With the recent popularity of the Metaverse – the internet is turning into a 3D reality, making all other forms of the internet on the path to being obsolete. Game developers have been competing to be at the forefront of design and development to create products that fit into this new world. 

Emerge Gaming (ASX: EM1) is aiming to capitalise on this opportunity, betting on the gaming market to be worth US$200 billion by 2023. Incorporated in 2016 and based in Cape Town, South Africa, Emerge’s principal objective has been acquiring a number of assets that provide an online gaming portal that allows users to engage in skill-based competitive gaming competitions in eSports through peer-to-peer matches and tournaments. 

One of their most recent assets has been MTN Arena, which was created by Emerge in July 2021. MTN is a South African telecommunications company contracted by Emerge to build a platform that facilitates mobile gaming competitions and tournaments in South Africa. The platform was designed to target casual mobile gamers and allow them to win real prizes in contests. For around 3 rand (A$0.28) per day to subscribe and compete, users can enter tournaments and win up to 100,000 rand (A$9,167) worth of prizes. 

Emerge has stated that 1 million new subscribers have now been added to the MTN arena platform. This has equated to an average of 96,000 additional subscribers per month over the last 3 months, representing their accelerated growth. However, only 360,000 users are active and billable. The new users are a result of tough, targeted marketing through SMS blasts, social marketing campaigns and sponsored prize pools, including many other methods. 

“The achievement of 1 million new subscribers on MTN Arena is a great milestone. We are in the process of developing an exciting new iteration of our competitive social gaming platform with enhanced engagement, social, rewards and tournament functions,” said Gregory Stevens, CEO of Emerge Gaming. 

It has not been smooth sailing for Emerge. Following more than 3 months of suspension on the ASX, there has been significant speculation on the dealings with their recently divested platform Miggster and its affiliates. 

Miggster is based on Emerge’s eSports tournament platform technology and was delivered under an agreement with Crowd1. In a very similar structure to the MTN arena platform, a user can subscribe for a fee (US$8.50 per month) and can earn cash prizes through competitions on the platform with prize pools worth US$500,000. Users would be enticed to recommend friends and other users to join the platform and would be rewarded for doing so – this would continue for each new user that subscribed.

“Pre-registration will be offered to the public from 15 October 2020 with the network member affiliates being incentivised and rewarded for attracting platform subscribers by promoting MIGGSTER Mobile through their own social networks using social media platforms such as Facebook, Instagram, YouTube, twitter and WhatsApp, creating substantial reach and awareness,” Emerge Gaming stated in their ASX announcement released on 13 October 2020. 

While Australian regulators haven’t taken any direct action against Crowd1 or Emerge, authorities and regulators worldwide recognised that Crowd1’s operations may be harmful, indicating it may be a scam. Warnings and restrictions have been issued against the Company in countries including New Zealand, the Philippines, South Africa and Mauritius.

After a lengthy suspension from trading and a series of queries from the ASX questioning the sources of revenue and pressure from regulators, Emerge has since divested from the gaming platform and cut ties with Crowd1. The sale of Miggster was completed on 9 March 2022 to Nibiru e-gaming AB company for $5 million, which is payable over 12 months. Nibiru, a Sweden based company, acquired all employees for the operations of the platform and all other intellectual property.

EM1 stated it still had enough money in the bank to continue growth and ongoing operations to justify the sale – namely, via MTN Arena. 

“With A$16.6m in the bank, prior to the receipt of the A$5,000,000 from the Miggster divestment over the next 12 months, Emerge is well capitalised and primed to accelerate the growth of its user community, leveraging developed and proven business models to expand internationally,” Emerge Gaming stated in their ASX announcement released on 9 March 2022.