Xavier Osawld is the co-owner and CRO for OG Esports, one of the most popular esports organisations in the world. Looking for sponsors, merchandising, and special projects: these are just some of the challenges facing Oswald in his role as the driving force behind the Red-Bull-branded side.
Recently, he has been involved with the launch of OG's Counter-Strike team, another Valve title, establishing themselves as a key player in the scene thanks to their status as a giant of DotA 2.
Could you talk about what brought you to esports, and eventually OG?
I've always played video games. And when I returned to France, after living abroad for a long time, I became very interested in esports, completely by chance. I thought to myself that was a potential for economic growth in the sector. I noticed that there were very few websites that focused on the marketing and economic aspects of esports.
Therefore, I decided to create a website that covered news relating to both of these sectors in French and English. Alongside that, I organised monthly business-to-business conferences on esports. I curated and lead roundtables with esports professionals and non-endemics. I was soon consulting for media groups, teams, and brands.
During this time I met Nicholas Maurer, the CEO of Vitality, and got along well with him. He wanted us to work together, so I joined Team Vitality to work on strategy, business development, sponsorships, raising capital, joining the LEC, and so on and so forth. After raising funds for a second time, I figured that I had done all I could for Vitality. I decided to leave the organisation, and some time later I joined OG.
What was your reasoning behind that decsion?
OG is the biggest org in DotA 2. They're currently a 4-time major champion, and twice World Champions. But what first caught my interest was the chance to join a global brand with a huge fanbase from all across the world. One that wasn't locked to one region, as OG has 40% of its fans in Asia, 40% in Europe, and then 20% in the US.
It's a very strong and powerful brand internationally, with two co-owners who are also players at heart: Johan "N0tail" Sundestein and Sébastien "Ceb" Debs, with whom I not only share a vision, but also values — ones that are a bit different from most organisations — of what we can accomplish together as an esports team.
What's been the main thing that you've been able to take away from your time in Vitality?
Hmm...the most useful thing...it's probably a better understanding of the role that developers play in the esports ecosystem. The difference between the various roles I held before and after Vitality and my role within the organisation was a deeper understanding of power dynamics, in particular with developers.
Why not try to help Vitality make the jump to being a global brand instead of joining OG, who are already internationally established?
I figured that, after nearly two years of collaborating with Vitality, I had taken them as far as I could. I also thought that my somewhat international career — I've previously worked in the US and South America — pushed me more towards organisations with an international aspect to them.
I was also especially taken by Johan and Ceb. I am someone who is...let's just say a fair bit older than most people working in esports. When I met those two, I felt like I was 15, 20 years behind them. They have the energy and dedication to fully commit to leading a project with like-minded individuals.
So it was a opportunity that couldn't be missed?
I was really taken with the both of them when I met them, truly. They were two people I wanted to work with, and personally, it was made even easier by the fact that the OG brand is already very strong. OG was like a diamond in the rough that just needed to be polished, so the idea of growing the organisation was extremely exciting.
Currently, you've got OG as one of the most important esports brands in Europe, even though we've barely done anything. We're working off our own equity and we've still got a lot to do, and that what's really important.
Let's talk about OG's business model for a moment. In a program for L'equipe Esports, you stated that OG is one of the only top level orgs that is profitable, if not the only one. Could you expand on this point? Is there a secret recipe to this?
There's no secret recipe. All there is, is just OG and its own unique strengths. Esports is global and currently, when it comes to partners, brands, and developers, what they get from OG is our impact on the world stage. We have fans everywhere: in Eastern and Northern Europe, we're very strong in the US, contrary to what you might think, and we have fans in South-East Asia and in China, where OG is the biggest brand and team from the West.
Our partners respect what we can accomplish together, given that we are a brand known throughout the world. That's the first thing. As for the second, that's they way we're building ourselves up. Due to the fact that we're self-financing and haven't raised tens of millions of euros, we're able to keep our feet on the ground and not spend money carelessly, given that we can't spend money we don't have.
This might explain why we do things a bit differently. We're working at a pace that is a bit less frantic than others, but which, essentially, let's us stay profitable, something that might make us the exception in this sector. Also, you will have also noticed that we're only present in two games. We're not active in ten different games because, for us, it doesn't really make any sense to expand into other titles: it's a way of losing fans by telling them different narratives.
