A Big Week for Esports World Cup Deals
Also, NRG Esports enters the world of competitive mobile gaming with the help of Samsung Galaxy.
Our 14 Questions edition of our newsletter that went out on Jan. 2, reads like I secretly tapped the phones and computer systems of every esports and gaming company in the world. I’m not smart enough to do something like that, for the record, but I never ask questions I don’t have the answers to already, so maybe these should have been called “predictions” instead of “questions.”
The sheer number of layoffs in 2024 already should have you paying very close attention to the role that AI is playing right now when it comes to layoffs and hiring (and not just in gaming, but also in other creative mediums). Publishers who claim the cost of programming and creating art assets for games are just too high (while also reporting record profits) are going to lean heavily into AI-generated work that will in turn see less humans have actual jobs in two to three years. T-1000 isn’t coming to kill Sarah Connor—he’s coming to take her job.
On a totally unrelated note, thank you to Marcus Howard and Richard Lewis for all the kind and inspiring words in a recent episode of Inconvenient Truths. This means a lot to me and I have a lot of respect for both of them, who work very hard at what they do every day. Keep grinding, boys!
On to the news! - James.
EFG’s Town Hall Meeting Post-Layoffs
Following the announcement that it would be cutting 15% of its global workforce, ESL FACEIT Group (EFG) Co-CEOs Craig Levine and Niccolo Maisto laid out what the future would look like at a recent town hall meeting. The meeting for staff that had survived those layoffs had some fairly interesting news for people not inside the EFG ecosystem:
Vindex has been sunsetted and Esports Engine has been fully integrated into the EFG ecosystem.
DreamHack Sports Games - a division dedicated to bringing sports-focused video games and sports organizations into the competitive scene—has also been sunsetted.
EFG is not profitable, but with these cuts, a restructure, and its plans to generate revenue in 2024, the company hopes to be at the beginning of 2025.
The layoffs may have been more than 15% of its global workforce. Maisto acknowledges this as part of an answer to a question on why the company settled on that number when it formulated its staff reduction plan—he also noted during the meeting that around 1,200 employees remain. Doing some back-of-the-envelope math (going by what sources tell The Esports Advocate), if affected employees are somewhere between 250 - 300, that would have put the headcount at around 1,500 pre-layoff. If we go with the top number: 300 employees from 1,500 would be more like 20% of its global workforce…
Check out TEA’s article for details.
NRG X Samsung Galaxy
This week NRG Esports announced that it plans to operate a PUBG Mobile team with the support of Samsung Galaxy, who will serve as the naming rights partner in the deal. The tentative plan is to operate the roster under the name “NRG Galaxy,” and be ready to compete in the PUBG Mobile Super League – Americas for Spring 2024.
This deal with Samsung Galaxy marks NRG’s first foray into competitive mobile gaming, and makes the company one of only a handful of organizations in North America to compete in the mobile gaming space (we acknowledge you, TRIBE Gaming!).
While organizations suddenly launching rosters in new games has been a tell that they have probably done so to get money from the Esports World Cup Program, it does not appear this is the case with NRG because it is getting the financial support it needs from Samsung Galaxy. We have asked for an official response on that, for the record.
You can learn more about the Esports World Cup Program here, but the gist of it is the Saudi-backed government program pays a stipend to partnered organizations for fielding new rosters for games that are part of the Esports World Cup this summer in Riyadh, Saudi Arabia.
While NRG may not be part of the Esports World Cup Program or a partnered team this season within PUBG Esports for 2024 (at least as of this writing), if it performs well enough this new squad will likely be competing at the PUBG Mobile Esports Cup this summer, which has a total prize pool of $3M USD.
An a related note, Full Squad Gaming (part of the same group that owns NRG) has also worked out a new deal with Samsung Galaxy to promote its products through a series or marketing campaigns, promotion on social media and streaming platforms, and multiple events this year including the “Samsung X FSG Super Spring Break,” promotion during its “Full Squad College Gaming Tour,” and at the mobile gaming development competition “Samsung Game Jam” later this year.
Big Week for Esports World Cup Foundation, Saudi Government
It was a big week for the Saudi Arabian government-backed Esports World Cup this week, and as the months go on in 2024, a trend I predicted in a previous newsletter is starting to come true: as more international competitions funnel into the event with major prize pools, organizations are simply going to show up and compete. And why wouldn’t they? Does the noise about human rights, gay and transgender rights, and conflicts in the region involving Saudi Arabia (and backed by military equipment sold to the country by the United States government) matter to rank-and-file fans that watch esports? The Saudis are putting this to the test. This is not 2020, where an online protest is going to derail a big deal like NEOM for BLAST and Riot.
