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DreamHack bought for a crazy amount of money

DreamHack_Image.jpg

Modern Times Group (or MTG) has completed their acquisition of DreamHack. This investment follows MTG’s recent purchase of 74% of ESL, and marks them as a major shareholder in the future of eSports in Europe, and most likely the rest of the world.

It’s pretty important to note that MTG is an international entertainment group who operate on over six continents, with interests in TV channels and platforms, online services, content production businesses and radio stations, as well as being the largest shareholder in CTC Media - Russia’s leading independent media company.

This acquisition of another major player in the gaming events industry again indicates that eSports is becoming more and more of a viable business for mainstream investors, especially when you start looking at the numbers involved.

The DreamHack acquisition

DreamHack originally started in Sweden 20 years ago, and have hosted major eSports championships and events across Europe since their inception, with a first time event planned for the United States in 2016. DreamHack is probably best known for their Summer and Winter events, claimed to be the “world’s largest digital festivals”.

In 2014, the DreamHack hosted seven live events which attracted a total audience of over 105,000 people, with 34 million hours of DreamHack online content having being watched.

But the MTG investment in DreamHack is not made with pocket change. MTG paid SEK 244 million for 100% stake in DreamHack. Let’s stop for a second. That’s $28 million. Or almost 400 million Rand.

For this investment, DreamHack generated sales of SEK 69 million (around R112 million) in 2014, with the sales growth expected to be double digit figures in 2015.

DreamHack CEO Marcus Lindmark had this to say about the acquisition and future of DreamHack:

“DreamHack is already Sweden’s largest digital festival. MTG’s investment will not only enable us to consolidate our position, but also accelerate the international expansion of our festivals across the globe.  Our vision is to make DreamHack the festival of choice for Millennials everywhere. We have years of experience as an innovative and successful esports organizer and broadcaster, and of making entertaining esports content for both traditional and digital media partners. We have been working closely with MTG for the past two years to grow the esports even further, so we know each other well and look forward to taking our cooperation to a new level.”

Other recent MTG acquisitions

MTG just recently completed their share acquisition of Turtle Entertainment (for an undisclosed amount) who operates the ESL brand, along with online video entertainment network Zoomin.TV, and Splay, a Scandanvian multi-channel network in Scandinavia.

The ESL purchase will be the one of most interest for gamers, but it seems that the purchase of all three are strategic and will have positive spin-offs for eSports, as the investments are all a “key part of MTG’s transformation as a global digital entertainer,” and are “in line with our strategy is to invest in relevant, complementary and scalable digital brands, content and communities, and will enable us to bring our viewers the best entertainment we can across all of our verticals.”

What this may actually mean is that for Europe at least, eSports may have an outlet on slightly more mainstream TV.

The South African perspective

Well let’s be fair, the financial numbers involved internationally are not yet realistic in the South African scene. What needs to be taken away from this however is that the commercial and business aspect of eSports and events is becoming more viable.

A lot of the purchases and recent international focus on eSports has been on the live spectacle, and in South Africa, that is where we are still falling short. Getting that right (along with the obvious need to build a financially capable model) will be the way that other aspects fall into place - like live coverage on TV and major investment.

Whether we will be able to build the kind of organisations that resonate with international investors like MTG remains to be seen, but for now remember that everyone else started from nothing to get where they are today, so supporting the local events and tournaments means you are doing your bit at least.

Of course, there has to be a concern that (as with almost all industries), the bubble will burst for eSports and events, and investors will look elsewhere, especially considering the kind of numbers being thrown about. I mean, let’s be honest that’s some crazy money right?

[Source]

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"Or almost 400 million Rand"

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