MLG Co-founder Mike Sepso discusses the ‘esports bubble’ and Vindex's success – Esports Insider
Mike Sepso — ESI Class of 2020 Hall of Fame inductee Mike Sepso — is an esports legend. The man that, along with Sundance DiGiovanni, founded Major League Gaming (MLG) is currently the CEO of Vindex — a company he also co-founded, again with DiGiovanni.
RELATED: Vindex to Join World Economic Forum’s Global Innovators Community
Vindex is a provider of technology and infrastructure to esports companies. Through its Esports Engine and Next Generation Esports arms, the company facilitates some of the world’s biggest esports events, providing services from programme design and management to event production and broadcasting. News broke in July that Sepso and co. had acquired GAME’s Belong Gaming Arena division while pledging to invest $300m (£222.02m) in the project. Vindex plans to roll out over 500 esports venues in the US and a further 1000 in other countries — mainly in Europe.
The middle of 2020 may not seem the best time to funnel $300m into the global roll-out of gaming arenas. Vindex is different, though. “Our infrastructure and technology enabled us to move to a remote broadcasting model,” Sepso told Esports Insider. “So we’ve been pretty lucky [during the pandemic] compared to some companies.”
The year wasn’t without its disruptions, however, and although the arena investment was committed, progress has been slow. “We had a few live events planned in February, and they obviously got put on hold. There was a major reset then… the pandemic slowed the progress of Belong venues in the US, which is a shame.
“The break has given us time to build up our management team, which is a small positive. The situation has knocked progress back two or three quarters, but all things considered, things look better now than we might have thought a few months ago.”
Last month, Vindex announced it was the first gaming company to join the World Economic Forum’s (WEF) Global Innovators Community. The initiative, according to the WEF, gives global leaders in innovation a platform to ‘engage with public- and private-sector leaders’, and to ‘contribute new solutions to overcome the current crisis and build future resiliency’.
RELATED: Vindex reportedly set to acquire GAME’s Belong
The Community will run strategy meetings, business roundtables, and global summits involving its members as well as key heads of state. But why was Vindex selected?
“Well, I’ve spent quite a lot of time with the World Economic Forum over the last couple of years,” Sepso commented. “They’re interested in getting more exposure to gaming, and I think they looked at esports as an interesting angle to approach that from. I think they also found esports to be an interesting growth story, that over the coming years will receive plenty of governmental and regulatory interest. I think they wanted to be involved in that.”
Esports investment in 2020
At first glance, 2020 was the year of the celebrity investor. Sergio Aguero, Dion Waiters, David Beckham, Ben Simmons, Swae Lee, and many more invested in esports teams this year. The massive valuation of Beckham-co-owned Guild Esports after its stock-market debut — an org with no track record to speak of — led some to question the appropriateness of valuations in esports, and indeed, others have warned of the ‘esports bubble’: a collective overvaluation of the industry, similar to dotcom companies in the late 1990s/early 2000s.
“I’ve been hearing esports is a bubble since 2007”
Sepso knows more about esports than just about anyone. What does he think of it all?
“I’ve been hearing esports is a bubble since 2007. There was the initial influx of capital back then, and that’s obviously continued until now. New valuations may be high, but that’s just supply and demand. Many startups would disagree emphatically that the esports industry is a bubble. Do valuations go up and down? Yeah. But I think part of the problem with this idea that the entire industry is unsustainable is that you can’t really correlate between teams and other startups; plenty of startups are doing just fine. Valuations of some esports teams are definitely ambitious. But I don’t think that’s necessarily reflective of the space as a whole.”
As for athletes and rappers investing, Mike has his own unique perspective on that, too. “You know, it’s funny, I often hear people say, ‘this or that has happened in the industry recently’, and to me, it’s been happening for years. From my perspective, athletes and celebrities have been getting involved in esports for 15 years. Gilbert Arenas sponsored ‘Final Boss’ back in the Halo 2 days. Richard Jefferson has been involved in esports since then too.
“I was at an esports/NBA crossover event back in 2014. Daryl Morey, who was the Houston Rockets General Manager at the time and was on the board of directors at MLG, was trying to sign Dwight Howard from the Lakers. Because of the NBA’s rules, we had to keep them out of the same room so that they didn’t get fined for tampering.
“The members of Linkin Park were big fans of gaming back in the day and were pretty involved with MLG. Vindex has a few celebrity athletes as minority owners. So from my perspective, athletes have been getting involved with esports for more than a decade. What’s funny is that lately it’s gone from being personal interest to business interest for a lot of guys.”
Esports in 2021
Looking ahead to the new year, ESI spoke to Sepso about what Vindex’s clients — including tournament organisers and game developers — are asking for in relation to esports events. “We plan to continue moving away from remote to in-studio events. There’s a major client demand for live events next year. We’re working with all of the necessary authorities and regulatory bodies to make sure anything we do is done safe. We have access to a lot of physical facilities, big sound-stages across the United States… we’ll just be trying to get things going again.”
2020 has been a challenging, unpredictable year for all. But for Sepso and Vindex, the horizon appears brighter now than it was before.
“Clients are reasonably tentative with how to run live events again, but we’re seeing a small shift. There’s a little light at the end of the tunnel now with the news of the COVID vaccines. We’re cautiously optimistic.”
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