- Ad holding company Project Worldwide acquired gaming specialty agency OS Studios.
- Project Worldwide wants to help big clients like Pepsi enter the fast-growing gaming business.
- Esports revenue is predicted to approach $2 billion by 2022, mostly through ads and sponsorships.
- See more stories on Insider’s business page.
Project Worldwide, a New York-based ad holding company, acquired gaming and esports-focused agency OS Studios as online gaming has accelerated in the pandemic.
New York-based OS Studios employs 14 people and produces virtual and in-person events and content for companies like Twitch, EA Sports, and AB InBev. Its competitors include events agency Esports Engine and recording studio NRG.
The move marks a shift for Project Worldwide as the pandemic takes a toll on its live events business and big brands scramble to enter the red-hot gaming world.
Project Worldwide was founded in 2010 and now owns 13 agencies including PR firm Praytell, digital agency Wondersauce, and ad firm Partners & Napier. Its largest property is events agency George P. Johnson, best known for organizing Salesforce’s massive annual Dreamforce event.
Chairman and CEO Robert G. Vallee Jr. said George P. Johnson had to cut staff in 2020 and shift its focus to virtual events, which further highlighted the need for Project to enter the gaming world to take on bigger rivals like ad giants Omnicom, which launched an esports consultancy in 2015; and Publicis, which just rolled out a gaming practice.
Insider Intelligence estimates that esports will reach nearly $2 billion in revenue by 2022, with 69% of it coming from sponsorships and advertising. But few agencies specialize in gaming.
“We have clients like Pepsi demanding, in a sense, that we get into this space and get their products integrated into the community,” Vallee Jr. said.
OS Studios’ CEO John Higgins said the agency is on track to double its revenue in 2021 and that the business was largely unaffected by the pandemic because most gamers and streamers prefer to work remotely.
Higgins said his agency needed to join a larger network to continue growing and that he’s been approached by several other holding companies about selling.
Despite the big hit to live gatherings, Vallee Jr. said Project generated $65 million in revenue from virtual events in 2020, with all its agencies turning a profit. The OS Studios deal is its first since 2018. Terms of the sale were not disclosed.