ESL FACEIT Group acquires Vindex to support esports events

ESL FACEIT Group (EFG), the leading group of esports event organizers, has acquired Vindex to support and expand its business. Vindex specializes in data, technology and infrastructure solutions for esports events, making it a prime acquisition target for EFG.

Financial terms of the deal were not disclosed.

Added value of Vindex

Vindex’s portfolio includes integrated solutions for data analysis and production.

“One of the things we tried to solve with Vindex was to give publishers a big institutional partner to work with,” Vindex CEO Mike Sepso told GamesBeat. “At Activision Blizzard, I learned firsthand that there were a lot of interesting small companies focused on different parts of the esports value chain. It’s really difficult for a very large company to work with 20 different partners and vendors around the world.”

The Vindex Intelligence platform provides brands, publishers and creators with powerful consumer data and omni-channel analytics. Vindex focuses on optimizing broadcasts, measuring engagement and showing the ROI of reaching esports and gaming fans.

Esports Engine produces broadcasts, physical and transformative events for esports, gaming and creator audiences. Although the company itself is not owned by a publisher, it works closely with them on a white label basis. Esports Engine has been a production partner for the Halo Championship Series, Apex Legends Global Series, The Call of Duty League, The Overwatch League and more.

This is a noticeable difference in strategy compared to EFG’s ESL, FACEIT and DreamHack brands. EFG’s labels mainly produce events under their own brand. Craig Levine, co-CEO of ESL FACEIT Group, confirmed that part of the appeal of acquiring Vindex was to be able to offer more collaboration opportunities to publishers, both in a white label and partner model.

Vindex has also developed new technologies for its broadcast partners. “We’ve moved to an almost entirely remote broadcast capability. We needed to rent several satellite TV trucks, employ 20 to 30 people per broadcast, and have the observer’s camera on site. Now, we can do this anywhere,” Sepso added. “Because we’re dedicated to esports, we can achieve the kind of technical innovation you wouldn’t necessarily see running just one league within a publisher.”

Prior to the deal, Belong Gaming Arenas – a chain of brick-and-mortar esports and gaming venues in the US and Europe – was also part of Vindex’s portfolio. In September, Belong switched from a sole ownership and operation model to a franchise model. While the two companies will continue to work together in a professional capacity, Belong will be spun off into its own separate entity.

Levine confirmed that this decision was due to a difference in the focus of the business with EFG’s priorities. “The Esports Engine and VIP businesses that Vindex operates are core and complementary to who we are at ESL FACEIT Group,” said Levine. “Spinning off Belong into a standalone entity was about skill and focus.”

Possible pitfalls

EFG was created when Savvy Games Group (SGG) acquired ESL Gaming, its subsidiary DreamHack and FACEIT for a total of $1.5 billion in January 2022. Savvy Games Group is funded by Saudi Arabia’s Public Investment Fund and the controversial Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud serves as its President.

Since the initial merger was announced, the esports community and the wider gaming community have debated the ethics of taking funding from Saudi Arabia. Critics argue this is a form of “esports laundering” to distract from the country’s human rights record.

Savvy Games Group has recently increased its investment in esports. In September 2022, SGG revealed plans to invest $38 billion in the broader gaming industry, with $533 million earmarked for growing early-stage gaming and esports companies. By February 2023, SGG has invested $265 million in VSPO, a Chinese esports tournament company. Unlike ESL FACEIT Group’s acquisition of Vindex, VSPO will operate separately.

“We are affiliated with PIF through Savvy Games, but EFG is a purely commercial entity. We operate completely autonomously,” Levine emphasized. “We’ve made sure that all of our customer data is truly isolated at an operational level. Nothing changes for Vindex data because of the independence we have at Savvy.

The other clear concern is the rapid consolidation of independent tournament operators in esports. Earlier this week, competitor Beyond the Summit closed its doors. While many publishers were already working with either EFG or Esports Engine, the acquisition leaves fewer options.

According to Levine and Sepso, the size and scale of businesses matter more in tough economic times.

“At the end of the day, I’m not too worried about fans worrying about how many businesses like ours are out there, because Craig and I can’t do our jobs if it’s not for publishers like Activision, Valve, EA, Microsoft and Sony,” Sepso said. “We need these big companies to continue to take big bets on great games and esports. Only then can we do our job when everything is out of play.”

Rivals among colleagues

The esports industry is quite niche today, but both Vindex and EFG’s leadership teams are easily industry veterans. Coincidentally, Sepso, his longtime business partner Sundance DiGiovanni (co-founder and chief strategy officer of Vindex), and Levine began their esports careers in New York in the early 2000s. All three studied at NYU but met through the growing local esports scene.

Sepso and DiGiovanni would go on to found Major League Gaming which was acquired by Activision Blizzard in 2015. Meanwhile, Levine founded his own agency and tournament operator which was acquired by ESL in 2014 to begin its expansion into North America.

“We’ve known each other for literally 20 years. We helped build this industry, but this group of people has never been under the same roof before. When we first started talking about it, we joked that it was like the Dream Team of esports professionals. We have competed against each other quite hard at times over the years, but now is the first time we are putting these historic players in the same team,” said Sepso.

So what’s first for the new executive super team?

A piece of low-hanging fruit gives access to the VIP platform to both internal ESL FACEIT Group teams and partners. Optimizing content and measuring engagement and ROI are top priorities, but there could also be opportunities to integrate existing EFG datasets, such as that from FACEIT’s online tournament platform.

DreamHack was also mentioned as an early focus for the acquisition. DreamHack’s unique events blur the lines between esports tournaments, gaming conventions and festivals. The EFG team experimented in June 2022 with a sports event in the Netherlands. However, the team views its efforts in the US as its first priority.

Sepso will continue to serve as CEO and DiGiovanni as Chief Strategy Officer at Vindex while assuming leadership roles within EFG.