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    Why a prominent esports organization is starting its own record label

    On Nov. 9, the esports organization Fnatic announced the formation of its own record label, the aptly named Fnatic Music. The move reflects a growing convergence between the music and gaming industries — and shows why esports businesses are increasingly pursuing revenue streams that are lean and relatively low to the ground.

    The label’s first release is “Fnatic Island Vol. 1,” a 31-track album of instrumental lo-fi hip-hop music available since last week on platforms such as YouTube and Spotify. Fnatic recruited 31 leading online lo-fi artists to contribute songs to the album; many of the featured musicians were already esports fans. (Fnatic’s artist-favored 60-40 revenue share didn’t hurt, either.)

    “Pretty much all of my friends in this community, I would classify as gamers,” said Brandon “Enluv” Hartt, one of the musicians who contributed to the album, who declined to say how much revenue he has gained from the partnership thus far. “Lots of labels in the lo-fi sphere have a Discord community around them, and people will often get in chat rooms to play a game.”

    Fnatic hopes its record label will act as both a funnel to attract new Fnatic fans and a revenue stream with relatively low overhead costs. The total budget required for Fnatic to put together its first album was less than $2,000, according to Joshua Brill, Fnatic’s head of marketing, who masterminded the music release. Most of that money went into audio mastering and fees to produce an animated music video for the album.

    The potential streaming revenues for such lo-fi music, which is often played on repeat in shops and public areas, lies in the tens of thousands of dollars, according to Brill. In an esports landscape in which most organizations still heavily rely on brand partnerships to keep revenues flowing, a lo-fi music label represents an excitingly high-margin opportunity. 

    “There’s so many coffee shop playlists on Spotify, café playlists,” he said. “The actual genre itself allows 17-year-old producers to make $50,000 a month from one track.”

    The introduction of a music wing to Fnatic’s business also gives the company valuable new potential inventory for brand partnerships, although Brill said Fnatic intentionally avoided using its first album for this purpose. “We could have launched this as, like, a BMW Fnatic album if we wanted to,” he said.

    Fnatic is not the first esports organization to get into the music industry this year; G2 Esports, for example, released a metal song under its own label in January. But Fnatic’s label is a more fully realized wing of the business than G2’s music play, which was essentially a brand activation designed to promote the team’s new jersey design. The effort is headed up by Brill, a former music industry executive, and Fnatic has partnered with the music platform DashGo to serve as its distribution arm.

    As companies across the esports industry tighten their belts to prepare for the coming recession, low-cost revenue opportunities like Fnatic Music could be an attractive alternative method for esports organizations to grow their audiences without having to go too deep into the red. For this venture to succeed, it is key that the actual product — the music itself — remains genuinely compelling for both current and future Fnatic fans.

    “You have so many brands diving into it, and a lot of it is looking like a cash grab,” said Marvin Resende, a gaming and music partnerships expert and cultural brand partnerships lead at The Defiant Collective. “In my opinion, when it’s a cash grab, it doesn’t work — and there’s no real way to fabricate music that connects with people.”

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