Today you’re blessed with an in-depth interview of our co founder and pillar Xavier Oswald from the french website Millenium, translated for you guys to enjoy as well.
An insight on esports and the OG org as a whole from our over qualified CRO to read while curled up safe at home. ????
“His time at Vitality, the winning model of OG, the DotA 2 and CS: GO scenes from Valve, the competitive formats and ecosystems, an amazing recipe spiced up by a pinch of cryptocurrency : a super informative interview with one of the big names in esports.
Xavier Oswald is co-owner and CRO of the OG Esports club, one of the most popular esports organizations in the world.
Searching for sponsors, merchandising development, special projects : these are the quests of the man in charge of running the machine that sports the two bulls of the Red Bull brand.
Most recently, he was in charge of launching a Counter-Strike section at OG. Another title from the Valve scene, on which its structure shines via its status as a giant of DotA 2.
Can you tell us a bit more about the path that led you to the sport, then OG thereafter?
I’ve always been a video game player.
And when I returned to France, after a long period of expatriation, I started being very interested in esports, which was a complete coincidence.
I really felt that there was something to do, that there was going to be economic growth around that filed. I found that there were very few websites that portrayed the marketing and economic aspects. So I decided to create a website where we treated this type of news in French and in English.
And at the same time, I organized monthly conferences on esports. I moderated around tables, with esports professionals and other non endemic actors. Very quickly, I did consulting for media, clubs, signs … I met – then made friends with – Nicolas Maurer who is the general manager of Vitality. He wanted us to work together, so I joined Team Vitality to take care of strategy, business development, sponsorship, fundraising…
And basically after the second fundraising, I felt that the cycle of everything I could bring to Vitality was done.
I decided to leave them, to join OG not that long after.
And why is that?
OG is the biggest structure on DotA 2. Today, we have 4 Majors and we’re the only team to have claimed two The International champions titles.
But what got me interested at the start was joining a global brand with a big fanbase all over the world, not only French.
At OG, we have 40% of our fanbase in Asia, 40% in Europe, and then 20% in the United States.
It is a very strong and powerful brand internationally, with also two co-owners who are at the base of the players: Johan “N0tail” Sundstein and Sébastien “Ceb” Debs, with whom I share not only a vision, but also the values – a little different from what can be found elsewhere – of what we can do together in an esports club.
What did this experience at Vitality give you?
Um … what has served me the most … it probably gave me a better understanding of the role of publishers in the esports ecosystem. The difference between my different professional paths which led me to work at Vitality, and who I became after having working at Vitality. It’s mostly a better understanding of power relationships, especially with publishers.
Why didn’t you try to help Vitality to cross this stage of globalization, rather than joining OG which already enjoyed this aspect?
After almost two years of collaboration, I felt like I had brought to Vitality everything I could bring. I also thought that my career, which is quite international since I worked in the United States and in South America, directed me more towards a structure with an international dimension.
And above all, it was love at first sight with Johan and Ceb. I’m someone who is … a little more “senior”, you might say, than the average person working in esports.
And meeting these two guys, I found myself fifteen, twenty years back, with this insane energy and the strength to be able to lead a project with people who are on the exact same page, 100%.
So it was an opportunity you really didn’t want to miss…
I mean I’m telling you, when I met them, it was just love at first sight. Really. Two people I wanted to work with and, for me, it was also easier since the OG brand was already super strong.
There was a rough diamond just waiting to be polished, and the idea of growing this club was super exciting.
Today, you have OG which is one of the most important esport brands in Europe, when we have done almost nothing, we are in our own funds and we still have everything to develop . And that’s super important.
Let’s talk about the business model of OG: in a french tv show broadcast by L’Equipe, you said that OG is one of the only profitable high-level esports clubs, if not the only one. Can you tell us more? Is there a magic recipe ?
There is no magic recipe. There is what OG is, and the power of OG.
Esport is global and today, when we meet partners, brands or publishers, what they see in OG, and what we show them, is our striking power on a global level.
We have fans everywhere. In Eastern and Northern Europe, in the United States – where we are very strong despite what people might think -, in South-East Asia and in China, where OG is the most famous western esports club.
We have partners who value what we can build together, since we are a brand known all over the world. That’s the first thing.
The second thing is that the way we develop, because we have our own funds, and because we have not raised tens of millions of euros, forces us to have keep our feet on the ground, and not to spend thoughtlessly, knowing that you cannot spend the money that you don’t have basically.
