G2 Esports not affected by esports financial crisis

G2 has been commercially successful over the past two years and is now at a pivotal stage under new leadership. G2 faces some important challenges and the decisions that will be made in the coming months will fundamentally transform the company.

The bubble that has formed around esports over the past two years is slowly disappearing. There has long been concern that the financial situation in esports could deteriorate again, at least in the current state. What about G2 Esports?

Is G2 better without Ocelote?

The bubble that has formed around esports over the past two years is slowly disappearing. There has long been concern that the financial situation in esports could deteriorate again, at least in the current state.

At G2, that uncertainty took on another dimension following the departure of founder and former CEO Carlos Rodriguez. He resigned as CEO at the time because there was a backlash against G2 after he publicly defended the questionable influencer Andrew Tate.

This resulted in G2 being denied VALORANT franchising, however apart form that, it didn’t hurt the organization a lot. Even without Ocelote, G2 teams are excelling in several esports titles and have already earned several trophies this year, such as the Six Invitational, IEM Katowice, and the LEC Winter Split.

The secret of G2?

But just because you win doesn’t mean that all running costs are covered. After all, slots for the biggest franchise leagues in the world are extremely expensive. Esports organizations are of course largely financed through partner deals and sponsorships. Of course you get better deals if you are popular and attractive as an organization.

Content creation plays a very important role these days, as G2’s General Manager, Romain “Romain” Bigeard, explained to ex-Fnatic coach Jakob “YamatoCannon” Mebdi in his podcast. He gave an insight into the structures of G2.

Recently there have been quite a few reports of esports organizations disbanding their teams or selling their franchise slots due to money problems, including Heroic, TSM, CLG, Astralis, and FaZe Clan. G2 doesn’t seem to be affected that much because they have a very stable fan base and successful teams generate better advertising revenue.

According to Digiday, in contrast to the rest of the industry, G2 even made a profit in 2021, according to a financial report published in Germany – with an EBITDA (profit without deduction of interest, taxes & Co.) of 1.37 million euros.

G2’s revenue model

“G2 has been profitable for the last two years,” said Alban Dechelotte, who replaced Ocelote as G2 CEO in January after joining the company in 2021.

Dechelotte previously worked at Riot Games, Havas and Coca-Cola and has said that G2’s revenue is 60 percent from brand collaborations, 30 percent from payments from game publishers, and 10 percent from merchandise like team jerseys. G2 also has deals with top brands like Red Bull, Mastercard, and Adidas in almost every category, which further protects the company from financial hardship.

This revenue model has so far allowed G2 to weather the headwinds hitting the company and esports in general. However, Dechelotte does not leave much to chance. Since being appointed permanent CEO in January, he has wasted no time internally transforming G2 into something more democratic.

Hopefully, G2 can keep that up and not become the next team that has to announce layoffs or team disbandments because they can’t pay their people anymore.

Header: G2 Esports