What G2’s strategic partnership with Version1 means for esports mergers in 2024

Alban Dechelotte: “Honestly, it’s the Wilf family. We talked with the chairman of Version1, Jonathan Wilf, and he loves “Valorant,” he’s really passionate. So their long-term vision for esports, and their really nice words about the way we have built our organization — those are the most exciting things. Now, it means we are partnering with Gary Vee and them on the long-term to build something amazing, and having them as investors in North America, at a moment when the focus is to become the leading esports organization in North America, is a privilege.”

Digiday: It’s always good to have wealthy people in your corner, and particularly so in esports, so it’s not surprising to hear this from G2. Version1 was backed by Gary Vaynerchuk and the Wilf family — the owners of the NFL’s Minnesota Vikings. While the brand dollars going into esports might be slowing down, the leaders of both G2 and Version1 believe it’s only a matter of time until the esports industry truly finds its footing, and now G2 has the financial support to outlast the competition.

Brett Diamond: “At the start of the process, an obvious first step for us was talking with orgs that were not currently in the Call of Duty League, because that is a franchise league — that is a tangible asset in a way that non-franchise leagues are not. So the conversations really started there. Both Version1 and G2 had world championship aspirations in ‘Rocket League,’ and so we really didn’t start talking about the ‘Rocket League’ dynamic until a little bit later in the process, but we’re thrilled that we were able to align there.”

Digiday: As M&A ramps up in esports, expect the teams with franchised league spots to take advantage of the tangible value represented by these franchises. With price tags reportedly in the tens of millions, owning a franchised esports team can significantly boost esports orgs’ valuations on paper — although the collapse of franchised leagues such as the Overwatch League earlier this year might cast some doubt on the ongoing value of these spots.

Alban Dechelotte: “We have always been very focused on esports. We don’t manufacture energy drinks, we don’t recruit hundreds of creators, we don’t produce keyboards. We’re just an esports organization, and we try do do this right — and doing this right is not spending more than we generate in terms of revenues. It sounds like a fundamental basic, but that’s why we have been profitable for the last two years, despite macro or micro hurdles.”

Digiday: Given Version1’s properties are largely focused on competitive gaming, it makes sense for the org to merge with an esports-focused company such as G2. Dechelotte’s statement on the matter pokes some light fun at rival esports org 100 Thieves, which spun off its energy drink and game development arms in November in a bid to refocus on esports. 

Brett Diamond: “That’s to be determined, but it would not be the extensive presence in Minnesota that we’ve had in the past. The way I think about it is, so much of the premise for Version1 was obviously North American focused, with Minnesota Rokkr. Our first title was highly focused on Minnesota and building a local fan base in Minnesota as the jumping off point to a national fan base and potentially an international fan base. So it’s very much a ground-up approach that is very different when with an org that already has a national and international fan base.”

Digiday: Both Diamond and Dechelotte made it clear that Version1’s presence in Minnesota will be reduced following the deal, although the presence of teams like the Minnesota Rokkr make it necessary for G2 to continue to have a hand in the region. But the collapse of the Overwatch League, with its localized teams, has made it clear that regional markets — barring massive ones like New York City — are not necessarily a fruitful breeding ground for esports fandom. G2 is acquiring Version1 for its footprint in North America — not Minnesota in particular.