This explains, perhaps, that we do things a little differently. We may have a slightly slower pace of development than the others, but it suddenly gives us the means to be profitable. Which can be an exception in the sector. And then, you’ve also noticed that we are active on two games only. We are not on ten games, because, for us, it does not make too much sense to multiply the games: you lose your fans by telling them different stories. A CS: GO fan isn’t necessarily interested in DotA, or Fortnite and Clash Royale. So we also implemented a development vision that is not based solely on sponsorship.
Are there other sources of income that allow you to stand out? Like merchandising for example?
It is illusory and misleading to pretend that merchandising will make you break even. Merchandising is going to weigh up to 10 or 15% of your income, and that’s fine, but it’s not what keeps you going. What is missing in esport today are broadcasting rights, TV channels or streaming platforms. It will come, it takes a little time, but until it comes, we must remain careful in the way we’respending. Because right now, we mainly live on sponsorship.
To sum it all up: you have managed to develop thanks to sponsorships, by managing your funds, while benefiting from the notoriety boost that your victories at The International have been able to grant you …
Exactly! It also gives us the means to develop in other sectors of activity, which I cannot speak too much about.
Also, we have a huge force which is our international brand. We have a lot of local brands, abroad, who ask us to make partnerships. Unlike clubs which are national, which have the majority of their fanbase in one country, and therefore a necessarily limited market. When ours is global.
And on an esports level, what makes OG different according to you?
It’s very simple: what I often explain is that OG is an esports club. We are here to win and perform. We’re not here to do streaming, special operations, entertainment… We’re our goal, which is sport, competition. If I come back to what I told you earlier: Johan and Ceb, you have two champions who have a vision that goes beyond their simple discipline.
Ceb has stopped playing on DotA today. He became responsible for the performance of the club, and leads both the DotA team and the CS: GO team. And the way we work, which is linked to the values of OG, to the fact that we are a club owned by players and which puts everything in place so that players can perform in the best conditions, is also The difference. It’s a huge difference.
And, believe me, the players know and feel it. Our players on CS: GO have joined OG not only because OG is a wonderful brand and a successful club, but also for the environment and the people who run the club.
This “difference” aspect that works, until proven otherwise, sounds a bit like a precursor movement …
Precursor? I don’t know … It might sound a bit presumptuous. But in any case it works and it appeals to the players. That’s for sure.
So in the end… would you say thatOG and Astralis share similar aspects?
What Ceb and Johan built around OG, through DotA 2, came long before Astralis. But everyone has their methodologies.
Astralis has a method that comes from the world of sport, with a sports director who is a former Handball World champion; the methodology that Ceb and Johan put in place does not come from the world of sport at all.
It comes from an empirical approach, built with their ten years of experience as players and captains in esports.
As you said before: you are double reigning World Champions. What will be the keys to seek a third victory at TI?
As with any sporting result, I would say good cohesion. We went through a fewchanges, including the loss of Ceb.
But we got the best player in the world, Sumail; the best player in Southeast Asia, even Asia, MidOne; and one of the best European supports, Saksa.
While keeping Topson, one of the best players on the planet, and Johan who is the best captain we can have. So on paper, I would say that we truly have a Dream Team. The question is: how are they going to work together? Will they find an alchemy? And will they perform? Honestly, I have absolutely no idea. I would have loved if the Major was not canceled (postponed online because of the Covid-19 pandemic), since we would have attended our first tournament with this group. I know we are doing pretty well in training, then we’ll see for competition.
I am rather optimistic, even if in order to win a World Championship there are many aspects to take in consideration. The DotA scene is very competitive … So it’s impossible to guess how it will go, even if I absolutely trust the environment that we have set thus far.
Speaking of the loss of Ceb: he has become one of the greatest figures in French esports and internationally. What is his status and what will be his objectives now at OG?
You have to see Aleksib’s statement during the BLAST of CS: GO, which repeats “never” three times when he says that he had never met someone like Ceb before. His sporting value, coaching and understanding of competition, what he brings to his speech, is today recognized beyond borders.
Officially, what functions will he hold? What name will his position have?
He is in charge of performance within the club…
Isn’t there an official title for that?
He is the majority co-owner with Johan, he is in charge of performance and has a predominant sports role … I think you could call that: Head of performances.
Is there any involvement other than financial from the Red Bull brand in your organization? In football, they founded and made Leipzig one of the most successful clubs in Europe in a very short time …
No. Red Bull is our main partner. A very important, very loyal partner, on whom we can count for many things. They produce a lot of content. For them, we are also a main partner, both in terms of communication and in terms of results.
