The last week has seen the biggest names in esports being swallowed up by larger companies. Last week, Major League Gaming, which is under the Activision-Blizzard banner, was caught up in the massive Microsoft acquisition. This week, two industry stalwarts in ESL and FACEIT have been bought by Savvy Gaming Group, a company created and funded by Saudi Arabia's Public Investment Fund.
The purchase of the two companies was reportedly around $1.5 Billion and combines the two companies into one entity under their new ownership. ESL is one of the oldest esports companies founded in Germany in 2000. The company produces some of the biggest esports events like IEM Katowice and DreamHack and is touted as the world's largest esports company. FACEIT, which sold for $500 Million, is a platform that hosts and administrates esports tournaments for Counter Strike: Global Offensive, League of Legends, DOTA 2, and other popular esports.
Under the Savvy Gaming Group, the two companies will merge under the new name ESL Faceit Group. The current CEOs of the two companies Craig Levine (ESL) and Niccolo Maisto (FACEIT) will adopt co-CEO roles once the purchase is set to complete in 2022. The two companies will still operate mostly as they do now but will synergize operations to help foster and potentially expand the esports scenes they run. The move to acquire these two esports entities by Savvy Gaming Group is seen as an effort for Saudi Arabia to further diversify the country's appeal in different markets and rely less on the country's oil exports as its sole economic driver.
Many are viewing the purchase as a controversial money move under the guise of "sportswashing," a practice of throwing large sums of money at sports ventures to divert attention from a country's human rights issues. The Savvy Gaming Group is a company under the Saudi Arabia Public Investment Fund and operates under the Saudi Government. Other purchases made by the Public Investment Fund include the purchase of English Premier League team Newcastle United in 2021.
Despite the slight downturn due to the pandemic and the lack of live events, esports is still an expanding form of entertainment and will still draw interest from outside entities looking to invest and make money on the scene. While it remains to be seen how exactly the newly-formed esports companies will operate, they suggest that structurally nothing will change, and they will focus on further building its professional and Path to Pro communities as the industry and the world recover.
Source: ESL FACEIT, IGN