25 October 2020
Modern Times Group (MTG) owned tournament organizers DreamHack and ESL announced their merger into ESL Gaming at the end of September. Although both groups will exist under one corporation now, they will still operate as two separate brands, opting instead to restructure their leader and partnership models.
Both DreamHack and ESL were acquired by MTG in 2015 in unrelated transactions, giving the Swedish-owned digital entertainment company a foothold in the eSports industry. Now, they are once again looking to expand their reach with the merger of the pair, looking to offer “one of the most expansive esports and gaming lifestyle portfolios available.” ESL co-CEO Craig Levine said in a news release, “For our partners, there will be more opportunities to engage with us through a wider range of activations across all levels of esports, and all aspects of gaming.”
A Practical Marriage
In 2015, MTG purchased the majority stake of ESL and ownership of DreamHack, but the two organizations operated distinct from one another. DreamHack hosts digital festivals and events, ESL centers pro leagues, ESL One, and the Intel Extreme Masters tournament series. In the last couple of years, both companies have slowly started to move towards merging, sharing organizational resources, and relying more on one another to expand.
Where the Two Meet
The prolific gaming festivals will continue to run under the name DreamHack and ESL will continue to run as an esports organization, but both companies will broaden a recently signed partnership with Twitch and form a joint leadership group.
Headed by Craig Levine and counterpart ESL co-CEO Ralf Reichert, the joint leadership group will also keep on DreamHack CEO & President Marcus Lindmark, having him officially join the ESL executive team. Craig Levine commented in the same news release, “Through maximum cooperation and collaboration, and the melding of some of the best creative and visionary gaming minds in the industry, we will, together, continue to advance the innovation that drives this space via the most exceptional products and events.”
In the Industry
In the esports industry DreamHack and ESL stand out as the largest tournament organizers that aren’t either game developers or an esports team. It is a unique and coveted position to be in where some of the major concerns going forward in the booming and mostly unregulated esports market are how to deal with bias and possible match-fixing.
The groups have hosted events for biggest titles and most major competitive games, like Counter-Strike: Global Offensive, StarCraft II, Hearthstone, League of Legends, Super Smash Bros., Dota 2, Street Fighter, and Rainbow Six: Siege.
The Good and The Bad
The future of ESL Gaming may look bright with esports on the rise and the merging of ESL and DreamHack putting the company in the seemingly perfect position within the industry, but in the wake of the current situation, MTG is still facing some hard decisions.
Esports rapidly overtook the entertainment scene in 2020, and along with slot machines, casino, and sports betting experienced some revenue loss in the beginning of the year, but later caught up and started breaking records. However, layoffs are still imminent according to a representative of ESL Gaming who said that these changes are not related to the merger and are a result of organizational restructuring due to improvements in operating mode. However, these changes are not taken lightly, but are necessary, spokesperson added.