There is no team that brings as much today as OG to Red Bull.
That’s why they invested and chose to shoot a documentary about us, called Against the Odds. But it doesn’t go any further. There is no capital partnership on the part of Red Bull.
OG recently became the first esports club to launch its cryptocurrency, via the Socios app. Can you explain, for those who are less familiar with this type of initiative, why it is taking place and, in simple words, what will it bring to your organization?
This is a completely new and limitless way to include our fans in the life of the club. So obviously, we include them on decisions that are not critical. We’ll never do a poll to find out which hero will be picked during the TI finals, that’s for sure.
However, there are plenty of ways to involve fans in club decisions. For example, the first survey we did was to decide what the design of the in-game OG flag will be, visible during the draft and in the game.
There are many other subjects and ideas, which will allow us to interact with the fans we want to launch. OG is the only esports club to have done this, with a rather prestigious partner who counts among its clubs: Paris-Saint-Germain, AS Roma, Juve, Barcelona … And among this plethora of clubs, you will now have OG. For us, this aspect of socios pleased us. OG’s DNA is really the direct link with its fans, and that’s what makes it special.
How does this work for a potential socios user? Are there minimum amounts to be able to participate in famous decisions?
We opened our Fan Token Offering until early April. So you can buy OG tokens for $ 1. You can buy one, two, three, five, ten, a thousand… It doesn’t matter, when you have one, it gives you the right to vote. You don’t spend a token to vote. Having one gives you access to all the votes. You can also sell your tokens afterwards, like any cryptocurrency. But for us, the most important thing with a dollar token is having lots of fans who have at least one token and can interact.
That is THE most important thing.
Rather ambitious decisions overall. Like deciding to set up an international training on CS: GO, with the clear objective of having the same success as on DotA 2 …
It’s very simple: there are three major games in esports today. DotA 2, we’re there already.
League of Legends is a bit more complicated.
For us, especially Ceb and Johan who are CS: GO fans and love its scene which is hyper competitive, there was a certain natural logic to position on Counter-Strike. That’s for the sporting part.
And then, after, for the ecosystem and economic part, there was also the change and the deep evolution of the circuit with the creation and the renovation of leagues, like BLAST and the EPL. So we were on the perfect timing with: the desire to enter the scene, the opportunity – with the shuffle last September – to have a lot of players to talk to, all combined with the interest of the new leagues.
Who led the discussions with the players?
Ceb! He led negotiations and recruitments.
What were your greatest difficulties in getting set on Counter-Strike?
The biggest difficulty, which takes time, but we will say that it is not specific to CS: GO, was the discussions with players, clubs and leagues. There is also an economic dimension, since you have to budget and stick to it. We do not have unlimited money, so we also have to compose within our budget.
In short, smart recruitment …
We will see in a year whether we have been smart or not. But, in any case, we recruited according to the opportunities, what we could do. I think we have a pretty solid team, and they just need to reach their full potential. It takes time, but we are pretty confident.
Could we say that the OG success model, roughly speaking, is switchable from one discipline to another, and that the results will come from themselves?
We hope so! Everything we set on DotA, we apply it to CS: GO.
So would it be a simple copy and paste?
If you adapt it … But yes, on the methodology, the values, the way we conduct the training, how Ceb talks to the players and supervises them: it’s the exact same than what we do for DotA.
After OG’s entrence on the CS:GO scene, the team experienced a rather divisive situation, like many other clubs : choosing between engagement in the ESL Pro League or in Flashpoint. What tipped the scales toward the Pro League?
There was indeed a desire by OG to be present in one of the three major leagues tavailable: BLAST, EPL and Flashpoint. BLAST was early and made the choice, very early, to integrate us.
So we were missing one of the other two championships. We talked very early on with ESL about our potential integration into the Pro League, and then we had the opportunity to chat with Flashpoint as well.
What made the difference? That’s the pretty general consensus on the part of European clubs that it made more sense to go with ESL. Rather than Flashpoint, which is perhaps a riskier project, with a completely different vision, since it is the first esports league in the world with ownership. Which means that the founding clubs of the league own the league. Very different from what exists in esports today.
And that’s what was attractive to any club. There is also a timing question : it was necessary to decide quickly. We’re thrilled to be part of the Pro League which is one of the most competitive leagues in the world on CS: GO. What matters the most to OG is to perform in the best competitions. It’s our very essence.
What do you think, personally, of the battle of these different leagues?