A CS:GO fan isn't necessarily into DotA, Fortnite, or Clash Royale. Therefore, we decided to implement a development plan that isn't solely dependant on sponsorships.
Are you using any other sources of revenue to help you stand out? Such as merchandising for example?
It would be disingenuous and misleading to believe that merchandising is going to help you break even. Merchandising balances out to be about 10-15% of your revenue, which is very good, but it isn't what keeps you in business. What we're currently lacking in esports are things such as broadcasting rights for TV channels or streaming platforms.
That will come, but will take some time, so in the meanwhile we have to stay responsible with our expenditure. That's because we essentially off of sponsorships in the current climate.
So to summarise: you managed to build up your organisation thanks to sponsorships, not spending more than necessary, all while benefiting from the boost in popularity your victories at the International brought you.
Exactly! It's also provided us with the means to develop other business sectors that I can't talk too much about. Also, we've got an enormous asset at our disposal: our international brand. There have been a lot of local and international brands contacting us to enquire about sponsoring the team.
Unlike teams that only feature one nationality and have most of their fanbase in one country and therefore operate in a limited market, ours is global.
From a purely esports standpoint, what is it that sets OG apart from other organisations?
That's very simple: I often say that OG is an esports club. We're here to compete and win. We're not here to stream, for special operations, or for entertainment... for us, our objective is the game, the competition.
If we go back to what I said earlier: in Johan and Ceb you have two champions with a singular vision that surpasses their game. Currently, Ceb has stopped playing DotA. He is now responsible for the performance of the club and splits his time between overseeing the DotA and CS:GO teams.
The method we have in place, which is tied to our values — those being that the club is owned by the players and has put everything in place for the players to be able to perform in the best conditions — that's what makes the difference as well. It's a real asset. And believe me, the players know and feel it. Our CS:GO players not only joined us because OG is a huge name and a team that gets results, but also for the environment and the personnel surrounding the club.
This difference in methodology, until shown shown otherwise, sounds a bit like a revolutionary new way of doing things...
Revolutionary? I'm not sure about that... that would be a bit presumptuous. But in any case, it works and players respond well to it. That is for sure.
Ultimately, are OG cut from the same cloth as an Astralis?
What Ceb and Johan have built around OG, within the framework of DotA 2, came long before Astralis. Besides, everyone has their own way of doing things.
Astralis have a methodology that comes from sports, with a sporting director who is a former Handball World Champion; the methodology that Ceb and Johan have put in place does not come from the world of sport at all.
It comes from an empirical approach, built from their 6 years of experience as players and captains in esports.
You mentioned it earlier: you are two-time World Champions of DotA 2. What will be the keys to a 3rd successive top-place finish at The International?
Just like any results in sports, I'd say it's dependant on strong cohesion. There have been three changes to the roster, including Ceb's retirement. But we've brought in the best player in the world, Sumail, the best player in South-East Asia, maybe even all of Asia, in Midone, and one of the best European supports, Saska. All of this whilst keeping Topson, one of the best players on the planet, and Johan, who is the best captain you can have.
So, on paper, I'd say that we have a Dream Team. The question is: how will they work together? Will they find the magic formula? And will they be able to put up results? Honestly, I have absolutely no idea. I would have loved it if the Major (ESL One Los Angeles 2020) wasn't postponed (because of the Covid-19 pandemic, the tournament will take place online), since that would have been our first tournament with this group of players.
I know that we're performing rather well in scrims, so we'll have to see how we do in competition. I'm quite optimistic, even if there are a lot of factors that go into winning a world championship, such as the quality of other teams.
The DotA scene is hyper competitive, so it's very difficult to work out how things will go, even if I'm quite confident in the framework we have in place.
Talking about Ceb's retirement: he's become one of the biggest names in French esports internationally. What's his current status and what are his goals at OG?
All you have to do is see what Aleksib said during CS:GO's BLAST event, who said "never" three times when asked if he had ever met anyone like Ceb before.
People around the world are starting to realise his sporting value, by way of his mentoring and understanding of the competition, and what he brings to the team.
Officially what is he in charge of at Vitality? What is the name of his current position?
He's in charge of performance throughout the club...
Is there no official title for that?
He's the majority co-owner with Johan. He's in charge of performance and plays a crucial role in sporting matters... I think that you could call that: Head of Performance.
