Mega deal: Saudis buy ESL Gaming for one billion euros

The gaming industry has a mega deal to report. Investors from Saudi Arabia have taken over the German world market leader in eSports events – ESL Gaming from Cologne. The Saudis have priced the takeover at a billion dollars. The sum is a testament to the rise and value of eSports.

The rise of ESL Gaming

ESL has been around for 20 years now. The company recognized the potential of eSports events early on. ESL Gaming once started with the organization of LAN parties. Today, ESL Gaming is behind several top events in the scene, for example the most famous event – the Intel Extreme Masters in Katowice, Poland.

ESL Gaming was previously led by founder and CEO Ralf Reichert. He and some of his managers most recently still held an eight percent stake in the company. The main owner of ESL Gaming was the Modern Times Group.

Savvy Gaming Group has taken over all shares of MTG and of Ralf Reichert. At the same time, the 47-year-old will withdraw from the operational business and take over control and consulting activities as Executive Chairman. Savvy Gaming Group currently employs approximately 600 people. SGG is owned by the Public Investment Fund (PIF), a sovereign wealth fund from Saudi Arabia.

British competitor will also be taken over

The Saudis will not only invest in Germany, however, but will also take over ESL competitor Faceit from the UK at the same time. While ESL Gaming specializes in hosting professional competitions, Faceit is the best-known organizer of events for recreational gamers. The deal will cost SGG another $500 million.

eSports increasingly interesting for sponsors

eSports boomed once again during the Corona crisis. But it would be too simplistic to pin the industry’s success purely on the pandemic. Even before Covid-19, viewer numbers were rising steadily both online and offline. If you look at the prize money, the number of active players and the users of streaming services like Twitch, there’s a clear ranking in the popularity of eSports disciplines.

  • Counter-Strike: Global Offensive (CS:GO)
  • Fortnite
  • Dota 2
  • League of Legends

 

LOL World Championship at the end of 2021, a total of 180 million fans watched live in front of the screens.

These are exactly the numbers that make eSports interesting for sponsors. Companies like Intel, DHL, BWM and Mercedes have long since discovered the potential for themselves. Several German DAX corporations favor advertising via eSports channels. Potential customers are addressed directly. A typical eSports fan is male, between 26 and 40 years old, with above-average education and income. Per day, an eSports enthusiast spends three hours in front of the screen.

Brian Ward becomes new head of SGG

The head of Savvy Gaming Group is Brian Ward. The Saudis have engaged a very well connected manager of the scene. Ward previously worked for Electronic Arts, Microsoft and Activision. SGG’s goal, the executive said, is to create a world-class eSports ecosystem. “SGG has stepped up to invest heavily in gaming and e-sports and to strengthen the global gaming[1] community,” Brian Ward said.

Masters already in February with over 10,000 fans

If Ralf Reichert has his way, the fans will soon return to the halls. At the Masters in Katowice in February, 10,000 fans are expected to be there – per day.