The parent company that owns DreamHack and ESL, Swedish tech company MTG, saw their shares drop nearly 20% in value after a joint venture with Chinese live-streaming platform Huya fell through.
The move had been in the works since September 2019 when it was agreed in principle that Huya would buy a $30 million stake in Turtle Entertainment (ESL), a move that saw them gain share value in anticipation of access to the Chinese market.
Huya received $461.6 million from Chinese mega-corporation Tencent, with the deal also agreeing that Tencent could purchase additional shares to reach 50.1% voting power at a later date.
MTG claim that this plummet in their stock’s value will not have any operational impact on ESL, including the upcoming Pro League.
In a statement released on the MTG website they described the deal’s collapse as being down to “differing views between the two parties on allocation of contractual risk and other key commercial terms.”
The CEO and President of MTG, Jørgen Madsen Lindemann, added: “We still believe in the logic of this transaction and its potential for both MTG, HUYA, and for the esport industry globally. However, both parties see a mutual termination of the negotiations as the only way forward for now given the status of the negotiations at this stage.”
“With that said, expansion into the important Chinese esport market continues to be a priority for MTG and we are looking forward to seize opportunities in the near future.”
Huya’s high-potential partnership with MTG failed to live up to lofty expectations.
The press release also stated that the development would have no operational impact on ESL in 2020. The development comes at a time when there has been much debate about the new look ESL Pro League for Counter-Strike and the commitments required from prospective partners in that league.
A meeting is due to take place between teams and ESL between the 22nd-24th January in order to finalize some of the details of the agreement between all parties.
A trend that’s emerged over the past couple of years in esports is organizations rebranding, but why do they deem it necessary to change a visual identity they’ve had in place for years? It’s considered counter-intuitive to some, but there are some merits to a brand refresh.
When it comes to selling your company and its services or products, branding is a crucial decision. It communicates your company and its offering to the audience you’re looking to tap into, hopefully providing a connection point and keeping it top of mind when prospective consumers are scouring the market.
In an industry that’s predicated on competition, there’s additional nuance. There’s a need in esports and sports alike to create an identity that fans can root for; a brand that’s relatable or aspirational that helps to foster long-term supporters.
In 2020 alone, over a dozen prominent entities in the esports industry opted to ditch their logo (and in some cases, their company’s entire identity) in place of something fresh. There are plenty of reasons these decisions were made.
Why do esports organizations keep rebranding?
If any organization knows what it’s like to upset a diehard fan base due to a rebrand, it’s Evil Geniuses.
The conception of esports happened at different times, depending on who you ask, but it’s very clear that entities housing competitive players really started to emerge in the early 2000s. At this time, though, these teams were made up of friends who enjoyed playing alongside each other — it was remarkably rare for a tournament to have the life-changing financial incentives that are commonplace today.
These teams weren’t established as multi-million dollar companies or media giants, and thus time and resources weren’t funneled into branding. These organizations, which were actually just gaming clans, were simply a product of the times. As the industry has professionalized and become more economically lucrative, the functions and demands of such brands have changed.
The likes of Evil Geniuses, Fnatic, and Ninjas in Pyjamas have been around for years and, as such, they’ve had to develop in every area as the industry too developed. No wonder companies that were once present-minded inventions have had to change their branding, they needed to adapt to the new environment surrounding them as they blossomed into professional operations.
“With the esports scene moving at lightning pace, it’s not uncommon for brands to rapidly outgrow their original branding,” designer Owen M. Roe told Dexerto. “If you’re founding a team with limited resources at your disposal, you’re not going to be able to afford world-class designers.
“Eventually, there will come a point where a bad logo will begin to hurt your bottom line, whether it’s with brand recognition, merchandising, or because it just plain old looks dated. Fans strongly identify with logos, so it’s important to give them something to be proud of — but that’s also what makes esports rebrands so hit or miss.”
Even DAMWON Gaming changed their name and logo just months after establishing themselves as the current League of Legends world champions.
“Tenets of great design are timeless, but the market is so dynamic that sometimes rebrands are necessary — for example, if an organization switched regions and the old branding no longer effectively represents them,” Theorycraft founder and creative strategist Lauren Gaba Flanagan told Dexerto. “Also, if brand architecture wasn’t built correctly at launch, a rebrand is a good opportunity to correct and refresh that.
That said, observing shifts in design trends is the wrong reason to rebrand.
Organizations have to consider what their brand communicates to consumers, and also how well it serves its purpose across the board. These days, branding has to be well-suited to digital channels, on merchandise and branded accessories, in broadcast graphics, and supporting assets across their entire operation.
Creating a timeless brand
Esports is a digital-first industry that’s evolving at a rapid pace, so it’s impossible to ensure that a brand is able to stand the test of time in every application. It’s more sensible to try and represent what your company is right now and where you envisage it being in the short-to-medium-term.
Should we, as an industry, simply expect constant iterations of recognizable brands organizations attempt to communicate their ethos while staying in line with current design trends and norms? Despite not knowing how things will develop in the future, Roe believes that companies should still be aspirational.
“The goal should always be to make timeless logo designs,” he said. “Frequent & unnecessary rebrands are probably indicative of a larger problem within the organization. We see brands like Evil Geniuses and Dignitas throw away their iconic logos in favor of a hollow corporate rebrand, only to return to form with an updated iteration of their original branding.
“There’s a reason they made the decision to go back to their original logos, that’s what the fans identify with, there’s history there. Esports rebrands should aim to build on & improve what has already been established.”
It’s not uncommon to see new owners come in and change the logo (and overall direction) of an organization, as Roe stated. HBSE with Dignitas and PEAK6 with Evil Geniuses are perfect examples, only realizing that changes they felt were necessary would alienate their fan bases when the damage had been done. In these cases, they reverted back to the original designs, but attempted to modernize them.
Dignitas moved away from their iconic DIGI logo in 2018 just to bring it back in 2021, much to the delight of their fans and the wider industry.
“I hope we don’t see organizations with beloved branding pushed to rebrand simply because they feel pressure to modernize,” Flanagan added. “From the practical (what do I do with all my old merchandise?) to the emotional (I have fond memories of the old logo), any organization planning to rebrand has to do the work of appropriately retraining and reconditioning people on identification and association. A lot goes into that, so rebranding is a card you can pull maybe once. If the same org is rebranding multiple times, that’s a bigger problem.
“Brands can’t be futureproofed unless they’re composed of solid fundamentals, so organizations need to invest in great brand identities upfront — but that investment also must be ongoing. You need great designers who will continually think of ways to creatively apply the identity — through apparel design, photography, social, motion graphics — because that’s what can really keep decades-old branding feeling fresh and inventive. Org branding should be consistent and distinct while remaining flexible enough to incorporate changing rosters, games, and trends.”
The jury is out on whether the recent rebrands in esports will stand the test of time — though there are some that have been disappointing, to say the least — but it’s clear that this trend has emerged for the right reasons. Organizations want to optimize their potential for growth and success, and saying branding is part of that formula would be an understatement.