Besides a financial role, how else does Red Bull feature in your organisation? In football, they founded and built Leipzig into one of the best clubs in Europe in a very short period of time...
It doesn't. Red Bull is our main partner. They're a very important and loyal partner that we can count on for variety of things. They produce an enormous amount of content. We're also a main partner for them, as much as in terms of communication as in terms of results.
No other team currently brings as much to the table as OG does for Red Bull. That's why they invested in us and decided to film a documentary about us called Against the Odds. But it doesn't go further than that. It isn't a moneymaking venture on their part.
One unique thing about OG is that it recently became the first esports organisation to launch its own cryptocurrency, through the Socios app. Could you expain in layman's terms, for those who are unfamiliar with this sort of initiative, what this will bring to your organisation?
It's a completely new and unlimited way of bringing the club to our fans. Obviously, we're not letting them have their say on crucial decisions. We'll never do a poll to decide what heroes we're going to pick during a TI final, that's for sure.
However, there are lots of ways of including fans on decisions made within the club. For example, the first poll we did was to decide on the design of OG's in-game flag, which can be seen during the draft and the game itself.
There are a lot of other projects and ideas that we want to launch that will allow us to interact with our fans. OG is only team in esports to have done this, joining a exclusive list of prestigious teams including: Paris-Saint-Germain, AS Roma, Juventus, Barcelona...
Amongst this myriad of clubs, you now have OG. We were drawn to what Socios had to offer. At OG, having a direct link with our fans is definitely part of our DNA, which is the app's speciality.
Ultimately, how will buying cryptocurrency work when it comes to the fans? Will you need a minimum amount to have your say on these notable decisions?
We made our Fan Token Offering available until the start of April, so you can purchase OG tokens for a dollar each. You can buy one, two, three, five, ten, a thousand... however much you want, as even if you have just one token, that will give you the ability to take part in a vote.
Voting in polls doesn't cost you tokens. Just having a single one of them will let you have you say in all votes. You can also go on to sell tokens, just like any other cryptocurrency.
But for us, the most important thing was to have the token launch at a dollar each, which allows a lot of fans to be able to get at least one token and be able to interact with the team. That's the most important thing.
This is all rather ambitious, just like the decision to launch a international CS:GO team with the presumed goal of achieving the same success as your DotA 2 team...
It's very simple: there are currently three main games in esports. DotA 2, which we're already involved with. League of Legends, which is franchised, so it's complicated. And then there's CS:GO.
For us, and especially Ceb and Johan, who are fans of the game and its hyper competitive scene, there's a certain natural logic to move into Counter-Strike. That's based the sporting side of things.
As for the ecosystem and economical side of things, the scene has deeply changed and evolved following the creation and improvement of leagues, such as BLAST and the EPL Pro League.
Things set up nicely with our desire to enter the scene, as we had the opportunity — following last September's shuffle — to be able to talk to a fair few players, all of which combined nicely with the interest the new leagues were bringing in.
Who led the discussions with these players?
Ceb! He led the negotiations and the recruitment.
What was the hardest thing about getting involved with Counter-Strike?
The most difficult and time-consuming thing was the discussions with players, teams, and leagues, though that isn't specific to CS:GO. There's also the financial side of things, as we had to set a budget and stick to it.
We're not working with unlimited funding, so we needed to reflect that in our budget.
So in short, recruit intelligently.
Well... we'll see in a year if we've been intelligent or not. But in any case, considering our opportunities, we made our recruitment decisions in relation to who was available to us.
I think we've got quite a solid team, all they need to do is live up to their potential as much as possiblel. That will take some time, but we're confident in them.
Could it be said that OG's trademark model for success can be, roughly speaking, transposed from one discipline to another, and that the results will come themselves?
We hope! Everything we've put in place in DotA, we've applied to CS:GO.
So it's simply a matter of copy and pasting?
Well, you have to adapt it... but yes. The methodology, the values, the way practice is conducted, how Ceb talks to and mentors the players: that's the same as in DotA.
Shortly after OG's entry into the CS:GO scene, the team faced quite a significant decision that many other organisations had to make: choosing between joining the ESL Pro League or joining Flashpoint. What tipped the balance towards the Pro Leauge?
Effectively, OG wanted to be a part of one of the three major leagues available to us, those being BLAST, EPL, and Flashpoint. BLAST had already made the decision to include us from very early on. That left us with the two other leagues.
