Content group Mobile Streams delivers world class content via leading data intelligence to a global audience
“…If market momentum begins to swing back to tech MOS might be an interesting play: an ambitious company, debt free with climbing revenues, positioned to capitalise on cutting edge trends in the online gaming world….”
Mobile Streams (AIM:MOS), a mobile content and data intelligence company that has been listed since 2006 has undergone something of a reinvention over the past two years, embracing the metaverse, blockchain, NFTs and other avant garde technologies with the passion of a start-up.
MOS has long distributed games and other content tailored to mobile devices to an international client base, with a particularly strong presence in the Argentinian market. A new Board was appointed in late 2019 to shake things up, led by CEO Mark Epstein, co-founder of Krunch.ai, a market research and intelligence platform, and IgniteAMT, a digital transformation company. Mr Epstein, together with MOS Chief Product Officer Tom Gutteridge, also co-founded and ran the UK’s largest ever digital voter registration project.
In 2020 MOS leveraged Mr Epstein’s background to launch Streams, a data insight and intelligence platform based on the KrunchData framework (which MOS now owns). The platform, which can be accessed online, uses AI to help customers assess how their content is being consumed, and to discover emerging content trends. Last year MOS launched its LiveScores football 365 content service, initially in Argentina, Brazil and Mexico. And this year the company has signed a pair of significant agreements extending its interest in the emerging Non-Fungible Token (NFT) market. Speaking to TMS earlier this month Mr Epstein said MOS was positioning itself for the mainstreaming of NFT technology: ‘It’s a game changer. If we can unlock it … We’re aggressively active in this space. We have a large pipeline of targets that we are actively engaged with.’
The new focus seems to be gradually pulling MOS from dependence on an Argentinian market which when beset by challenging conditions, as it was last year, can have a significant impact on the company’s performance. MOS’s results for the year ended 30 June 2021 attributed a fall in revenue to £0.395m (2020: £0.636m) to an adverse environment in Argentina, which accounted for 58pc of the company’s revenue. Trading EBITDA (calculated as profit before tax, interest, amortisation, depreciation, share based payment expense and impairment of assets) was negative £0.94m for the year (2020: negative £0.610m). MOS was, however, debt free, with a net cash balance of £1.7m. And the new Streams service was beginning to bear fruit, generating revenues of £0.137m, more than the £0.85m from the legacy content business. Interim results for the six months ended 31 December 2021 showed the picture continuing to brighten. Revenues were £0.3m (31 December 2020: £0.2m), and cash was £1.4m (31 December 2020: £1.1m). Revenue growth from the company’s new content businesses was growing, offsetting the decline of the historical business.
MOS has confirmed its new trajectory with a string of bold announcements this year. In January the company partnered with esports and gaming services provider International Gaming Systems (IGS), which will make its content available on MOS’s mobilegaming.com website. Under the terms of the revenue sharing contract IGS will ‘deliver minimum revenue to MOS of $0.72m over the first six months’. Services began this year with the initial launch of a FIFA Esports tournament involving a top Eurasian football league and a trading service for online gaming skins. The following month MOS and IGS extended their partnership with the launch of Battleriff, one of the world’s leading global gaming platforms, which has hosted more than 3,500 esports competitions. Opportunities ‘will include licensed NFT content, branded merchandise and Skins trading’.
February also saw MOS take sole ownership of the LiveScores services that it had previously been operating under a revenue share agreement with Quanta Media Group, giving it control over the service’s underlying platform engine, domains and IP. LiveScores contracts have extended beyond South America to Italy, India, Turkey and Africa. MOS further extended its presence in India through a new partnership with Vodafone India, opening access to 273 million customers, and the launch of ’11 Wickets’, a virtual online game in which users build and manage their own team, through the country’s largest phone network, Jio. According to a Ficci-EY report, the Indian fantasy sports industry is expected to reach $2.5bn this year, and grow at a compound annual growth rate of 32pc to reach a value of $3.7bn by 2024.
In March MOS announced further positive sales figures, stating monthly revenue of more than $150,000 per month across all channels, an increase of 87.5pc since the company’s last update. A fundraise the same month brought in £1.2m to further develop mobilegaming.com, the site through which the company is focusing its gaming and esports offerings.
Two major announcements underline the company’s commitment to the emerging esports NFT market. An NFT is an unique digital item, the identity and ownership of which are verified by blockchain technology. Forecasts have indicated the global NFT industry could be worth $122bn by 2028: the sector generated $17bn in sales last year. In April MOS became an exclusive NFTs producer for Fanzine Limited, which produces content for a global audience of three million football fans, operating 41 club-specific premium domains covering top football, NFL, NBA, MLB and cricket clubs, examples including Gunners.com, COYS.com, TheKop.com, UnitedReds.com and Celtic1967.com. MOS will use its recently launched Mobile Streams NFT creation platform to design, produce and create the stores to sell a variety of NFT content. Revenues will be generated via a revenue share from each NFT sold or traded, and royalties, which can be set into the NFT when it is created, will also be granted from NFTs traded in the secondary market.
