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Prior to joining ESL as its chief operations officer in 2017, David Neichel had spent seven years with Activision Blizzard, most recently as its vice president of international commercial development. Along with an earlier four-year stint with Electronic Arts, Neichel logged more than a decade on the publishing side of the games industry—but he told The Esports Observer at ESL One Cologne last month that he had longed to work on the other side of the equation.
“Instead of focusing on the games and making the best possible games, I wanted to be on the side of the players,” he said. “That’s what I think is very exciting with esports, because it’s really something which is taking the side of the player and pushing the experience of gaming into something that is a sport.”
Less than a year after joining ESL—and just months before the company’s bold rebranding effort was unveiled—Neichel was promoted in August 2018 to co-CEO alongside co-founder and current CEO Ralf Reichert. According to Neichel, the doubled-up role allows the two to work in tandem in some respects, but separately in others.
“When I look at what we do today, I think we already have set the bar quite high and will relentlessly continue to do. “
“The main idea is that we split the roles,” he said. “In a lot of companies, when you have rapid growth and reach a different size, then there are a lot of things you need to do to deliver the best possible product, continue to have global growth in a lot of different countries, continue to develop different sources of revenue and innovate. The main point here was to make sure that we could give some freedom to Ralf to work on the strategic development part, and my job is to make sure the company is managed properly.
“We are like sparring partners, which is working quite well,” Neichel added. “We are very different, but at the same time working in trust.”
Credit: Helena Kristiansson/ESL
Location Isn’t Everything
When it comes to putting on large-scale tournaments, ESL sees more support from some local governments than others. Katowice, Poland—the site of the annual Intel Extreme Masters event—is a key example of how economic incentives and marketing cooperation can help an ESL event become a fixture on the calendar. Montpellier, France, is another example, according to Neichel. That hasn’t been the case with Cologne, Germany, which just hosted the sixth annual ESL One Cologne event.
“We should improve that,” he said, “recognition from governmental bodies and making sure they understand the opportunities for the city is a challenge we need to address.”
ESL One Cologne falls somewhere in the middle of the pack for ESL events in terms of expenditures and revenue, said Neichel—but with 15,000 Counter-Strike: Global Offensive fans packing a sold-out arena, ticketing is a significant revenue driver. Even so, with the increasingly global appeal of esports and wide international online viewing audiences, he said that location can be a very flexible element of a tournament.
“Our goal is to establish locations and remain in this area to build a proper legacy. Cologne is quite a good example here.”
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“We are hosting tournaments everywhere in the world,” he said. “Our goal is to establish locations and remain in this area to build a proper legacy. Cologne is quite a good example here. It’s also where our headquarters are based and where everything started, so Cologne is a very exceptional city for us. In general, what we try [to do] is to make sure that to have the best possible tournament series, it’s very important for us that all events we do are part of the bigger narrative, a part of what we call the full ecosystem for a game. A part of a zero-to-hero story. And so we are working very hard right now to make these stories even more compelling, to make them also very much global, and it means that where we do it doesn’t matter so much.”
Building the Story
ESL has partnerships with a number of major non-endemic brands from various industries, including DHL, Mercedes-Benz, and Warsteiner. Once brands like these have time to familiarize themselves with the esports audience and the types of activations that work for them, Neichel said that it opens up a lot more possibilities for creative exploration.
Credit: Helena Kristiansson/ESL
“There is always room for improvement,” he said. “When I look at what we do today, I think we already have set the bar quite high and will relentlessly continue to do. ESL delivers a lot of value for our partners. When I look at the level of return that we’re giving to them in terms of enabling them to reach big communities across the world with a lot of engagement. We help brands also to create the best content and a way to engage with authenticity with these communities. It’s absolutely amazing.”
For ESL, sponsorships are necessary to provide financial resources to pull off major events, leagues, and other initiatives. Neichel cited a Nielsen report that showed that brand acceptance for esports fans is very high, as they typically understand that brand support is needed to fuel a nascent industry. On the flip side, partnering with ESL provides brands with a young and engaged audience, but Neichel said that it’s tricky to find the balance in providing appropriate value for both parties.
“We help brands also to create the best content and a way to engage with authenticity with these communities.”
“One thing we absolutely have to do, and continue to do, is to make sure that we get the right value in return for the value we create for the partners,” he said. “The thing which is very key is that today, if any brand is investing into esports—which is quite still under-developed—they get much more value in return than any natural sport. Every time we measure that, it’s between 10x more up to 35x more, in terms of return on investment.”
Creating real and lasting value on both sides of the partnership means more than just putting a logo on a broadcast or signage. For Neichel and ESL, it’s about that authenticity and storytelling—trying to find a natural way to integrate brands into the ESL event experience so that everyone benefits both now and hopefully well into the future.
“Most of the value on both sides is to be created over time. It’s not just like putting advertising somewhere,” he said. “It’s probably something that ESL is doing uniquely because we live a very professional and comprehensive relationship to our partners. We want to build a real story and build a real activation and integration with brands, to combine our content, communities, brand’s values into something consistent.”
Editor’s note: Interview conducted by Graham Ashton