We talked to ESL about our potential inclusion in the Pro League from a very early stage, and then we also had the chance to talk to Flashpoint. What made the difference? It was the more or less the general consensus made by European teams that it made more sense to choose EPL over Flashpoint, which is a potentially more risky project with a completely different vision, as it's the first esports league offering team ownership.
This basically means that the founding teams own the league, which is completely unlike what currently exists in esports, be it in Overwatch, Call of Duty, or League of Legends. That's what made it enticing for every team. There was also the question of scheduling and timing; we needed to decide quickly.
We're happy to be part of the Pro League, which is one of the most competitive CS:GO leagues in the world. The most important thing for us at OG is to put up good results in the best competitions. That's our identity, even.
On a personal level, what do you make of the battle between these different leagues?
I think it won't be easy having 3 high-level leagues in CS:GO. We'll see, but I'm not sure if the three leagues can coexist economically, and while it could be very interesting from competitive and spectacle standpoint, fans don't have an unlimited attention span...
Now that you're active in the two major Valve titles, can you explain why this developer — from an external point of view — seems to put a much greater emphasis on DotA 2 than CS:GO?
I think that Valve has a very special place for DotA. It's their baby. I don't agree with people who say that Valve doesn't care about CS:GO at all, I don't think that's the case one bit.
However, DotA is closer to being a perfect game [than CS]. After all, when you look at what happened last autumn when initiatives sprouted up throughout CS:GO (an attempt by certain tournament organisers to seize a monopoly), you can't say that Valve kept a hands-off approach... they are paying close attention to what's going on.
Are there any other scenes that OG are currently interested in? Is working with other popular developers, such as Riot Games, in your plans?
Yes, of course. We're well aware of what Riot Games are doing. OG's objective is to be the best team in esports' main games. The fact that we're currently active in two Valve games is a complete coincidence.
That's to say, we didn't enter into CS:GO because it's made by Valve. We have teams in two Valve games because CS:GO and DotA are Valve titles. CS:GO could have been an Activision game, we would still be involved regardless.
We previously met quite a while back and you made no secret of your interest in Rainbow Six, which is currently experiencing interesting changes to its esports structure. Could we possibly see an Rainbow Six OG team in the future?
So... you may see OG move into a lot of games. Right now, our current plan is to mobilise all our resources into the games that we're already involved with. This may explain why OG isn't active in five, six, seven, or eight games, because, currently, it's not possible to play at a high level in every game.
In any case, given the development of our organisation, that wouldn't be realistic here at OG. Not only from a financial perspective, but from a sporting one as well. And that just isn't our way of doing things at all. We launched our CS:GO division last October, that was just the start of our story. In order to put up good results in Counter-Strike, we need to put all of our resources into action, all while maintaining our excellent level of performance in DotA 2.
So now you should be aware of the fact that we have a lot of opportunities, there are a lot of people who want us to pick up a Fifa player, or a Rainbow Six team, or enter into this scene or that game. That just doesn't fit in with our current way of working, though that doesn't mean that we won't enter into Rainbow Six in the long term. It's just that in the short term, regardless of the quality of the scene and the quality of the changes that Ubisoft are implementing, it has to fit in with the way that we do things.
The same can also be said for Riot's approach to Valorant, and the great work that Supercell have done with Brawl Stars; these are interesting times for a lot of different games, and that's how we'll approach these projects — by fitting them in with the way we operate.
When the time comes, Rainbow Six or Valorant would even be the logical choice, given that they're a mix between an FPS, such as CS:GO, and a MOBA, like DotA, two genres that you're already involved with.
Yes. I love Rainbow Six. I find the mix between FPS and characters that have their own unique roles and attributes very intelligent. I love what Ubisoft have done with their scene, but once again: getting into Rainbow Six when we've only just entered CS:GO would be a lapse of judgement on our part.
It's an extremely interesting game, and we will be open to entering other games, that's for sure, but we do not want to be in 25 different titles... there's also the matter of trade-offs. For example, we're not going to be in Valorant, Raindbow Six, and PUBG all at the same time, you see?
Before touching on the main theme of interview, in your opinion, why has DotA 2 barely found an audience in France?