The agreement was followed earlier this month by news of the signing of a five-year contract according to which MOS will be the exclusive global producer and provider of NFTs for Pumas football club, one of Mexico’s ‘big 4’, with extensive support across South American and the hispanic community in the US. The parties have agreed a target revenue figure over the five years of the contract of which MOS’s share is approximately $14.5m (not a forecast, but the estimated revenue MOS will receive after any revenue-share payments have been made). Revenue will come from both the sale price of the NFTs and a royalty generated from them each time they are traded in perpetuity, royalties being typically 5 to 10pc of the sale price. The company followed the contract by announcing a partnership with two agencies, PAS Kisisel Asistanlik Hizmetleri Ltd and Andrea Olmedo Lopez, contracted to help realise revenue opportunities from the Pumas transaction, and to progress ‘an additional 30 active deals in the MOS NFT licence pipeline to an advanced stage’.
The rise of esports
MOS is seeking to ride an esports wave that continues to gain momentum. As gaming culture becomes ever more established it no longer seems quite so odd to understand why crowds might gather to watch others play games. To those immersed in the culture, most of them avid players themselves, watching expert gamers is like any other spectator sport.
Indeed the demographics are moving in esports’ favour as the average age of a traditional sports fan continues to rise. One report found the that the average age of followers of the premier football and baseball leagues in the US has edged above 50: nearly 80pc of esports fans today are still under 35 years old, with many favouring video games over sports. Gaming culture is moving beyond the cliche of the isolated teenage boy in a basement, with girls organising Minecraft parties, young Syrians escaping their country’s social breakdown through games of FIFA, and older people joining in phone puzzles. Fortnite now has 350 million players, with Newzoo estimating there are now 2.5 billon gamers worldwide. It can now be an intensely social experience, with most games offering multi-player options. And video games are a great equaliser, with height, race, gender, religious beliefs and sexuality immaterial to performance.
The 2021 global esports market report published by industry analysts Newzoo forecasts that the global games live-streaming audience will reach 728.8 million in 2021, up 10pc from 2020, and that global esports revenues will grow to nearly $1.1bn in 2021, a year-on-year growth of 14.5pc, up from $947.1m in 2020, with more than three-quarters of that revenue coming from media rights and sponsorship. During the pandemic, esports, along with the wider gaming world continued to permeate mainstream culture. The virtual environments created by games developers offer vast spaces where huge audiences can gather to view art exhibitions, theatre and films. Rappers Travis Scott and Lil Nas X, for example, hosted concerts in the Fortnite and Roblox worlds, and Stormzy launched a new track in the Watch Dogs: Legion game. Gamers even staged their own Black Lives Matter protests in The Sims environment.
The future of NFTs
MOS is now positioning itself at the cutting edge of esports, seeking to take advantage of the cluster of new technologies – NFTs, the metaverse, blockchain, Web3 – currently energising the marketing world. It’s easy to get caught up in the excitement, but just how transformational will these innovations prove?
Some version of the ‘metaverse’, referred to by advocates as the successor platform to the mobile internet, does seem likely to evolve, though quite how extensive it will be is as yet unclear. The term originates in Snow Crash, a science fiction novel by Neal Stephenson, which describes a virtual world where human-controlled avatars interact on the ‘Broadway’, a 3D street. Tech commentator Matthew Ball describes it as a ‘massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications and payments.’ The platform’s development is being driven by Meta and Microsoft. Meta, which went so far as change its name from Facebook, acquired the pioneering VR company Oculus for $2.3bn in 2014, and is investing more than $10bn a year in the technology. Microsoft has made a big bet on its augmented reality HoloLens system.
It seems, then, that the metaverse will transform the esports world to some degree. But what about NFTs? It has often been said that the blockchain is a technology in search of a use. Thus far it has primarily been used to generate bitcoin and other cryptocurrencies. But blockchains can generate any kind of digital token that people might value. NFTs are an example, indicating, advocates claim, possibilities for a new generation of online services – often called Web3 – in which end users exchange with each other directly, without the mediation of corporations or governments.
The NFT concept made spectacular real world breakthroughs last year, embraced by celebrities and a host of corporations. Instagram now allows collectors to share NFTs on its platform, Spotify is allowing artists to trial promotion of their NFTs, and trading platform Robinhood plans to let users hold NFTs in a standalone wallet. The Miami start-up behind the Bored Ape Yacht Club, perhaps the most recognisable NFT collection, was valued at $4bn.
The future of the blockchain and NFTs is still open, but the basic idea of some kind of decentralised mode of exchange is compelling. The technology’s most fervent advocates speculate about its potential to revolutionise existing financial systems, but it doesn’t need to do so to nonetheless carve out a substantial user base. There is clearly demand for digital tokens such as NFTs, certainly sufficient to inspire continued development of the technology. And the metaverse seems a logical extension to today’s ubiquitous 2D digital networks. Not everyone will join in, but those who do will still constitute a mass market.
Under its relatively new leadership MOS has demonstrated a willingness to put itself in a position to benefit from one or more of these new trends. Most importantly, there seems a willingness to adapt: to see which way the wind might be blowing, and to act quickly to take advantage. Major sporting events like this year’s World Cup will be an important test case for the future of NFTs, and a signpost for other as yet unknown market trends. Right now, MOS’s share price is becalmed, hovering around the 0.25p mark. It was, however, riding at 0.65p just last autumn. If market momentum begins to swing back to tech MOS might be an interesting play: an ambitious company, debt free with climbing revenues, positioned to capitalise on cutting edge trends in the online gaming world.
Click here, and listen to this recent podcast with Sarah Lowther. Mark explains what Non Fungible Tokens are and how the business has evolved over two decades to become what it is today and the foundations it is laying for the future.