The highlight reel—as covered by The Esports Advocate this week—includes the following major headlines:
PUBG Mobile Esports officially announced the PUBG Mobile Esports World Cup, which will be a multi-week competition taking place at the Esports World Cup in Riyadh, Saudi Arabia, in July. The event will feature invited teams, as well as a few that qualified through other major PUBG Mobile esports events earlier in the year.
***
Speaking of PUBG Mobile, Chinese conglomerate Level Infinite (Tencent Holding’s gaming and esports brand) announced Thursday that it has inked a three-year partnership with the Esports World Cup Foundation for Honor of Kings and PUBG Mobile competitive gaming in the region. Under the terms of the deal, 1,000 esports events will be hosted globally for PUBG Mobile and Honor of Kings—though specifics on those events were not disclosed.
***
Rainbow Six Siege will be a key title in the 2024 Esports World Cup. The announcement was made via social media, but details on format for the competition and how teams might qualify to take part in it will be released at a later date. Some teams that ranked in the top five at the recent Six Invitational in Brazil (winners wm7 Esports, and runners-up FaZe Clan, G2 Esports, Soniqs, and KAWASAKI SCARZ) could receive an invite based on their performance, though specifics details on plans related to that were not released either. Expect a massive prize pool for this one. Ubisoft working with the Saudi government is non-shocker, as a competition for Rainbow Six Siege happened last year at Gamers8…
***
Chinese esports tournament operator VSPO announced that Saudi Esports Federation Chairman and Savvy Games Group Vice Chairman HRH Prince Faisal bin Bandar bin Sultan Al Saud and Savvy Games Group CEO Brian Ward recently led a senior business delegation to China, accompanied by leaders from VSPO including Co-Founder and CEO Dino Ying and Co-Founder and CFO Danny Tang. The goal of the visit was to work out details related to the upcoming Esports World Cup event in July, and to further strengthen commercial partnerships with Chinese businesses in the esports and gaming sectors. VSPO has a major investment from Savvy Games Group, and the firstfruits of that investment are going to be the company’s connections that are a direct pipeline to some of the biggest players in the region as well as access to regional government officials.
***
The Saudi Arabian government’s National Development Fund (NDF) and the Social Development Bank (SDB) revealed plans to launch two venture capital funds to promote “gaming and esports sectors” in Saudi Arabia. The funds will have a total combined value of $120M USD. The announcement was made during the LEAP 2024 technology conference in Riyadh this week, and is part of the government’s “Gaming and Esports Financing Programme,” in cooperation with the Saudi Esports Federation.
***
The Esports World Foundation announced via social media that it has partnered with another Saudi Arabian government-funded project, Qiddiya City. The city-based project will serve as the presenting and nexus partner under a new three-year deal. As the Saudi government funds both projects through its sovereign wealth fund—the Public Investment Fund—it is not known if any money will actually change hands under this new deal.
In Other News
🎲A new filing dated March 1 in the lawsuit against Activision Blizzard related to Call of Duty League filed by retired Call of Duty professional player Seth “Scump” Abner and OpTic Gaming founder Hector “H3CZ” Rodriguez in February notes all parties are headed to arbitration to see if the Arbitration Tribunals have jurisdiction over the case. Chances are all of the contracts related to this case have arbitration clauses in them so this is likely the most non-shocking development in a court case in 2024.
💰We continue to follow the story of Dubai-based Galaxy Racer and the prize payments it owes women in North America who competed in the $100K Her Galaxy Apex Legends Open at the end of June 2023. The company said that it hoped to have the matter settled and payments disbursed by the end of February. But as February came and went and a new month began, players still haven’t been paid what they are owed.
✅ GameSquare completes its merger of FaZe Clan this week, with FaZe Clan no longer listed as a publicly traded company on the NASDAQ.
☑ With the completion of that merger, GameSquare also announced that Complexity Gaming Founder and original owner Jason Lake (who was serving as CEO under the Gamesquare banner) has raised $10M+ to buy back the company. The divestment to Lake removes concerns about competitive conflicts of interests between Complexity and FaZe.
👊 The International (the biggest Dota 2 competition on the calendar) will take place in Copenhagen. Expect more details to roll out from Valve and tournament organizer PGL soon.
💪🏿 Speaking of PGL, it said this week it will run at least eight major Dota 2 events with $1M (each) prize pools. The TO also laid out its roadmap for 2025 and 2026.