Los Angeles Business Journal

Xfire Launches Video Game Tournament Platform

By Natalie Jarvey Tuesday, March 5, 2013

Video game tournaments have become so popular among hard core gamers that a giant such as Activision has begun hosting “Call of Duty” tournaments where contestants can win cash and prizes.

Now Santa Monica game communication company, Xfire, is getting in on the tournament action. Xfire, which has technology that allows gamers to chat with friends and send pictures while playing PC games, announced Tuesday the launch of its video game tournament platform, Battleground.

Battleground allows PC gamers to compete against other players in instant action competitions, one-on-one battles and tournament style battles.

Players in the instant action competitions, which allow a person to come and go from the play as they please, will earn tokens that they can later redeem to enter into the one-on-one or tournament battles. Those tournament battles will earn players in-game currency called an X-Coin, which can be redeemed for prizes.

Xfire Chief Executive Paul Kim said Battleground is a nice compliment to its messaging technology, which has amassed more than 22 million users.

“Historically Xfire has provided tools that are relevant to game play,” he said. “We’re able to score games on the fly in real time and provide our community tools for communication. All of these features are perfect for competitive gaming.”

Xfire was founded in the early 2000s as a download to PC desktops that allows gamers to message each other as they play. Viacom acquired the company in 2006 for $102 million and sold it to Santa Monica’s Titan Gaming in 2010.

Titan, which changed its name to Xfire after the acquisition, was a small startup at the time looking to stage online tournaments for PC and online games. While Xfire’s communication tools are still running, Titan appears to have focused on turning the Xfire brand into a game tournament platform.

Kim, who joined the 24-person company last year, said Viacom invested too much into its Xfire acquisition and was not making enough money through the site’s advertising sales.

The tournament platform opens up new revenue streams for the company. Now the company will make money from tournament sponsorships, paid memberships and the purchase of its X Coin currency, which is worth about 10 cents.

“We’ve been running on our advertising business model,” Kim said. “But gamers are just less interested in the advertising mode. They rarely click through the ads. We’ve seen tournaments grow year after year.”