When the growth and success of the esports industry is discussed, typically the conversation includes Asia, Europe, and North America. Galaxy Racer, a Middle Eastern organization, are looking to develop the region by achieving global recognition while retaining focus on their origins. To help with this mission, they’ve merged with fellow Middle Eastern org Nigma.
The few esports organizations that are actually profitable at this stage in the industry are those that have diversified streams of revenue, with emphasis on those away from competing. Merchandise, content, sponsorships, and membership schemes are common means of generating revenue for most high-profile companies. Galaxy Racer, based in Dubai, are no different.
They have five divisions, namely content creation, tournament operations, merchandising, their new music label GXR Records, and their competitive operation. The latter will now be known as Nigma Galaxy as a result of their new merger with Nigma, another seldom prominent Middle Eastern esports org. Founded by Team Liquid’s former Dota 2 roster, and victors of The International 7, they’ve joined forces with their former competitors to strengthen their collective foothold in their nation and beyond.
Both Galaxy Racer CEO Paul Roy and Nigma co-founder Mohamed Morad spoke with Dexerto to explain the reasoning behind the union and how it will set them up for further success moving forward.
The Hitchhiker’s Guide to the (Nigma) Galaxy
Comparitively, this merger is like FaZe Clan and OpTic Gaming joining forces — they’re two of the biggest esports brands in North America, much like Nigma and Galaxy Racer are in the Middle East. While the two NA giants have recently launched their own collaborative merchandise, that’s likely to be the extent of their working relationship.
How exactly did the MENA region’s biggest competitors decide to stop competing and instead work together on a permanent basis?
“The boys at Nigma met my head of esports and they started out talking about Dota 2,” Galaxy Racer CEO Paul Roy told Dexerto. “We all later met for a beer and figured out that we liked each other, one thing led to another and it felt like a good marriage. Some of our verticals are doing really well but we’re fairly new in esports, that’s where we were lacking. We weren’t a tier-one organization. This opportunity was too good to pass on.”
“When we started our journey, we figured out that we wanted to put a lot of emphasis on the MENA region,” added Nigma co-founder Mohamed Morad. “We saw Galaxy Racer as our main competitor and, over time, we saw them expanding and growing and we naturally developed a relationship with them. We share a passion for competition.
“Nigma means ‘star’ in Arabic and Galaxy Racer’s name fits into that theme. They understood that Nigma is an established brand and already developed an affinity to it, we wanted to have a natural integration of the two entities and figured that Nigma Galaxy was a perfect combination. A galaxy full of stars.”
Many major organizations have divisions for their different endeavours that are all named the same, creating a uniformed, all-encompassing brand where the lines are certainly blurred. Self-evidently, Galaxy Racer aren’t on board with that strategy as demonstrated by the formation of Nigma Galaxy.
“There are a few leading organizations where you can’t really distinguish what they are,” explained Roy. “Are they a competitive team, are they a content team? We like each of our departments to have their own clear identity and this distinction allows Nigma Galaxy to concentrate on what they do best: esports.”
The Middle East and beyond
‘Global expansion’ is a growingly popular, somewhat-buzzwordy phrase that has been spouted by every organization with international ambitions over the past couple of years. While franchised leagues like those seen in Call of Duty League and Overwatch League are built around specific locations, most organizations are built for global fandom. Despite this, the industry is keen on categorizing team brands into the region they were founded in — Nigma Galaxy isn’t interested in such constraints, though both Galaxy Racer and Nigma have looked to develop their home region from their get-go.
“If you look at our competitive rosters, we only have one team in the Middle East,” Roy said. “We’ve always had a European base when it comes to esports. With Nigma coming in, there will be a new strategy where they will expand into a few titles and cut a few titles. We’re not entirely a Middle Eastern company, I just happen to live in Dubai — a lot of our team are in Europe, North America, and Southeast Asia. There are certain territories that we want to be in, South America and Far East Asia are areas we really want to be in.
“We’ve got a little bit of insight into emerging markets for gaming and esports because another of my companies makes games. I track a lot of user data across the world and it’s the reason we got into female esports. Females control about 78% of all game spending; 40% of them play games themselves and the other 38% control the decision-making with in-game spending. There’s a huge opportunity there.”
“We have both been putting a lot of emphasis on developing the region and trying to build the infrastructure,” Morad told Dexerto. “We both spawned from that region but we want to be global entities, right now we’re the only two here with that positioning.
“We’re sure there’s talent in the Middle East, a lot of our talent have backgrounds in the region and all they needed was a chance. Everybody used to be afraid to pick up a player from the region — are the cultures going to clash or will they fit into a European team? Now the two biggest organizations from the region are working together, we think this will create more chances to give back to the community and give more chances to the people of the region. It’s a huge win for the Middle East because of the resources Nigma Galaxy will have.”
We’ve seen the likes of LOUD focus exclusively on underserved and emerging markets and it certainly seems like Nigma Galaxy are aware of how lucrative this can be for them, never mind how beneficial it can be for the entire industry and the nations they focus their development efforts on.
𝗔 𝗡𝗲𝘄 𝗘𝗿𝗮 𝗕𝗲𝗴𝗶𝗻𝘀🌟
— Team Nigma (@TeamNigma) September 20, 2021
While they’re going to continue providing opportunities for players in the Middle East, they’ll continue on their path of having a significant presence in areas that are already well-established. Trying to combine the best of both worlds is a costly and attention-heavy practice, but as Galaxy Racer’s CEO goes on to explain, they feel equipped for the lofty task.
“Right now we have about 185 people working under Galaxy Racer, and we’ll probably be at 205 with this merger,” Roy revealed. “As a group, Galaxy Racer is a profitable operation. If you pick it out per vertical, that may change. One vertical feeds off of another so I always view the units together.
“We want to be the biggest esports organization in the next three years. Titles, fan following, and revenue will be the key indicators there.”
The jury is out on whether these metrics can be met. There are already dozens of options for fans looking to support a team, considering the global appeal of the bigger organizations, so it will take something extraordinary to stand out and also produce products and services that esports’ young demographic is willing to part with its cash for.
While three years sounds like a slog, this industry is developing all the time with record-breaking partnership deals, unexpected collaborations, and new titles always appearing to be on the horizon.