Carlos “Ocelote” Rodriguez is the hot-blooded owner of G2, the strongest European team in League of Legends. He looks at e-sports and what other LoL teams are doing to build their brand and make money: He can only shake his head.
This is the situation:
- E-sports is a trending topic: Many companies want to invest in e-sports and start new teams. But many teams are losing money. This is how Schalke 04 had to sell its LoL team. Other teams are also reported to have financial problems.
- The team G2 Esports based in Berlin is considered one of the largest e-sports organizations in the world and is growing the fastest. G2 dominates especially in the LoL league LEC, but is also among the top in games like Valorant. According to Forbes, G2 has doubled its market value since 2020 and is now the most valuable e-sports team not based in Los Angeles.
- Faster than G2 is growing only 100 Thieves, who focus on fashion, and sell mainly merchandise products with their well-known influencers. 100 Thieves started the 2020s as a rather average team in the LCS, but managed to become champions in 2021 and runners-up in 2022.
In Germany, a team called “Eintracht Spandau” is emerging that also strongly focuses on its brand:
G2 in League of Legends in transition, still doubling company value in 2 years
Why is G2’s growth so remarkable? From 2020 to 2022, G2’s performance in League of Legends was not as strong as in previous years when they had a solid team and were mostly winning, even making it to the finals of Worlds 2019:
- 2020 was all right – the team confidently became champions in Europe in summer 2020 and at least reached the semifinals of the World Championship
- 2021 had issues – they traded top player Perkz before the season, finished only fourth in the summer playoffs 2021 and missed World Championship qualification: The first time in franchise history
- Now G2’s LoL team traded 3 more players, restructured, and was able to impress again in spring 2021
However, it was not the case that everything was running smoothly between 2020 and 2022. On the contrary: out of 5 core players with which the phase began, only 2 remain now.
Those who rely too heavily on individual creators will become unattractive to big brands
What is their key to success? The head of the team explains in an interview with Forbes what they do differently from the competition:
We monetize very differently than our competition: They often monetize only their individual creators, which brings a very small margin that cannot be scaled or maintained.
According to Rodriguez, a company that focuses so much on creators will also have trouble finding high-quality partners to work with, whereas G2 collaborates with heavyweights like Red Bull, BMW, Mastercard, or Phillips.
G2 aims to build the brand and logo with entertaining storytelling. If you build successful teams and specialize in storytelling, you are in control of your success and will also be extremely attractive to advertising partners:
Sponsor deals are a big element of how to sustain a business. We are able to create more value for our partners than they pay us, which ultimately leads them to be willing to renew their deals. This is something we are proud of, and it shows how we have been able to provide them with more value over the years.
You not only have to win, but you also have to entertain while winning
According to Rodriguez, it is not only important to win, but you also have to entertain. This can be achieved through exciting storytelling. Everything must always be connected to the brand.
Everything is a bad investment if you do not build a brand.
According to Rodriguez, an e-sports team does not operate like a typical sports team: There, people just show up who live nearby to support their team. In e-sports, this is not the case. As long as you create content in English and engage gamers, people from all over the world will see the content and become fans.
In the meantime, some in North America would prefer to support G2 at an international tournament rather than a US team, because the brand is more important than nationality.
We have had an in-depth discussion with the creators of the German LoL team Eintracht Spandau on a podcast:
“What are other teams doing all the time – maybe a lot of parties?”
What does he say about other teams? Rodriguez explains:
So many teams fail to make a profit, and I am not surprised at all. Some teams have lost double-digit millions of US dollars. That is about what I have invested since the founding of G2. I have no idea what our competition is doing – maybe a lot of parties? But what exactly are they celebrating there?
He spares some teams from harsh criticism:
- 100 Thieves is really close to modern culture, understands gaming, hype, street and fashion
- Team Liquid has an extremely ambitious ownership group and would invest a lot of money to keep the company relevant
- FaZe is now “too big to fail” – they will definitely be around for a long time
If you develop a new game, you need G2
For his own team, Rodriguez is now planning what FaZe has already achieved:
“To be honest, we are now at the point where we are getting too big to fail. We have built up too much credibility over the years at the business and fan level. This also applies to publishers: If you develop a new game, you need G2”.
Those interested in e-sports will likely be drawn to G2. If you are a brand looking to sponsor a top team, you will most likely end up with G2.
What lies behind it: What G2 succeeds at and other teams do not: G2 has big names in their team, like Perkz or Caps, but always ensures that the brand “G2” is the most important and is known for its “own style”:
- Rodriguez no longer even mentions the former “big name” Team SoloMid. TSM is in a crisis after all stars and franchise players like Bjergsen have disappeared there.
- But G2 can give up their franchise player, Perkz, and put 3 relatively unknown players in the starting five and still double their market value. The G2 brand remains constant.
G2 has built a reputation as a “cool, somewhat trollish team” that does not take LoL too seriously and likes to mock opponents and joke with each other. They have maintained this reputation for years:
LoL: Koreans crash under the pressure of Worlds – G2 Esports laughs it off
