LOUD is an esports organization and media giant that, for the most part, is missing from the conversation when success in esports is discussed — at least in the west. This makes sense considering they’re all-in on Brazil and the many underground cultures in the nation, but considering it serves an emerging market, just how did it manage to rack up one billion views on YouTube before any other team (even FaZe Clan) having only launched in 2019?
In 2021, it’s fair to say that esports organizations stand for more than simply competing against one another. That’s not where the money is, and capital is what every company needs to stay afloat and thrive. Instead, there’s a reliance and emphasis on partnerships, content, and building infrastructure which helps keep competition feasible and companies bringing in much-needed funds.
FaZe Clan and 100 Thieves are two great examples of the esports-media hybrid that most esports organizations are moving towards, but there’s another organization that is seldom in that conversation despite perhaps being the definitive proof that this formula can work: LOUD.
Dexerto spoke with Matthew Ho, a co-founder of the popular Brazilian brand, to find out the story about LOUD’s inception, rapid ascension, and ambitious moves — including signing Olympic athletes and rap artists.
In Brazil, mobile battle royale game Free Fire is king. It’s becoming part of the culture there like some sports that have been around for decades, partly because of developers Garena’s ability to integrate stars from other industries, and partly because it’s free and a well-made entry in the recent explosion of the battle royale genre. LOUD saw this and positioned themselves firmly in the center of the game’s ecosystem, benefiting tremendously.
- Read More: What is Garena Free Fire?
The co-founders foresaw the opportunities that were presented by the game’s rise to popularity because they were already all-too-familiar with mobile esports and had worked closely with many of the industry’s biggest organizations at the time.
The origins of LOUD
“Two of our co-founders we were previously at Super Evil Megacorp working on Vainglory, building out the esports program and working with influencers, streamers on Twitch, and creators on YouTube,” Ho told Dexerto. “At the time I really saw the ability for creators and influencers to drive a lot of conversions around user acquisition and overall awareness.
“The reality was that every team functions differently and we really saw esports as a marketing tool. We wanted to figure out what the ultimate team would look like for us to bring in as a franchise for the league we were running. We saw huge opportunities in mobile gaming, but not necessarily in the west — they were in emerging markets where there’s a lack of esports infrastructure, server infrastructure, community programs, and whatnot.”
While profitability is a pipedream for many esports organizations, Ho and his colleagues identified some elements of what would become their competition when recruiting teams for Vainglory’s competitive scene.
“There were tonnes of success cases out there for us to look at and the big ones were definitely TSM at the time,” explained Ho. “They were, and are, huge in League of Legends and we saw that ‘zero to hero’ storyline.
“Then we saw the content creation and narratives coming out of FaZe Clan who were really getting the viewers to understand more about their creators, their personalities, and their brand. Merging those two together made us think about how to create a ‘zero to hero’ storyline through esports, making sure that we are telling a story and following through post-event, win or lose.”
As well as competing in two of Brazil’s biggest leagues in Free Fire and League of Legends, LOUD has signed a legion of content creators and influencers. It doesn’t stop there though. In 2021 they’ve expanded into music and sports, signing trap artist GUXTA in April 2021 and Olympic skateboarders Pedro Quintas and Luiz Francisco leading into this year’s games in Tokyo.
While initially, these signings may seem random, they’re strategically entering into other cultural cornerstones and integrating them into their activities in a way that seems natural. If they were to enter ballet or table tennis, for example, it would make much less sense than the aforementioned activities.
“In Brazil specifically there’s Free Fire, football, CS:GO, skateboarding, and trap music — these are all things that our audience really resonates with right now and they all make sense with our strategy of storytelling and creating narratives,” Ho explained. “Whether it be going into music or skateboarding, these are things we feel confident in bringing additional value to.
“We want to adapt the music towards what we’re doing at LOUD and create more cool experiences for our fans, while learning the ins and outs of music production, how fast we’re able to turn around music videos, and the financial and the monetization part of it as well. These are things that we’re still learning to date.”
The line between sports and esports has been blurring over the past few years, whether that’s through major sports ownership groups investing millions into the Overwatch League or promising athletes like Bronny James joining the collective of FaZe Clan. LOUD tapping into skateboarding makes a lot of sense within the context of Brazil, as both gaming and skating are ‘underground’ sports, fighting to be taken seriously in the wider sports arena.
“To be transparent, we signed them up for five years,” Ho said of Quintas and Francisco. “The big opportunity here is that you have skateboarding, which has been an underground sporting community or for the longest time, becoming an official sport now. Imagine if you were one of the main brands positioned in football, the NFL, or the NB. When we’re looking at the opportunity for skateboarding in Brazil, we’re foreseeing how big can it be in five years and what the opportunities there are — whether it be on a grassroots level or on a professional level. Things like building a bunch of skate parks across the country.
“We are gaming arenas inside malls. We think those are great places for us to really connect with the community and build experiences for them. What we see for skateboarding is very similar, we can build skate parks around Brazil. we can leverage the real estate within these skate parks for partners and sponsors, and then just work on making the most out of that traffic. We think that’s a win for us and advertising and partnerships will make it a sustainable route so that we’re not burning too much money.”
Esports is a business, after all
While competitive excellence and crafting a supportive community are vital components of esports, esports organizations are businesses at the end of the day. It’s hard to make money on fielding the best roster, flying them across the globe and only taking 10% of prize winnings. Orgs need to make money or they’ll simply cease to exist. Profitability is hard to come by for most, but not for LOUD.
“We were profitable since month one,” Ho told Dexerto. “We came into this with a bunch of partnerships already in hand, working with the likes of Discord from pretty much week one were blessings that we had early on. It helped us grow and sustain the business and extend it to what it is today.
“When you’re starting a team, the first thing that you do is build a community, whether you are winning championships or creating content people will gravitate to your team. The first opportunities that you see there is mostly advertising, working with sponsors and partners to leverage your power of distribution. Where we see it moving towards is commerce, I think that’s where the real opportunity really starts to come for a lot of organizations. It then comes down to how loyal and engaged fans are and what the potential commercial value is that they can gain from each user.”
While some entrepreneurs are banking on competing and content to make money, others are betting on operating on the peripheries of the industry by offering support and building infrastructure. There’s OpTic Gaming on one hand, and Vindex (who are investing $300M over five years to build gaming arenas across the United States) on the other. Purposefully operating in an emerging market with little infrastructure, LOUD want to be the best of both approaches and reap the rewards of such an effort.
“When you’re in the west, you are dealing with the big brands, the massive agencies, and companies like Vindex and PlayVS that are building up the infrastructure,” the LOUD co-founder said. “In emerging markets, there’s no infrastructure at all so there’s just so much more opportunity.
“We are essentially looking at different markets seeing opportunities to build from the ground up while knowing the issues and concerns of models that we see in the west. That’s essentially how we started out with our content strategy; we looked at what works, how we could adapt it based on our learnings from the publisher side and the content side. We’re doing the same thing across the board, approaching these things from scratch and applying our learnings.”
We asked Ho if he had any grand proclamations about where LOUD will be in the coming years — perhaps as big as the main sporting teams in the country? — but instead were met with a humble answer meshed with a forward-thinking but adaptive approach to an industry with very few ‘best practices.’
This may be one aspect of why LOUD has been so successful so early on: they know better than to try and foresee the status quo of an industry that’s prone to new titles emerging out of nowhere and existing esports dying a quick death. They want to remain nimble, on their toes, scoping out the next big opportunities before they’ve blossomed.