Nearly two decades after its launch, the online chess platform Chess.com notched a major milestone in February, crossing 250 million registered users. Now, the freemium brand has set its sights on another goal: growing its direct advertising business.
Advertising currently makes up around 10% of Chess.com 's $150 million revenue, with around 88% coming from its business subscription business, according to cofounder and chief executive Danny Rensch. The company has been profitable since its inception.
Chess.com has nearly 2 million paying subscribers across its three tiers of paid plans. Subscriptions to the annual version of its most premium offering, the $119 Diamond tier, accounted for more than half of that base. Although the company has monetized its free users with advertising since 2011 the business has always been a secondary concern, according to Rensch.
“We would never do anything that disrupts the sanctity of the game experience," Rensch said. "That is a super important part of our ethos."
While the platform still plans to prioritize the user experience, its posture on advertising is evolving.
Beginning this year, Chess.com began an ambitious initiative to scale its direct ad sales business, build out its first-party data infrastructure, and introduce exclusive inventory and audience targeting for brands. As part of this reorientation, the 600-person company hopes to reduce its reliance on the open programmatic market citing a lack of quality control and a frustration with its volatility.
The mindset change crystallized late last year and became a board agenda item in the first quarter after private equity partner General Atlantic, which took a stake in the company at the end of 2021, pushed the company to think bigger, per Rensch.
The pitch to advertisers leans on cultural cachet of the game. Its legacy as one of the oldest board games in the world, along with its associations with cunning, strategy, and cerebral excellence, make it a natural fit for luxury advertisers, according to Rensch.
“We think of chess as one of the elegant, evergreen, brand-safe, and brand-elevating opportunities in the market,” Rensch said. “When you align yourself with chess, you say you are a strategic thinker.”
Events are another lever the company plans to pull.
Sponsorship currently accounts for around 2% of revenue, but Chess.com sees room to grow it considerably through coverage of marquee moments like the World Chess Championship and Speed Chess Championship, as well as deeper integrations across its content footprint on YouTube, Twitch, TikTok, and Instagram.
While the company declined to offer specific financial projections, the business could add “a small eight figures or more” to the top line by the end of the year, Rensch added.
On paper, the user base is attractive. In February, the site reached an all-time peak of 25 million human-versus-human games in a single day. Around 38 million people play each month. Daily active users hovering near 10 million. Its users are highly engaged, largely logged-in (around 70%), and average 17 sessions a month at roughly 15 minutes per session. The platform relies on hashed emails and identity partners to support privacy-safe targeting. Its core ad formats remain mobile video interstitials and standard display.
As part of its push to engage its users more deeply, the platform has also employs a slew of features designed to encourage repeat visits, such as streaks, a mobile widget, and push notifications.
The challenge, according to former Rolling Stone CEO and noted chess enthusiast Gus Wenner, is execution.
The company has built a product that generates around $130 million in subscription revenue and enjoys a loyal following across the globe. In introducing more advertising to the equation, it will need to exhibit restraint to ensure the gameplay and user experience remain undiminished.
“It’s a double-edged sword," Wenner said. "The opportunity to grow their ad business is probably big on a number of levels, but their most compelling element is their user experience, so they have to bring in advertising in a smart way so as to not compromise that."
Its focus on growing events is a smart strategy, according to Wenner. Advertisers have embraced experiential as a way to cut through the digital noise, and Chess.com 's authority in the space gives its convening power an added layer of authority.
Wenner pointed to The New York Times as a useful comparison, in that the company built a great product, layered subscriptions on top, and can now treat advertising as a complement.
Of course, Chess.com also hopes to benefit from a broader cultural moment. The game stormed into the national zeitgeist during the pandemic, when lockdowns encouraged gameplay and the Netflix series The Queen's Gambit added a dose of sex appeal. Since then, a string of high-profile cheating controversies, a Netflix documentary, and a forthcoming film with Boardwalk Hollywood Pictures have kept the game in the cultural conversation.
For Chess.com, the bet is that the same deliberateness that defined its product approach for nearly two decades can carry over to its ad business, that it can court Louis Vuitton without becoming a billboard. Whether that discipline holds as the revenue stakes rise is the open game.