I think it’s going to be complicated to have three high-level leagues worldwide on CS: GO. We will see, but I am not sure that three leagues can coexist. Mostly on an economical aspect. Because competition wise it can be very interesting, but the attention of the fans is not infinitely extendable …
Now that you’re active on the two major Valve games, could you explain why this editor seems – from an external point of view – to give much more importance to DotA 2 than to CS: GO?
I think DotA has a very important place at Valve. It’s their baby. I don’t agree when it is said that Valve is completely abandoning CS: GO, I don’t think that’s the case at all. But DotA is still getting closer to the perfect game. After, when we see what happened last fall when initiatives flourished around CS: GO (an attempt by some tournament organizers to seize a monopoly), we can not not to say that Valve let it go … They are very careful about what is happening.
Are there other scenes that you guys are interested in? Is collaborating with other popular publishers like Riot Games your intention?
Yes of course. We are very attentive to what Riot Games does. OG’s goal is to be the best club in major esports games. The fact that we are today on two Valve games is a complete coincidence.
We didn’t choseCS: GO because it’s a Valve game. We’re on two Valve games, because CS: GO and DotA are Valve games. If CS: GO was an Activision game, we would have entered CS:GO anyway.
We already met a long time ago and you told me about your curiosity about Rainbow Six, which is currently experiencing interesting changes in its esports structure. Can we imagine OG landing there in the future?
So … We could see OG enter many games. Now, our way of doing it is to mobilize all our resources on the games on which we are present. This explains why OG is not present in five, six, seven or eight games. Because today, it’s impossible to perform on all games. In any case, at OG, given the state of development of the club, it would be unreasonable. Not economically, but sportingly. And that’s not how we do it. We started on CS: GO last October, this is just the beginning of the story. We need to use all our resources to perform on it, while maintaining an exceptional level of performance on DotA 2.
So you have to understand that we have a lot of opportunities, there are a lot of people who come to see us so that we are launching on Fifa, on Rainbow Six, on this or that game. It’s just not our way of doing things today. Which doesn’t mean we’re not going to Rainbow Six. It’s just that in the short term, whatever the qualities of the scene, and it doesn’t matter the qualities of the changes that are made – for example by Ubisoft, but also Supercell who does a great job on Brawl Stars, or what that Riot Games is going to do on Valorant, there are a lot of really interesting things for a lot of games – it has to do with the way we do things. And how we approach the subjects.
When the time comes, Rainbow Six or Valorant would still be logical choices, since they are a mix between the FPS that is CS: GO and the MOBA that is DotA, on which you are already present …
Yes. Rainbow Six.. I love this game. This mix of FPS and characters who have specific roles and attributes, I find it very clever.
I love what Ubisoft does on the stage, but again: going to Rainbow Six when we just started on CS: GO, it wouldn’t be reasonable on our part. It’s a game that’s super interesting, and we’ll be opening up to other games, for sure, but we don’t want to go to 25 games… There will also be trade-offs. For example, we’re not going to go to Valorant, Rainbow Six and PUBG at the same time, you know?
Why do you think DotA 2 is having trouble finding its audience in France?
I think the game is more difficult to access than League of Legends. It IS harder. And then Valve and Riot’s strategies are completely different. Riot has done an exceptional job of structuring the local scenes. That is not the case today with Valve, which has a different philosophy.
Which will change a little, since the formula for DotA’s professional circuit will evolve next year. There will be more locally, which is very good news. Then, LoL is carried, notably in France, by influencers, by media like Solary, by O’Gaming. So today, if you’re interested in esports and MOBAs in France: between LoL and DotA, it’s an easy choice for players. Between the fact that DotA is more difficult, more complete, and that all your friends play LoL and not DotA, it necessarily makes things more complicated.
According to you, what would be the solutions for DotA 2 and its scene to become more democratic?
I think there are already a lot of things being done.
In France, there’s the FroggedTV which does many things, which organizes a professional leagues, carried out last year in partnership with the ESL. I think that the next evolution of the circuit, which will be regionalized, it will be a completely open model. And the possibility of moving from a third division to a second, and why not a European first division, still in this open circuit philosophy, can create vocations and can make the scene more dynamic.
Do you think we could have, a championship that would allow its best teams to go to international competitions afterwards?
I think it is very seriously possible to actually have a circuit – not sure about a national one, but at least an European circuit – with an amateur third division online, which would lead you to a second division and a first division. I know that it’s one of Valve’s goals. And then there would be new links that do not exist at the moment.
In an almost revolutionary way, and you perfectly exposed it, Valve announced a deep restructuring of its esports circuit and its ecosystem through the DotA Pro Circuit. What was your reaction when you learned all these new things?
