eSports brand raises funds to expedite foothold in the country
IT CAN be said that Hazman Hassan, 32, is living out most guys’ childhood dream. He makes a living off getting people together for video games.
It’s all about creating a space for people to connect, he says.
Hazman, co-founder and chief executive officer of eSports brand Kitamen Resources Sdn Bhd, notes that the video gaming landscape has changed tremendously from the day his seven-year-old self was introduced to the Sega Mega Drive 2. Games were simpler then, tournaments were non-existent here and get-togethers were mainly in cybercafes.
When he met his co-founder, Fahmi Fairuz, three years ago, the eSports market was already in full swing globally. In Malaysia, though, the duo saw a potential to develop eSports further.
At that time, tournaments in Malaysia were still few and far between. The Fifa games, for example, were held around five times a year. Now, you can see more than 10 tournaments every week, he says.
“When Kitamen started, eSports was being revived here. Ten years ago, eSports was kind of popular in Malaysia. However, back then, the infrastructure was not yet ready to deliver eSports. You need fast Internet, good machines, conducive venues and other things.
“So when we started, we thought eSports was a good avenue to promote the positivity of video gaming itself. Instead of just playing video games to waste your time, you can come here, create communities and compete in games. That’s a healthier and a more positive side of gaming,” he says.
Hazman and his partner opened up their first outlet – or a Dojo, as they like to call it – in mid-2015 to provide access for people to play computer games. A little like a cybercafé of their own, pretty much.
But Hazman, an architect by training, emphasises that it had to have a conducive environment to draw people in. They designed their gaming den as a comfortable space for players to come in and train and at the same time, create a community and bond with new friends.
As it picked up, people started approaching them with an interest to start their own Dojos.
This gave the duo another business opportunity.
“We started teaching others how to do it. It was better for us to sell our services as a consultant to move the brand forward together. We sold our first licence in early 2016. At that time, Kitamen was only a brand. So we incorporated Kitamen as a company in mid-2016 to grow this model,” he shares.
By the end of 2016, there were eight Kitamen outlets and as at end of last year, they had 15.
Currently, all its outlets are operated by licensees. This enables Hazman’s team to focus more on building the brand and on developing the market as a whole.
Over the last two years, Kitamen has been actively participating in and putting together eSports tournaments. Having more outlets alone will not cut it. It is all about events and positioning your presence in the scene itself to build a name for yourself, says Hazman.
Hazman likens eSports to any other sport such as football and basketball, which presents the company with a lot of opportunities.
Kitamen chief marketing officer Chua Ken Jin concurs, noting that eSports is a wider ecosystem beyond just a group of players.
“There are a lot of services that we can actually put into this industry. It’s a spectator industry. There’ll be brands who want to advertise, sponsors that you want to look for, teams that you want to consolidate with. There are a lot of opportunities here and Kitamen acts as a platform for brands to connect with the communities,” says Chua.
More importantly, the public’s perception of gaming has also changed in recent years. People are a lot more receptive of video games these days, allowing the industry to shed much of its bad rap. This has enabled more people to participate in the growth of the eSports industry.
With the industry growing, Hazman notes that there are a lot more job opportunities in the market like game developers, professional gamers, event organisers, coaches, even, or shoutcasters – much like commentators – once you’ve acquired the knowledge and experience in a game.
“There’s definitely a lot more things going on now. There are more online hubs. There are even journalists who are now dedicated to covering eSports.
“We had a recent competition in Subang and this bunch of kids were there playing Counter Strike. And their parents were there supporting them!” shares Chua.
Kitamen aims to open 30 Dojos by year’s end and hopes to get working on building its Epicentre in Kuala Lumpur soon. The Epicentre will have a stage with event hosting facilities, Dojo areas to train, VIP access, broadcasting rooms, a food and beverage area and co-working spaces.
The Epicentre is expected to contribute about 30% to Kitamen’s revenue moving forward. The other 70% will come from licensing, events, advertising and sponsorships.
In its first year of operations, Kitamen generated revenue of about RM500,000. It is projecting sales of more than RM6mil for 2018 and expects revenue to top RM19mil by 2022.
To fuel its expansion across the country, Kitamen is looking to raise RM500,000 to RM2mil in equity crowdfunding (ECF) campaign through ECF platform Ata Plus. The funds raised will be used to build spaces (40%), as well as for marketing (20%), operations (20%) and setting up an integrated database system.
According to the term sheet, Kitamen is offering up to 8.77% of the company or RM2mil in equity, which puts its total valuation at RM20.8mil. The 10,000 ordinary shares were offered at RM200 per share.
Hazman says the funds, on top of a Teraju grant it obtained last year, will help Kitamen maintain an edge in the industry.
“With the current infrastructure we have, with social media and the Internet of Things, everything moves a lot faster. Even eSports. So if you’re too late in this scene, you’ll be left behind, especially when the international players start coming to Malaysia. So we need to have a foothold here first,” he says.
If everything works out well for the company this year, Kitamen is planning to spread its wings to the region next year with Indonesia as its first port of call.
“We want to build our flagship Epicentre in other countries and start creating that ecosystem there. But we first need to go big in Malaysia. And then get it out there that we are bringing everything that we are operating in Malaysia to our neighbouring countries.
“We have scouted for spaces in other countries. Our first stop will be in Indonesia. We also have interest from Philippines and Bangkok,” Hazman adds.
One of its advantages in the local market, says Hazman, is its attachment with the Malaysia Digital Economy Corporation (MDEC). In March, Kitamen signed a Memorandum of understanding (MOU) with the agency to strengthen initiatives to develop the Malaysian eSports ecosystem with an emphasis on “healthy gaming”.
Additionally, the company is in the midst of revamping its digital leaderboard to rank gamers across the country. This also helps to create more buzz for eSports as players compete to outrank each other for bragging rights.
“As a brand, we don’t just want to create spaces but also the network to connect people, brands and the government. We want to be able to say that Malaysia is ready for eSports,” says Hazman.
The eSports frenzy