able to do it. I mean, did your parents ever say, hey, turn off the Atari, and now you can come back and say, yeah, I'm lucky I kept it on. Absolutely. I'm sure my parents had a lot of fear about the time I spent gaming when I was a kid. But the interesting thing that's what's changed in the last 20 years is that the research has shown that gaming builds self-confidence with kids. Gaming builds motor skills with kids.

Gaming builds the brain. There's been a ton of research in this category. I am now the father of a four and a half year old, and I encourage his early gaming. And I can see the self-satisfaction he gets as he progresses and gets better at things and unlocks things. Like it's active entertainment.

It's not passive entertainment. So I am certainly not saying that to my son. I think it's active entertainment. It's not passive entertainment. So I am certainly not saying that to my son. I think it's incredible the fact that people can play with other people, talk, communicate with them from all over the world. Because remember the olden days, Jonathan, right? Someone had to come over to your house. You had to have another extra joystick for them. You can only play with so many people at one time. Completely agree. And you saw the explosion of gaming during the pandemic, time spent, you know, what happened to the gaming stocks. I truly believe gaming allowed human connectivity at a time where people deeply, deeply needed it during quarantines

and shutdowns. And contrary to a lot of what the conventional wisdom has been about gaming long term, I believe that gaming improved a lot of people's mental health during the COVID pandemic. So tell our audience in the end, so what is Alpha Esports? Alpha Esports is the holding company that invests in gaming-based IP and gaming-based products. Our hero product right now is a platform called Gamers Arena, which is an online platform that allows gamers to connect, play the games that they love in tournaments for cash prizes, build audiences, build fan bases, and then export that content into their social grids and their social platforms so they can take their highlights, their best clips, all those things.

And in addition, we have a blockchain-based currency called AlphaEcoin that allows people to sort of participate in the blockchain through their loving of gaming. And how did all that come to be? I mean, that sounds pretty complex to put together. Well, you know, we had a great founder who built the product and came in and we built a company around it and took it public on the CSE about 150 days ago. And now we have over 125,000 users. And now our job obviously is to scale that user base and scale those tournaments and scale the company. So how does it work as far as, do people have to qualify for a tournament? Talk to us maybe about that. Is it prize money that people are winning? Entry fees?

Explain for maybe some out there that here we use sports, but they may not be so familiar with it. Well, I'll talk about the category of esports tournaments and how that works, and I'll also talk about gamers. So broadly, esports looks like any other sport, like soccer, right? There's everything from the most grassroots, most casual, people get together and just gaming and multiplayer games, you know, amongst close group of friends, to amateurs, high schools, colleges, into like the pros, which is the most elite level. And you have to sort of grind your way and earn your way up like you do in any other sport, right. So that's the category as a whole.

So if you think about the kind of people that play at the Call of Duty championship level when I was at Activision, those are those are the best Call of Duty players in the world. And it takes a lot of work to get there. What I think is really interesting about Alpha is it's the first platform built around the amateur gamer. Right. There's people who are intimidated by or don't have the skills for the more professional platforms. And they would like to build the skills and earn their way up there. But for today, we've built a safe community where people of their like gaming skill can be around them, where they can get better together. And what kind of things can people win? I mean, do they win cash prizes? Do they win other prizes? do they win cash prizes? Do they win other prizes? So on Alpha Esports Tech, you know,

and with Gamers Arena, they're earning AlphaCoin now, which is a cyber currency. And before they were winning cash prizes. And again, if you go from like the micro to the macro, you know, they might play for $50, $100, $250, $500, $1,000 on our platform. You know, you get up to the top level of this field and people are playing, you know, for million, $5 million, $500, $1,000 on our platform, you know, you get up to the top level of this field and people are playing, you know, for a million, $5 million, $10 million prize pools, right, overall. I mean, that's the scale that the industry has taken. And the industry's, right, is it just continuing, just growing and growing? So it's about a $1 billion industry today. And the interesting thing is I actually think that's highly undervalued. So if you look at audience, there are esports events that outperform some of the largest traditional sports for viewership amongst the most valuable demographic of 18 to 34-year-olds. And so I believe it shouldn't be a billion-dollar industry.

It should be a $2 billion industry, a $5 billion, a $10 billion, a $100 billion industry. And it will get there someday. I just came from the Sports Business Journal Leaders Forum in Tahoe this week. And there's people from traditional sports and all different kinds of sports. And they were sort of doing a poll of the audience. They are all senior executives. What sports do you think are going to be the sports of the future that have the highest growth trajectories? And by a great majority of the participants there, and we're talking about people who are at NHL, NBA, NFL, MLB,

all sorts of different sports, they almost, to the person named esports, as the sport they thought would have the most explosive growth in the next five years. Yeah, I mean, I think, and people are making, some people are doing their whole career, right, is becoming gaming. Yeah, and there's two levels to

that right so we built a two-tiered ecosystem of professional gamers they're professional gamers who have salaries and prize pools from being gamers and there's also professional gamers who are earning media rev share money on platforms like twitch and youtube and facebook and instagram where they are monetizing a little bit in the same way that, you know, so Conor McGregor was the most highly paid athlete last year. A small percentage of that money came from his prize pool, right, in the UFC. A large percentage of that came from his outside business pursuits built by his UFC fame. There are a lot of professional gamers that are signing deals with YouTube and Twitch that are in great multiples of their actual prize pool. But again, this is very common to all sorts of athletics, right? To tennis players, to F1 drivers.

