EG and GGS withdraw LCS!

LCS reduces two league spots

On November 20, local time, John Needham, president of Riot Games’ e-sports business, announced through the official account of the North American League LCS that the size of the LCS will be reduced from 10 teams to 8 teams in 2024. The veteran North American e-sports team EG and the Golden State Warriors will The invested Golden Guardians will officially withdraw from the LCS.

EG ups and downs

Founded in 1997, Evil Geniuses is one of the oldest esports teams.
DOTA2 TI5 champion, 2023 Fearless Contract Global Championship champion From Quake, DotA, StarCraft to League of Legends, Fearless Contract and other mainstream e-sports projects, EG has left its mark on them.

In 2013, EG signed a contract with and officially entered the League of Legends e-sports field. At the end of that year, the EG League of Legends division decided to move to the North American League, and its European League seat was inherited by Alliance.
A year later, GoodGame Agency, the parent company of EG and Alliance, was acquired by the game live broadcast platform Twitch. At that time, Twitch was rated as the fourth largest website in terms of peak traffic on the Internet in the United States. It had just been acquired by Amazon for US$970 million. E-sports was in a stage of explosive growth.

However, due to Riot Games adding new sponsorship sales rules that prohibit companies that sponsor multiple LCS teams from also owning the brands of these LCS teams, EG and Alliance had to change their appearance. In 2015, the EG League of Legends division was renamed Winterfox and was demoted that year.
In 2016, Twitch announced the disbandment of GGA, and its e-sports teams EG and Alliance were converted into player-owned clubs. Dota2 TI5 champion ppd has been appointed CEO of EG.
In 2019, PEAK6, an investment institution from Chicago, acquired the EG club and successfully bid for an LCS league seat. EG has returned to the League of Legends e-sports ecosystem.
Under the leadership of young CEO Nicole LaPointe Jameso, EG has completed its rebranding and has once again become an e-sports force that cannot be ignored in North America.

In the 2022 Spring Split, the EG League of Legends team with North American rising star jojopyun as the core successfully won the LCS Spring Split and reached the top four at MSI. In the Fearless Contract project, EG also successfully won the 2023 Global Championship under the leadership of female coach Potter.
However, good competitive results cannot cover up the company’s operational problems.
In early 2023, some media broke the news that EG had long neglected the mental health of bot lane player Danny, which caused Danny to have a mental breakdown, withdraw from the 2022 LCS finals and World Championship, and eventually retire early. This incident triggered unanimous condemnation of EG’s management from the North American League of Legends community, and the club’s reputation plummeted.

In August of this year, Nicole LaPointe Jameso left her post as CEO of EG amid controversy.
In terms of economics, PEAK6’s early investment failed to produce reliable income returns, and EG had to start reducing expenditures. Even the Fearless Contract division, which had just won the world championship, had to face the difficult choice of either taking a significant salary cut (some media reported that it would be almost a 50% salary cut), or transferring and leaving the team.
According to Sports Business Journal, PEAK6 has been trying to sell all or part of EG’s esports assets, but has so far been unsuccessful. Industry sources say that EG may completely withdraw from the e-sports field before the end of this year.

NA downhill road

EG is not the only established esports club to leave the LCS this year.
On April 7, 2023, the North American e-sports club NRG announced the acquisition of CLG. The League of Legends e-sports team with the longest history of operation has withdrawn from the stage of history.
On September 21, Shopify Rebellion, an e-sports club owned by the Canadian e-commerce platform Shopify, announced the acquisition of TSM’s LCS seats. TSM boss Reginald, who holds seven LCS trophies, said: “I believe moving to another region will rekindle our desire to win the world championship at all costs.”
The weak competitiveness of the North American League of Legends is one of the reasons for the league’s decline. The number of players on the US server ranks at the bottom among the four major competition regions, and there is no long-term means of connecting to the Korean server and other training environments. The level of local players is relatively lagging behind, and it is difficult to achieve breakthroughs in performance.
On the other hand, with the vigorous development of game live broadcasts and e-sports events represented by League of Legends, North American e-sports teams have attracted investment from various capitals, including PEAK6, Golden State Warriors, etc. The influx of a large amount of hot money has given LCS clubs the ability to introduce a large number of foreign players with high salaries from Europe and South Korea to make up for the shortcomings of local players. However, this move ignored the link with local fans and instead became one of the reasons for the decline in the league’s attention.
Exorbitant salaries, low competitiveness, chaotic management, and constant loss of fans…The decline of the LCS in the past few years has been impossible to ignore.
According to statistics from Esports Charts, an e-sports live broadcast data agency, the peak viewership of the LCS league has dropped from 640,000 in 2017 to 270,000 in 2023. During the same period of time, Brazil’s CBLOL, as a wild card division, was able to maintain a stable peak viewership of 300,000. The overseas peak audience of the League of Legends Global Finals has hit a new high for two consecutive years, with a new record of 5.91 million this year.
Of course, the shrinkage of the LCS is not the only cause or symptom of North America’s “esports winter.” The Overwatch League, owned by Activision Blizzard, also attracted hundreds of millions of investments during the hottest period of e-sports development. After six seasons, OWL will also fade away, leaving each team with a severance package of US$6 million.

“Around 2017 to 2019, a lot of investment in the West went into e-sports-related companies. Venture investors believed that they could see a return on investment in about five years.” TEA editor-in-chief James Fudge told People’s E-Sports, “Now it’s almost Five years went by and they didn’t see a return on their investment, so a lot of the venture capital started to dry up because they realized that many of the organizations they invested in were not going to be profitable for one reason or another.”
During the 2023 League of Legends Global Finals, Riot headquarters learned of some situations and held an LCS bosses meeting. John Needham accepted an interview with Travis Gafford before the S13 finals, saying that according to the agreement, all 10 LCS teams were given the option to terminate cooperation. As a result, GGS and EG chose to withdraw from the LCS.
“GGS investor Golden State Warriors decided to focus more on its basketball business, and EG’s struggles are well known to everyone,” John Needham said, “so we terminated their cooperation agreement as quickly as possible in the past two weeks.”
Due to the sudden incident, employees of GGS and EG or players about to sign were faced with the embarrassing situation of having nowhere to go, which once again aroused the North American community’s dissatisfaction with the LCS league and club owners.
Regarding the issue of reducing league seats, John Needham said that the reason for directly terminating the cooperation agreement without looking for replacement teams this time is because of time constraints. Whether it is the eight-team league format or the further development of the league, LCS is still considering different options. .
“We are eager to outline a comprehensive, long-term global strategy for the LCS and League of Legends esports by early 2024.”