The Sweden based Modern Times Group (MTG) is combining their two esports divisions, Dreamhack and ESL. The two companies were subsidiaries of MTG since 2015 when they were both acquired.
ESL was the world’s largest esports company and Dreamhack was a major gaming and lifestyle company that has organised some of the largest events, LAN parties, and fan meetups in esports.The official name of the new outfit is ESL Gaming. It will be led by the co-CEOs of ESL, Craig Levine and Ralf Reichert. Former Dreamhack CEO Marcus Lindmark will also be part of the ESL Gaming executive team. The change is effective today, September 30th.
While the companies are being merged, the brands will remain the same. That means that any event that comes under the Dreamhack banner will still be a Dreamhack event. While the brands remain the same, the company is different. This is an attempt to improve their finances after the major blow to the esports community that was the Covid-19 pandemic.
In March of this year, MTG announced to its investors that their esports revenues could reduce by up to 45% in the first half of the year.
The CEO of MTG announced in their press release that, “the combination will create significant shareholder value both short term through the more efficient organization and operations and long term.” It is clear that this merger is a direct result of financial losses in the 2nd and 3rd quarters of 2020.
“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”, said ESL Gaming Co-CEO Craig Levine.
While the intent of the merger seems to be mainly financial, it looks like the current leadership is poised to make the best of their situations and improve their services.
Lindemark, the now former CEO of Dreamhack confirmed in the ESL Gaming press release that he wanted to expand the Dreamhack events.
“With ESL, we will be able to offer a more tailored approach for both our community and our partners across all regions through an array of gaming and esports opportunities, all while creating impactful and memorable experiences. The future of gaming is now, and we are excited to create the future together.”
Unfortunately, ESL has confirmed with gamesindustry.biz that the company will be facing a round of layoffs.
“There will be a small number of personnel changes in both size and scope … Regretfully, in light of the global pandemic and the challenges that have come with it, many businesses are currently facing difficult decisions, and this is no different with ESL Gaming – this is something we do not take lightly. Our staff is family, and we will do all we can to support everyone affected during this transition.”