2023-09-16 09:03:00
This Saturday, more than 27,000 people will gather at Paris La Défense Arena for more than five hours to watch video game exhibition matches. More precisely, they are traveling to see “KCX 3”, organized by their favorite esports team, Karmine Corp. Founded in 2020, this structure quickly carved out a special place for itself in the small world of French competitive video gaming, with unparalleled enthusiasm, led by Vitality, the largest French team.
Not only is K Corp a hit with online audiences, but its KCX (for KC Experience), organized annually, proves that it can move crowds. After filling the Palais des Congrès in 2021 (3,500 seats) then Bercy in 2022 (12,000 seats), the structure sold more than 21,000 seats in the gigantic La Défense concert hall in 48 hours. At a time when esports is in its worst shape, amid deep questions regarding its economic model, Karmine is organizing an unrivaled demonstration in Europe of the sector’s potential. A great show worth two million euros of production, with teams from the four corners of the globe, over more than five hours.
As if to underline the importance of the event, the Minister Delegate in charge of the Digital Transition and Telecoms, Jean-Noël Barrot, plans to make a trip there. “ Part of the sector has oversold esports, we are rethinking the rules, with our real commitment », says Arthur Perticoz, CEO of the company for just a year.
Influence at the service of esports
Karmine Corp takes its name from its two founders Kamel Kebir and Amine Mekri, better known by their influencer pseudonyms, Kameto and Prime. And precisely, if the structure was a success so quickly, it is largely because it took advantage of the image of Kameto, followed by 1.7 million subscribers on Twitch, and himself a former semi-player. -video game pro League of Legends. « Kamel is clearly a key element in the company’s success. He truly has the purest passion for his team », agrees Arthur Perticoz. The streamer comments on all the matches of its structure, at least as much as possible, since the latter is now present on six video games: League of Legends, Valuing (with a men’s team and a women’s team), Rocket League, Teamfight Tactics, Smash Bros Ultimate et Trackmania.
« In sport, most often, people support their city, but in esports we don’t have this notion “, explains Kameto, before elaborating, “ es video creators, with Prime, we brought together a large community and our basic idea was to create a team that resembles this community. So someone had to be responsible for talking with the fans and motivating the troops. »
Since then, other influencers have imitated the model, like the structures Aegis, Mandatory or more recently Gentle Mates, founded by the number 1 French YouTube, Squeezie, alongside two figures in shooting games, Gotaga and Brawks . With its owners at the forefront, the new wave of esports benefits from already established fan communities, but also from real know-how. “ Our expertise is commitment. People like Kameto almost invented influence, they were among the first », recalls Arthur Perticoz. To support his point, the manager proudly notes that the company’s marketing budget on social networks amounts to… zero euros. “ This figure has an effect when I present it in meetings with new sponsors », he laughs.
Sports in crisis
The success of K Corp reflects the overall sluggishness of the sector for more than a year. After benefiting from exceptional investor enthusiasm between the end of the 2010s and the beginning of the 2020s, esports is now going through a period of layoffs and company closures. Who better than the American structure Faze Clan can embody this decline? The company, valued at more than a billion dollars at the end of 2021 and a true standard-bearer of the craze for the sector, fired its CEO Lee Trink, in place for five years and accused for encouraging excessive spending.
And for good reason: in 2022 alone, the structure shows losses of $48.7 million, according to Bloomberg. The company’s stock, set at $13.07 during the IPO in the summer of 2022, is now worth only 18 cents, a dizzying fall of 98.6%. Its teams make no profit and the content creation activity does not generate the expected income. And since esports teams, unlike traditional sport, do not earn broadcasting rights, the wallet is empty. Result: Faze Clan multiplies the waves of dismissals, and its short-term sustainability is threatened.
But this extreme example is only the most visible side. The French structure LDLC, a branch of the eponymous online commerce group, with a much more measured image, also stopped its activities this year. Created in 2010, it was nevertheless one of the oldest on the scene, with one of the biggest records, despite a budget far from the biggest. As noted the team, if the company does not give the exact reasons for its cessation, it mentions a lack of notoriety among the general public, despite recognition among enthusiasts. In 2022, in its grand panorama of esports, Forbes believed that the question of sustainable monetization of the sector remained unanswered, despite growing audiences, with more than 530 million spectators, half of which are regular.
“The marketing coup of a lifetime”
For its part, Karmine Corp relies on three revenue channels: the participation of sponsors, such as Orange, Chupa Chups or Michelin, the sale of products in the team’s colors on its store as well as the sale of digital elements labeled K Corp within video games themselves, organized by certain publishers.
According to Arthur Perticoz, the company generates 80% of its revenues from these last two channels, where the sector average would be around 40%. And for good reason: K Corp sells “ several tens of thousands » of jerseys per year. “ We would be in the top 10 French sports clubs with this figure », welcomes the manager. Upon his arrival, his mission was therefore, over nine months, to consolidate the store, in order to avoid the failures of the first years, marked by stock shortages and delayed deliveries.
The KCX, on the other hand, is not intended to generate profit. On the business side, it is above all a storefront, a unifying event for “ create beautiful images » and impress investors. “ For esports, it’s the marketing coup of a lifetime, there will be hundreds of millions of dollars in the room. Some structures have also invited their own partners to the event to show them what is possible. », Develops Arthur Perticoz. With this show of force, the sector also hopes to advance certain demands, like the request to lower VAT from 20% to 5% for its events as is the case for other cultural and sporting activities. .
An ambitious future for K Corp
Before Arthur Perticoz joined the company, it had few employees and mainly benefited from the teams of the two co-founders. A year later, it has just under twenty employees who take care of administrative and organizational aspects, commercial prospecting and content creation, in addition to around thirty players. Result: following having completed a balanced 2022 financial year with four million euros in turnover, the structure is once once more forecasting growth of 50%.
« Before Karmine, I only set up companies, I know the struggle of not having money. And above all, I have already failed and I know the procedure to follow in order not to repeat the errors », Adds the manager, notably co-founder of the Majelan podcast platform alongside Mathieu Gallet. Kameto recruited him following an exchange over coffee, where the entrepreneur introduced himself as a lifelong fan of Karmine. “ NWe did not have the traditional skills of business management. Arthur’s arrival was important, because he manages to rewrite our good ideas to make them concrete. He immediately has the startup vision », Expands the streamer.
Better structured, the structure is now looking towards an ambitious future. “ I did not come to manage a company that is trying to survive. To enter the closed leagues, the box will need to raise, which means going through an increase in capital or private debt », recognizes Arthur Perticoz. Among the subjects raised almost daily by fans and Kameto himself is the objective of joining the LEC, the best European league in League of Legends.
But the entry ticket costs more than 20 million euros, synonymous with the entry of external shareholders. “ At first, I was afraid of diluting my participation. But with experience, I understand that there are ways of working to maintain great control of the company’s decisions without being in the majority. And then the investors with whom we discuss raisings know that if I’m not happy, they won’t go far », reassures Kamel Kebir.
And to add: “ Now, we really have a well-established long-term vision, with a solid project to prove that we will not burn cash like structures like Faze have done. La Karmine is my baby, I see myself there in 20 years and I hope to pass it on to my children. » The realization of this promise might quickly arrive. In his interview chez the teamKameto promises among its announcements “ a real thunderbolt in the industry “. Answer this evening, at the Paris La Défense Arena, and online on Twitch.
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