Very happy. I think that the evolution of the circuit is super positive. The terms are not yet completely fixed, we are discussing a lot with Valve. But we will have the chance, in Europe, to have the highest championship in the world for our discipline, which is not the case for example in League of Legends. Having this circuit, this championship in Europe, is great news.
Looking back, don’t you see any downsides to these transformations?
No no no. Honestly, in theory, there is no downside. It’s moreabout how we’ll manage to use Valve’s choices. How will we succeed in optimizing what has been announced?
Do you think this will allow DotA 2 to reach a new level and actively compete with League of Legends which seems to affect a lot more people today?
I don’t know if that’s the goal to compete with League of Legends. Like I don’t know if that’s a goal in itself. I think, however, that it can give DotA a huge boost in Europe. And above all, allow a lot of people to be interested in it.
I find the game super fun to watch. It’s more spectacular, with more fights. More difficult to understand, but it’s a beautiful sight. And in Europe we will have the best teams with Team Secret, OG, Nigma, Team Liquid, NiP … I even think that the situation will be likely to bring other big clubs to the scene.
You took part in a very interesting debate on the models of leagues used in esports. Which do you think will be the most reliable in the long term? Overwatch’s closed franchise leagues ? The semi-closed ones like on CS: GO? Or those like Rainbow Six and DotA which remain opened and encourage revenue sharing for its best actors?
I am convinced that the open model is the best sports model, especially in terms of entertainment. This idea of an exceptional path that takes you to the top, as it exists in certain sports, for me is the best type of storytelling, the best show and the best way to engage fans.
This is also the best way to ensure that all matches are played to win, that all teams are giving their best.
Because it is clear in closed leagues, for example in the NBA, that the team that has nothing left to play in mid-season, or the 15th against the 16th, is not interesting to people.
And then the players don’t care at all.
I think the open system is the best system. Now, I understand the interest of the closed system and, ourselves, we could not in theory refuse to participate in a closed league.
he proof is that we participate in BLAST which is an almost closed league. We take part in it, and that poses no philosophical problem for us. Even if we love open systems, like on DotA where you have to fight all the way.
Through these league debates, it is above all about the survival of esports clubs …
What is certain is that it is necessary to rebalance things and give the means to the clubs to generate income beyond what exists in sponsorship.
We can no longer have clubs that pay the players, marketing, create thire content, take the risks, and participate in competitions organized by the publishers, while collecting crumbs of the value that is created.
That is no longer possible, and everyone understands this, including the publishers. This is why the developments are interesting, this is one of the subjects that are still pending and under discussion.
How do we create the best possible competition? I’m talking about Europe and the best product that can benefit clubs the most. Because that’s the idea for them today, it’s not like saying to ourselves: we get all the income and then we are super rich. That’s not the idea.
The idea is: how do we generate additional means to allow clubs to do even more things, including for our fans. There are a lot of clubs who are super frustrated because they cannot afford to produce enough content that would allow their fan to follow their favorite players.
In order to strengthen their identity ?
Yep! Believe me, we invest a lot in content. Our players play the game, we do a lot of things, and that’s why the fans love OG too. This is because they can follow everything we do on our social networks …
Let’s say that the format of the Overwatch League or the CoD League, with teams that are locally anchored in cities, is becoming popular.
How will OG and its global identity do?
On DotA, there’s going to be regional leagues. We will see if they will be online leagues or LANs.
I think this argument about the Overwatch or the CoD League, having a physical arena, is pretty laudable. The fact of generating additional income with ticketing is also very smart. We’ll see if it’s a winning bet. About the localization of OG, that’s a good question, but our strength is being a global brand. So we cannot be everywhere, we cannot have a seat in Singapore, another in Shanghai, London and New York. It is complicated.
How to decide on the origin of a structure in this case?
There are other ways to do it. We can, depending on our teams, develop more or less in a specific country or city. You can see for example that on League of Legends, many clubs have chosen Berlin because League of Legends is their main game and that suddenly makes sense to them.
But will be there thousands of people who would be ready to follow their team wherever they go? I do not know…
The Coronavirus is having a huge impact on the world today. Esports as well is seeing a multitude of its tournaments canceled or postponed, like the Major of Los Angeles in which you had to compete in. What is your feeling on this point?
Like all events, esports is affected. But the chance of esports is to be able to create a big activity online, so it will be less affected than sports for sure. But as a matter of fact, the industry remains heavily affected.”