One week ago, competing tournament organisers ESL and FACEIT unified in a $1.5bn merger and acquisition deal that shocked the industry. It was by far the biggest acquisition in esports since… well, the week before, when Microsoft bought Activision Blizzard for $68.7bn (~£50.5bn).
Savvy Gaming Group, an investment group launched by the Saudi Arabian government’s Public Investment Fund, paid $1.05bn (~£780m) for ESL Gaming and is reported to have paid $500m (~£370m) for FACEIT. The two entities then merged to form the ESL FACEIT Group. The acquisition has faced criticism by many over Saudi Arabia’s human rights record.
To better understand the deal and its implications, Esports Insider asked ESL FACEIT Group co-CEO’s Craig Levine and Niccolo Maisto to tell their side of what is inarguably one of the biggest stories in esports history.
Editor’s note: This interview has been edited for clarity and brevity.
Esports Insider: What does the merger mean for the operations of ESL and FACEIT, previously two of each others’ largest competitors? Will they operate independently and compete?
Niccolo Maisto: For the last 10 years we have been working in the same space, and the nature and skillset of our respective businesses created a natural synergy across multiple avenues from content and events through to our goals. This complimentary direction heightened over the last 3-4 years and the merger will help to define our services in a better way. Our overall objective is to develop and support sustainable ecosystems across multiple games, and the merger will allow us to define our offering more clearly.
We will create joint initiatives that reflect who we are as the ESL FACEIT Group, some of which you can already read about, but each team and product will have the chance to focus on their own strengths and be empowered by the internal synergies that this merger will bring.
ESI: Do you know why Savvy Gaming Group has bought ESL & FACEIT, and what its intentions are with the new company?
Craig Levine: [Savvy Gaming Group] believes in the future of competitive gaming and our role in it. They believe in our organisation, our products, and our people to deliver on that ambition. As such, our organisational governance setup is the same as before; our vision and leadership remain the same. With that said, our new backing will allow us to realise a lot of the improvements and ideas we have talked about for years. We’re supercharging our growth plans, and all parts of the company will be along for the ride.
ESI: There has been some criticism regarding the fact that the group was purchased by a Saudi Arabian government-owned entity, considering the country’s human rights record. How would you comment in response to this?
Maisto: We understand the concerns but our values towards inclusivity for our employees, talent, partners and fans have not changed and they will never be changed. We base our operations on the same set of values which puts inclusivity at the centre of what we do.
Levine: We believe in the gaming community as a force for good, and this new investment will only accelerate our work in this area… This new merger and investment is crucial to us achieving this dream. As such, we continue to operate as an independent company owned by SGG who, in turn, is an apolitical, fully commercial entity independent of the government, with its own leadership team led by Brian Ward, former head of worldwide studios at Activision Blizzard.
ESI: What are the immediate plans for the ESL FACEIT Group for 2022 – are there any major new projects being developed for this year?
Levine: We will continue to operate as individual companies until the deal closes in Q2. In the meantime, over the coming months, our teams will work together to define the combined company’s product roadmap going forward. We will be working towards greatly improving our existing experiences, both in live esports experiences and in our competitive gaming platform offering. We already have product integrations planned, which have been presented in a public blog post, and look forward to sharing more.
Maisto: Our plans centre around three areas: creating more consistent opportunities for local ecosystems to develop for the scene, investing in North American teams and operations to create more stability in the region, which is particularly important for onboarding more partners and brands, and finally keep developing technology and tools for the community in particular for tournament organisers of any size.
We will be investing significant resources into anti-cheat solutions. This will remain a top priority as we believe it’s important to keep the ecosystem safe from cheaters. This technology will be available for free to everyone, from smaller tournament organisers to major esports events.
ESI: Are there possibilities for a joint ESL / FACEIT tournament series?
Maisto: It’s still very early days but in general we want each product and team to focus on their strengths in order to provide fans and players a better experience. So at this stage we would not see too much value in creating an ESL/FACEIT branded tournament series, for example.
Levine: We see the ESL & FACEIT offering as complementary. This, in combination with DreamHack’s gaming lifestyle festivals, gives us the perfect opportunity to provide a consistent journey that could take gamers all over the world from casual competitions to arena events on one platform. Exactly what this could look like is something that will be discussed over the coming months.
ESI: How do you see this move affecting the esports ecosystem?
Levine: Esports has been growing quickly, in parts fragmenting vital journeys for partners and players. It is our belief that, by combining and taking a more robust & sustainable long-term approach to the continued development of the industry, we can actually grow the cake for all parties, rather than focusing on maximising our slice of it.
ESI: Do you think this move reflects how the esports sector has developed over the last few years?
Levine: This surely is a testament to the great work that we at ESL and FACEIT have done over the years but also to the overall development of the esports industry. The valuation of the company reflects the success and potential of the industry and will bring even more attention to esports and help accelerate its growth even further.
Maisto: Outside of the valuation, I think it also shows how much focus is being put on the grassroots scene. ESL, FACEIT and so many others have helped to lay those foundations but that was just the start of what’s needed. The industry is maturing and this merger and investment from SGG shows the importance being placed on creating more holistic solutions to keep our industry growing and not just one-off, dip your toes in the water partnerships.
ESI: The announcement emphasised more involvement with grassroots esports and regional leagues — how does that fit into the existing efforts FACEIT is making, notably through the partnership with Gucci?
Maisto: The Gucci partnership has many parts to the initiative which are going to be plugged into one of our core areas, which is providing a clear and accessible path to pro to develop talent everywhere, for every game. We believe that developing zero to hero human stories is fundamental to make every sport, not just esports, attractive to more and more fans and that more content like this can help to turn more players into heroes.
ESI: Lastly, what does the merger mean for the Louvre agreement & ESL Pro League, the IEM series, and ESL’s upcoming women’s league?
Levine: The merger has no impact on the Louvre Agreement or the ESL Pro League, which will continue to develop in partnership with the Louvre team in a process led by the ESL Pro League Commissioner’s Office.
Intel Extreme Masters remains one of our biggest and most impactful products in the portfolio and will continue to feature competitions throughout the world. We are already committed to again bringing this elite competition to more cities as soon as it can be done in a safe way with everybody’s health in mind.
We have [also] already announced that the CS:GO Women’s League now is set to expand to South America and we aim to develop the program and its many different components even further. Our commitment to making esports the most inclusive and accessible form of interactive entertainment remains a core part of who we are.