Credit: Immortals Gaming Club
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The recently-rebranded Immortals Gaming Club 
has made a series of big moves over the last year. Of course, the organization’s recent $100M USD acquisition of Infinite Esports & Entertainment —parent company of OpTic Gaming and the Houston Outlaws —is freshest in the mind of industry observers.
However, Immortals first made an acquisition splash last year, picking up fan-favorite Brazilian Counter-Strike: Global Offensive (CS:GO) organization, MIBR . At ESL One Cologne, Immortals Gaming Club Vice President of Finance, Tomi Kovanen, spoke about the organization’s success so far in the Brazilian market. Kovanen, a former Counter-Strike pro player who previously co-founded Finnish organization ENCE , joined Immortals in February 2018.
“We actually got a little bit lucky with the Brazilian market, in that I think it’s actually better than we thought at the time. I don’t think we recognized how passionate the fanbase is, and how interested people there are in MIBR and the players,” he said. “We knew that it was good and that it was pretty untapped in terms of the market, but it’s even better than we thought. I wouldn’t say that we’ve figured out fully how to take advantage of that. I don’t think we’re monetizing as well as we should be on a sponsorship basis, but we think that there’s a lot of potential there and we’re very excited with all of that.”
“To be completely honest, there [are] times when I’m not very confident in CS:GO as an esport.”
Immortals recently increased its stake in the Brazilian market with the acquisition of regional community platform Gamers Club , which factors into the rebranding. Kovanen sees marketing opportunities between MIBR and Gamers Club—such as a planned fan event in August—and said that Immortals has access to about 1M Brazilian CS:GO players via the platform.
“Everybody who plays Counter-Strike in Brazil basically goes there,” he said.
A Counter Take
Although Immortals Gaming Club has a prominent CS:GO roster with MIBR , the longtime Counter-Strike veteran admits that there are unique challenges to the first-person shooter’s competitive scene. With so many different tournaments in the mix and a hands-off approach by publisher Valve , it’s a difficult proposition for many organizations.
Credit: MIBR
“To be completely honest, there [are] times when I’m not very confident in CS:GO as an esport,” said Kovanen. “It’s just that the Counter-Strike ecosystem is far too fragmented. Unfortunately, the way that you could fix it is by effectively getting rid of two-thirds of all of the tournament organizers. Then you would basically have a little fewer events, almost the same number… and all of a sudden, the tournament side should be very profitable, and you could probably also monetize it at a higher level, as there would be less competition for media rights and everything else.”
He suggests that consolidation is the likely path, but that it’s not going to be a speedy process. Perhaps some tournament organizers will merge and gradually trim down the number of competing operators, but ultimately, he believes that something has to be done. “You’re going to have to figure out something like that at some point, because right now the ecosystem is not balanced, I think would be the best way to put that,” he said. “It’s a good time to be a player. I don’t think it’s a fantastic time to be anybody else.”
Because of the Infinite acquisition, Immortals is currently in the process of trying to divest itself of OpTic Gaming’s CS:GO team to avoid conflicts of interest. He said it’s “probably the cheapest chance anyone’s had” to acquire a complete top-20 team, as Immortals is effectively being forced to sell the roster, and that buying a top-level team is rarely an option for anyone. Usually, he said, organizations have to start fresh or build around one or two experienced players.
“We actually got a little bit lucky with the Brazilian market, in that I think it’s actually better than we thought at the time. “
“It’s prohibitively expensive to buy a full top team. You basically can’t do it. We just got lucky that all of the SK Gaming
Thoughts on Fundraising
Alongside the Gamers Club acquisition news in May was the announcement of a $30M Series B funding round. It had actually been completed well before the Infinite acquisition, as Kovanen said that about half of the money was pre-closed as of last November, and the company left the round open for a while thereafter.
The team hopes to sell off the Houston Outlaws in the next couple of months, as Immortals owns the Los Angeles Valiant and cannot operate than one Overwatch League team. Until that happens, the Outlaws are being operated as a distinct entity, with oversight from the league. The eventual sale will cover a lot of Immortals’ cash needs, but Kovanen knows that the organization will be looking for additional funding in the not-too-distant future.
Credit: Los Angeles Valiant
Related Article: Immortals Gaming Club CEO Ari Segal Discusses OpTic Acquisition, Return to LCS
“It is fully our plan to go back to the market at some point, but we don’t know whether it’s going to be three months, six months, nine months, or 12 months,” he said. “I think it depends partially on how quickly we can integrate Infinite and get things up and running.”
Even with plans to secure additional funding in the future, Kovanen said that he’s wary of what he sees as the recent trend of sky-high team valuations. “I don’t think I would feel comfortable pushing for the valuations that I hear some teams are now getting in the latest rounds,” he said. “I think if you do the back-of-the-envelope math on what kind of exit you would need out of $400-500M valuations, it’s going to be hard to find checks for that size.”
Kovanen believes that Immortals Gaming Club’s own structure—as a family of brands under one umbrella company—gives it more flexibility and liquidity in an eventual sale scenario. Each brand has its own contracts, accounts, and distinctive fans, making it more likely that the company could parcel out individual brands to different buyers if desired. On the flip side, he believes that the Infinite acquisition should give hope to teams and investors looking ahead to an eventual exit.
“We tell everybody on our board and everybody when they’re talking about investing, it’s a 10-year investment.”
“I think that’s why everybody else in esports should be pretty happy that we bought Infinite,” said Kovanen, “because that actually shows investors that there is a way to exit at least in the $100M range—which is certainly already much higher than anybody’s done before.”
Immortals’ recent moves should make it clear that the organization has no short-term plans of pulling out. In fact, Kovanen said that they prepare investors to plan for the long haul.
“We tell everybody on our board and everybody when they’re talking about investing, it’s a 10-year investment—it might be a 15-year investment. And that’s how you actually maximize value, is to not hope that you’re going to find a great buyer in five,” he said. “You might. Hopefully you do. But realistically, I just think we’re a little bit further out as an industry before getting to maturity and really being able to maximize value.”
Editor’s note: Interview conducted by Graham Ashton.
