Academy19 May 2021 12:04
Academy potential looks impressive to me.
£4.99/month subscription plus potential player transfer fees in the future plus added exposure for sponsors.
The questions are uptake and scalability.
Uptake. We will see over the coming months and years when they release figures, but until then it’s guess work. Guild have signed a lot of content creators recently and also have a lot of professional players with big followings, especially in Fortnite. Combined social media following at present is now over 13m and growing all the time. And almost all of them will be avid gamers. If only 5% of these followers signed up to the academy, then that would be 650k subscribers, which would be £40m revenue per year. The potential is certainly there for big uptake and revenues, but we will have to await official updates for true figures. I would expect some comments on this at H1 results time at the latest, but hopefully before.
Scalability. When I was discussing this with a friend and fellow investor, he questioned the ability to service 100s of thousands (or potentially tens of millions) of subscribers. He said, “It’s not like Netflix, you have to actually train these subscribers”. I told him I think he’s missing the point and that it is just like Netflix, but for gaming and with additional revenue streams. Guild have an army of esports players and content creators. They post videos with commentary of their gaming as tutorials. This will build up a library of content for the basic £4.99/m academy subscribers / players. Guild then also put on regular tournaments for these academy players to put their skills to work. Only the later rounds of the tournaments get critiqued by the Guild pro players, again produced as tutorials. This then provides a never ending stream of content for the ever growing library. Guild do not have to individually coach every subscriber for this setup, but all those in the academy still get enough content and tournament opportunities to justify the £4.99/m. With this sort of structure, you can encourage and accommodate as many £4.99/m basic subscribers as you like, in a similar model to Netflix subscribers. Then, if individual subscribers want some more detailed coaching, even one-on-one sessions with a Guild pro gamer (who they follow and idolise on social media and streaming services), there are different levels of subscription (at higher costs) for that.
It remains to be seen how successful the Guild academy will become, but for me, the opportunity looks enormous, and it beggars belief that the share price has fallen since its announcement.
For balance though, my friend said he was going to buy a few shares on the off chance I’m right, but for the most part looked at me like I’m some sort of lunatic! I told him I’ll buy him a Guild hoodie for Christmas when he’s an avid fan and his kids are in the Academy...
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