A featured article on the LA Times focused on city neighbour Azubu this week as rumours emerge that company is set to announce its acquisition of Hitbox and that it’s in recovery mode following a tough Q1 in 2016.
Alongside the Hitbox news, the most significant takeaway from the article is that it is claimed that League of Legends streaming costs rose from $1 million previously to $3 million in 2016.
The article goes into vast detail about the funding of Azubu and how Sapinda Group, which is owned by investor Lars Windhorst, is said to have plunged $40m, ‘$1 million or so a month’, into the company.
It didn’t take off as Windhorst planned and in a tough 2016 there were a lot of problems including unpaid vendors and a confused strategy ‘according to interviews with 10 people close to the company’. If competing with the hard hitter of Twitch wasn’t hard enough already, the article states that Azubu lost out to rivals when ‘it could no longer afford the rights fee for League of Legends matches, which rose to nearly $3 million from $1 million in the past, according to people familiar with the matter’.
Since then however a new CEO in the form of Mike McGarvey has steadied the ship. McGarvey came on board in May last year, replacing the outgoing Ian Sharpe who left to form a firm of his own, and quickly set about cutting costs. He did this to the tune of $1.2 million which meant expenses had been cut in half. The company is reportedly set to announce the acquisition of Austrian service and competitor Hitbox for ‘tens of millions of dollars in cash, giving them as many as 20 million monthly viewers combined’. The piece (published on January 9th) states that this announcement will be in the next few days.
It was also noted that Azubu will be relocating but remaining within Los Angeles in the near future. In short, to answer the title question is that there’s an awful lot going on at Azubu right now. So expect more announcements soon.
Esports Insider says: If Azubu does indeed acquire Hitbox then it becomes a vastly enhanced competitor to Twitch’s esports streaming throne. The full LA Times piece is definitely worth ten minutes of your time today.