Dreamhack: A history

The only way to talk to a community is to talk with them, not about them.

We are seeing an excellent example of how not to do it being portrayed by the way Meta is currently talking about their new "teenager accounts" mostly addressing parents or politicians. How soon before we see a mass migration off of Instagram to Snapchat? Or perhaps it has already happened?

And in addition, there are a lot of adults speaking up about DreamHack without being factual when adressing the changes the company has gone through.

So I thought I'd take a stab at educating a bit, with data.

Having been part of the festival as crew member, partner, team management and visitor if nothing else I have a number of different lenses to view it from. Without further ado I give you; Andjela's school of esports, chapter 1, DreamHack.

No personal opinions are shared in this piece, just a bunch of data and anecdotes.

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First things first, like David Copperfield, "DreamHack" was born.

Albeit not an organism, definitely a cluster of birds with it's own organic leadership and life.

In the basement of an elementary school in Malung, back in 1994, to Borl?nge in 1997 and then from 2001 until this summer in J?nk?ping, Sm?land the LAN party expanded from the largest in Sweden to the biggest digital festival in the world hosting huge global tournaments in games like Counter-Strike, League of Legends and beyond. The summer of 2024 marked the last DreamHack event to be held in J?nk?ping as the company decided to move their Swedish focus to Stockholm.

Now to the acquisition history.

Acquisitions in esports and games is nothing new and is often challenged.

Tencent, the Chinese multinational conglomerate, has made numerous acquisitions and investments globally, especially in gaming, entertainment, and technology. So have Microsoft, Amazon and other global players. While Tencent has been scrutinized for its potential ties to the Chinese government, the American companies have to date not been as challenged with regard to security concerns but the sentiments rather index on the stifling of innovation.

In November 2015, Modern Times Group acquired 100% of DreamHack for 244 Million SEK as part of their digital culture/gaming focused initiatives under their digital accelerator MTGx. By then the company’s seven live events in 2014 attracted a total audience of over 105,000 people, and esports fans have watched 34 Million hours of DreamHack content online. The company had at the time notably generated 69 Million SEK in sales in 2014 and was profitable for the full year.

The investment into DreamHack followed MTG’s acquisition of 74% of ESL, the world’s largest esports company. In 2020, on the 30th of September, ESL announced that it had merged with DreamHack. The two companies are functioning as one, but the two brands are operated separately.

In 2022, MTG issued the following press statement about the sale of the combined assets to Savvy Games Group.

Stockholm, Sweden, [24?January 2022 10:15?PM?CET] Today, Modern Times Group MTG AB (”MTG”) announces the sale of ESL Gaming, the world’s largest independent esports company, to Savvy Gaming Group (“SGG”) in an all-cash transaction valuing ESL Gaming at an enterprise value of USD 1,050 Million (equaling 9,723 Million SEK [1]). MTG owns 91.46% of ESL Gaming, which corresponds to USD 960 million (equaling 8,890 Million SEK [1]) of the total enterprise value and represents a total return on investment of 2.5 times. SGG is simultaneously acquiring FACEIT and will merge the two companies to create the leading global platform for competitive gaming – ESL FACEIT Group. The transaction is subject to regulatory approvals which will include anti-trust and foreign investment screening.

This is where it starts to become a matter for discussions in the eyes of gamers all over the world.

The Public Investment Fund (PIF), Saudi Arabia's sovereign wealth fund, is one of the largest in the world, managing assets exceeding 6.063 Trillion SEK, according to the Sovereign Wealth Fund Institute. In 2021, PIF established its own gaming company, Savvy Gaming Group (SGG), now Savvy Games Group, as part of its strategic goal to diversify the local economy and strengthen its influence in the global gaming industry.

To position itself as a leading player, SGG recruited top executives from some of the world's largest gaming companies, including the American Activision Blizzard and French Ubisoft. The initiative is in line with the Saudi Arabia's Vision 2030 plan, which aims to reduce the country's dependence on oil and develop new industries, including entertainment and technology.

PIF also started building Qiddiya, their planned tourism and mega entertainment project in Riyadh which was represented with a booth at DHW 2024. This is not the first a city or tourism agency has a booth at DreamHack, even the Swedish Military have done several collaborations on site at the events.

However, given the differences in values and human rights and combined with the fact that DreamHack for instance was built by volunteers many part of the HBTQ+ community, the sale to SGG catalyzed a mass-migration of talent out of the ecosystem. As a reaction to the announcement many players, casters, photographers and others swore publically never to work with ESL again, citing ethical concerns over Saudi Arabia's human rights issues. They questioned where the money for these projects are coming from.

Since then however, many have started working with ESL again notably at Elisa Masters Espoo 2024 as well as the first CS2 PGL Major Copenhagen in March 2024. Unofficially some underline the global economic crisis and state the question is no longer if they want to work with SGG, but rather if they want to work with esports at all.

Other profile take a different approach, specifying they believe the only way to drive change is from the inside, leveraging diplomacy and re-entering the scene enabling dialogues and challenging perspectives.

On November 21, 2024 as a reaction to the published exhibitors at DreamHack, the local news channel SVT together with Amnesty published an article heavily criticizing what they call the "sportswashing" in Saudiarabia and esports as a part of that.

"It is not the state of Saudi Arabia that is active at DreamHack. It is Qiddiya, which is a tourism project. We are comfortable with our independence from the Saudi state" says Shahin Zarrabi VP of Festivals and continues "When Qiddiya engages with us at DreamHack, it is our values that apply. They are welcoming, inclusive, and for everyone"

This year, DreamHack is focusing on attracting more female visitors, organizing a tournament for female e-sports players, and has a zero-tolerance policy against homophobia. In Saudi Arabia, homosexuality is criminalized.

Among the festival’s sponsors is the City of Stockholm, which provides 400,000 SEK in operational support to DreamHack.

Caroline Strand, Deputy CEO of the municipal Stockholm Business Region, sees no business ethics issues with the connections to Saudi Arabia. "Of course, we live in a global and complex world with many dilemmas. But we believe in dialogue and do not have any trade bans."

Another fact to note is that Sweden has had diplomatic relations with Saudi Arabia since 1957, with a Swedish embassy in the capital, Riyadh, and Saudi Arabia having an embassy in Stockholm.

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Again a reminder that this is not an expression of preference or opinion, just a data dump.

In summary, regardless of where you stand on the ownership of DreamHack, if you are pro banning collaborations or believe in the dialogue approach, please refrain from spreading false narratives which may depict the esports industry as a whole in a negative light.

Rather use the openly provided data when talking about the subject.

I am happy to provide you with more links should you require them.

Best,

A