Beyond the Summit, The Guard shut down as layoffs spread across esports

Beyond the Summit (BTS), a leading esports production company and facility, has announced that it is laying off its entire staff. This comes shortly after traditional sports-backed esports organization The Guard announced it would be doing the same. These layoffs signal that even prominent esports companies are feeling the chill of esports winter.

Beyond the Summit was founded around 2012 as a passion project driven by love for the esports community. Over 11 years, BTS has professionalized and become a leading tournament organizer and production company, especially in the Dota 2 and Smash Bros. communities. More recently, the company has begun supporting creator-driven events.

BTS is known for their unique style, often focusing on a relaxed or intimate feel rather than a more traditional setting. Through this, BTS became a major player in esports. Despite their status, BTS is the latest casualty of the esports winter as layoffs spread.

“Based on our current financial outlook and how difficult the coming year looks, we have decided that it would be irresponsible to continue BTS in its current structure. So, after nearly 11 years in business, we’ve made the extremely difficult decision to let all of our people go,” BTS co-founder David “LD” Gorman said in a statement.

Gorman confirmed that Beyond the Summit has closed its doors now so as not to leave its staff out in the cold. BTS will keep all full-time staff on payroll for the next 2 weeks and will offer severance packages and health care coverage for US employees through the end of April. BTS also released a list of the 27 affected employees to help them secure new positions.

While esports companies may have received VC funding, Beyond the Summit did nothing but interest investors according to Gorman’s statement. BTS valued being grassroots and independent with an emphasis on community service.

On top of the final Summit event will be the upcoming Smash Ultimate Summit 6 which will take place on March 23-26.

Traditional Sports with drying support

Last week, The Guard suffered a similar fate to Beyond the Summit. The esports organization was founded in 2017 when Kroenke Sports and Entertainment purchased a franchise position in the Overwatch League. The Los Angeles Gladiators were joined by the Los Angeles Rebels in 2019 when KSE bought a spot in the sister Call of Duty League. In 2021, the team introduced The Guard brand to create a unified brand for its esports efforts, including Valorant, Halo, and Apex Legends.

Kroenke Sports and Entertainment is owned by Stan Kroenke. His sports empire includes Arsenal FC, Los Angeles Rams, Denver Nuggets, Colorado Avalanche and more. In the early stages of the Overwatch League, Kroenke’s support along with non-endemic heavyweights such as Robert Kraft (NE Patriots), Comcast Spectacor (Philadelphia Flyers) and Jeff Wilpon (NY Mets) added legitimacy to the league. It helped OWL further its goal of mimicking the structure of traditional sports.

Those initial investments from traditional sports have snowballed. Several sports organizations have turned to esports as a growth opportunity. Traditional sports leagues such as the NBA, NFL, MLB, NHL, MLS and many soccer clubs around the world have invested in esports leagues and tournaments of their own.

Unlike BTS, The Guard employees were blindsided by the news. Workers took to Twitter to express their shock and dismay. The former employee, Hunter Grooms, created a spreadsheet of the 29 workers affected. It is unclear what severance packages were offered.

Layoffs Esports chilling result

Both the closure of BTS and The Guard could have a chilling effect on the market.

Beyond the Summit was one of the largest unaffiliated esports tournament organizers. Last year, Saudi Arabia’s Public Investment Fund acquired ESL, a subsidiary of DreamHack and FACEIT. All three of these merged companies were large independent tournament operators. With the closure of BTS, there are even fewer – particularly in the US – independent tournament operators.

Meanwhile, traditional sports companies are a key source of investment and infrastructure for esports. Securing funding will become even more difficult than it already is if traditional sports companies lose interest. Likewise, as companies brace for a recession, they look for opportunities to cut costs. If esports doesn’t show a strong ROI for traditional sports teams and leagues, they may follow in KSE’s footsteps and cut esports programs.