Abios’ decision to sell to sports betting provider Kambi for SEK270m (£22.6m/€26.4m/$31.1m) highlights the esports vertical’s emergence as a key growth channel for the gaming industry. But as the esports betting market becomes more crowded, can the sportsbook supplier’s acquisition of the data specialist help it stand out?
Oskar Fröberg, founder and CEO of Abios, speaks to Marese O’Hagan about the growth of esports, product integration and Abios and Kambi’s long-term goals.
As proven in part by the novel coronavirus (Covid-19) pandemic, esports has moved into the mainstream.
“Esports betting found a surge in popularity as several regular sports competitions were cancelled or postponed during the pandemic,” says Abios founder and chief executive Oskar Fröberg.
“Although we don’t see the same level of hypergrowth post-pandemic, there is still a stable increase in demand.”
From this perspective Abios’ decision to sell to Kambi is reasonable, given the sportsbook technology provider’s wish make a name for itself in this fast-growing market. Acquiring Abios, as opposed to developing its own esports capabilities, allows Kambi to accelerate its entry into the market and diversity its product offering.
For Abios, the acquisition also speaks to its trust in Kambi as an institution.
“It was important for us to find a synergistic partnership where both parties could benefit,” says Fröberg. “We believe Kambi to be the optimal partner for Abios after having built a strong relationship over many years.”
As the integration begins, so does the endeavour for a profitable partnership.
Product integration
With the ink on the contract now dry, the question turns to how Kambi and Abios combine their individual capabilities into a single synergistic offering.
“Abios is still going to be its own entity and continue serving esports data and technology towards new and existing customers,” confirms Fröberg. However, he believes that the collaborative aspect of the pairing has the potential to propel it forward.
“With Kambi’s expertise in the betting industry and team of dedicated esports traders, we will be able to accelerate the expansion of our odds-product and become an even stronger player in the data rights acquisition space.
Currently, Abios serves esports data and products for more than 65 companies. They also hold data rights to popular events in the esports scene such as Fragleague.
Nonetheless, in today’s fast-moving world of technological development, it is becoming more difficult to create a truly unique product.
With how esports is advancing, a duality emerges in product potential. On one hand, new opportunities are opening up for fresh, innovative ideas as the market expands. Conversely the market is filling up as operators recognise the true potential of esports.
In Fröberg’s opinion, product innovation is the key in appealing to customers.
“To truly enable the growth of the esports betting vertical and make the esports betting experience engaging for punters, the product-side must be developed further,” he adds.
“Sportsbooks and suppliers do offer esports, but compared to the mature sports betting market the esports segment is still in its infancy.”
But in order to thrive, Kambi’s acquisition of Abios must not only focus on the product platform, but also on potential marketing opportunities.
Marketing and acquisitions
Although in its early days, Fröberg has a hopeful scope of both companies’ futures post-acquisition.
“We want to enable the growth of the esports industry by providing highly qualitative esports data and technology across the globe,” muses Fröberg.
“With Kambi, we can accelerate our product development and roadmap. This will hopefully enable us to create even better products and customer experience for the esports industry and its stakeholders.”
The roadmap begins with cementing this symbiotic partnership, then monitoring its potential to uncover path to success.
In terms of prospective markets, the combination is looking towards the United States as an increasing amount of states welcome esports betting. At present, 27 US states have regulated sports betting – with provisions for esports included in legislation – and an increasing amount of US sports teams have entered into partnerships with esports betting providers.
As such, Fröberg reveals that the US is an area of increased opportunity for the combination to explore.
“For esports betting, the US is of particular interest as the market is experiencing a wave of regulations that make esports betting legal in many states,” he says.
Esports is also booming internationally. According to a report from the Asian Racing Federation, global esports revenue reached $13bn in 2020.
The future of esports
Supported by projections of further growth, Fröberg has a bullish outlook on the future of esports.
“The esports market will continue to grow, as it still hasn’t reached anywhere near its full potential in terms of monetisation,” he says.
However, with the monumental growth of esports, the business combination must act fast to get ahead of the curve.
“The industry is incredibly dynamic in the sense that new games can pop up out of nowhere and get high levels of traction quickly,” he explains. “If the game is competitive enough, an esports scene can evolve.”
This could contribute to a high-pressure environment. As Fröberg says, Abios and Kambi must work to essentially predict the next popular game, or what punters may want to bet on next.
“All actors, and especially us, have to continue being quick on our feet adding new games to our offering when we see demand,” Fröberg explains.
“This trend is likely to continue.”
With such as optimistic assessment of the growth prospects, it is unlikely that Kambi will be the last sportsbook business to move into the vertical.
Original Article