So again, the ecosystem is beginning to look a lot like other mature sports where there's sponsorship, there's media rights dollars, there's direct-to-consumer brands. There's all these monetization opportunities that have been open to other sorts of professional athletes for decades. Right. And that's what surprised me because I remember when my son would be watching other players play. And I'm like, aren't you just why aren't you playing the game? And you would want to watch to continue to increase his skill. And then, of course, what do we do with professional sports?

We're watching professional sports players. So how is it any different? And then, you know, it clicked and that's what's happening. And I actually think esports players were ahead of this. So if you look at like what LeBron James is doing now, sort of building a media ecosystem and a media empire around what he was doing with sports, he's actually in some ways barring the model that existed in gaming at first. So if you go back to the most early days of esports, well, he wasn't a professional player. When I was at Activision, we were writing checks to Post Malone. He was a Call of Duty influencer.

He used to create Call of Duty content on our behalf. He built an audience and went and signed a recording contract behind the power of that audience, and look at where he is today, right? So to some degree, when you look at what LeBron's doing with his movies and television shows and media empire, that's actually sort of following what the ninjas of the world have been doing for years, for half a decade. Can you believe from where you started as such a youngster playing Atari to,

I mean, do you ever just look back and going, like, I'm living the dream. I'm able to do what I want. I'm doing what I was doing as a child. Now I'm continuing to grow. I mean, it'd be surreal for me. How's it for you? Totally surreal. And it was interesting.

There was a period in there professionally when I was working in ad agencies and I wasn't in gaming, though I was often working on video game accounts. But, you know, I think it took a minute where we went from sort of like, you know, the basic Atari 2600 to the world that we exist today, right? Where gaming is a multi-billion dollar global industry, right?

But yeah, I mean, to truly do what you love every day and what you believe in every day is absolutely living the dream, right? Like I believe in the power of gaming to like build confidence with kids. I believe in the power of gaming to create communities. I believe in the power of gaming to monetize, right? You know,

there's companies on the Fortune 100 that are gaming companies. How do you see VR eventually playing a role or will it play a role? So I think we've got to figure out VR, right? I think there was a huge belief in VR. Like, if I go back to, you know, CES, which is the largest, you know, gaming trade show five years ago, you couldn't go anywhere without seeing VR, right? But then there was a big step back because to some degree, if you think about very immersive gaming, like Call of Duty,

when you're spending that much time playing, our research sort of showed a high level of motion sickness from VR, right? And then in the gaming world, there's often a talk about tie rates and tie rates are between hardware installs and software installs, right? So if you think about when there's a new console, if there's only a million of them out there in the world or 5 million of them out there in the world versus 50 million or 100 million or 500 million consoles or mobile phones people can play on, the hardware adoption was much slower than people thought. And so you saw a step back in VR from sort of core gaming.

But what you saw was advances in AR, right? Pokemon Go and AR kind of stepped in in a way and sort of said, hey, we may not be ready for multimillion dollar VR gaming, but we absolutely are ready for multimillion dollar AR gaming. And so I think you're going to see a step forward, a step backwards, a step forward, a step backwards, as we sort of figure out what the best uses of these new technologies are. What kind of advice do you have for others that are, you know, young adults that, you know, high school and stuff, and they want to get into this type of industry like you have? I mean, you know, how, what kind of things should they be doing now to be able to eventually get into the industry of working for some of like very successful companies that you've worked for and who you're working for now? Like what type of skill sets do these type of companies,

are they looking for? Well, let's separate the gamers from the sort of business side of it, right? Because of the gamers, that world is still like you're betting on the dream and you're betting big how many soccer players you know who in fifth grade end up as professional players or high school football players or whatever so that is still like the one in a million shot right however there's probably you know activision employs 10 000 people you know like ea employs 10 000. There's hundreds of thousands of professional jobs every year in gaming. And the beauty of it now is unlike when I started, there's high school programs about gaming and esports. There's college programs about gaming and esports. And it's part of how we've had success and traction at Alpha is we've signed a lot of

partnerships with colleges and universities and high schools even in addition to pro teams, because in preparing people for these careers, this multi-million dollar industry that didn't really exist, you know, when I was in high school, there are now educational programs. That said, at least most of the companies I know still look for strong liberal arts backgrounds, right? And again, it's like going to technology. If you want to end up making games,

right, then STEM is the way to go. If you want to end up in marketing, you go to business programs, you take liberal arts degrees. So I think there's still paths, but the opportunity is there's educational specialty programs now that just didn't exist. But again, I think people are looking for passion about gaming. They're looking for, you know know broad skill sets you know your ability to communicate your ability to write your you know liberal arts skills you know i think you can come out of any great liberal arts program in the world and get a job in gaming you know but it's that they're looking for that combination of like you know intellectual curiosity work ethic and passion you know when i was interviewing for the job at activision they wanted to see my gaming scores they wanted to see that i was a real gamer is that amazing part of

the process part of the interview process what's your gamer tag i want to see how good you are at this i love it well jonathan amazing what you're doing board chair of alpha esports.com make sure you check out alphaesports.com. Jonathan, a pleasure. Keep doing what you're doing, bringing joy to so many, giving an opportunity for people to get into the gaming industry. So make sure you go to

alphaesports.com where you may have the opportunity to play for prizes. This has been David Kogan with the Alliance's Hero Show. Thank you so much, David.