I think it's a harder game to get into than League of Legends. It's more difficult. And also Valve and Riot have completely different strategies. Riot have done an exceptional job in building local scenes. This isn't the case for Valve, who have a different, libertarian philosophy that lets people do and act as they please.
This approach will change a bit, as the structure of the DotA 2 Professional Circuit changes next year. There will be more local events, which is very good news. Then, there's also the fact that LoL is covered by influential figures and media groups, especially in France, where Solary and O'Gaming both cover the game.
So, currently, if you're into esports and MOBAs, there really isn't a choice between LoL and DotA in France. Between the fact that DotA might be deeper and more difficult, and that all you friends play LoL and not DotA, well that makes it even harder to build an audience.
As for yourself, what do you see as the possible solution to making DotA and its esports scene more accessible?
I think that there are a lot of things that have already been done. In France you've got FroggedTV which does a lot, including organising a professional league which was founded last year in partnership with ESL.
I think that the coming evolution of the open circuit, which will regionalise it, add relegations and the possiblity to go from the third division to the second, and maybe even the top division in Europe, may draw new players in and help shake up the scene — all while retaining the philosophy of the open circuit.
Do you think that we might have a regional league, not dissimilar to the LFL or the R6FL, that provides a way for its best teams to then attend international competitions?
I think that it is a very realistic possibility that may have a circuit — I'm not sure if would be national, but it would be European at the very least — with a third division of online amateurs that would be linked to a second and first division.
I know that this is one of Valve's objectives. And it would be a pathway that doesn't exist in League of Legends, since you can't simply go from from the LFL to the LEC.
In a somewhat revolutionary manner, which you already perfectly expressed, Valve announced a profound restructuring of its esports scene and ecosystem through the DotA Pro Circuit. What was your reaction when you heard this news in full?
I was ecstatic. I believe that the evolution of the circuit is extremely positive. Not all of the kinks have been completely worked out yet, though we're constantly talking to Valve about them.
But we'll have the chance to have the best DotA league in the world right here in Europe, which can't be said for a game like League of Legends. Potentially having this circuit, this European championship, is excellent news.
Having had more time to look at it, do you see any negatives that might stem from this transformation?
No, not at all. Honestly, on principle, there aren't any blemishes to speak of. The question is rather how we'll be able to use Valve's announcement. How will we manage to optimise what they've put forward?
Do you think that this will allow DotA 2 to overcome its boundaries and actively compete with League of Legends, which seems to be be more popular at the moment?
I'm not sure if the goal is to compete with League of Legends. I don't know if that is an objective in itself. However, I think that this may give DotA in Europe a huge shot in the arm and get a new wave of people interested in the game, I'm convinced of that.
I find the game great to watch. It's more flashy, with more fights. It may be harder to understand, but its a experience for viewers. And, in Europe, we'll have all the best teams, such as Team Secret, OG, Nigma, Team Liquid, NiP... I even think that, just like T1 picked up a DotA team recently, the situation will be a way to bring other big organisations into the scene.
You took part in a very interesting debate on the way that leagues are used in esports. In your opinion, which will be the most reliable in the long term? Closed, franchised leagues like the Overwatch League? Semi-closed leagues like in CS:GO? Or open leagues that favour revenue sharing for their best teams, like in Rainbow Six and in DotA?
I'm convinced that the open model is the best fit for esports, most notably for the viewing experience. For myself, the idea of having a pathway of excellence towards the top, just like other sports league, provides the best storytelling, the best viewing experience, and the best way to engage fans.
It's also the best way to ensure that every match is played seriously. In some closed leagues, for example the NBA, you can see that by mid-season a team can have nothing to play for, and a match between the 15th and 16th place teams won't matter to anyone. The players even know it themselves and take liberties, or even solely play for their own stats as individuals... so I believe that an open league is the best option.
Right now, I understand the interest in a closed league and we can't turn down the possibility joining one on principle. This can be seen in the fact that we're playing in BLAST, which is a partially closed league. We're taking part in it and it won't be a moral quandary for us at all, even though I love open leagues, like in DotA, where its sink or swim, where teams have to fight.
The debates on these leagues often come back to one thing: the survival of esports organisations...
We must redress the balance and provide teams the means to generate additional revenue to what they receive from sponsorships, that's for sure. Teams should no longer have to pay their players, carry out marketing, produce content, take risks, and take part in developer-run competitions, all while being barely compensated for their contributions to the scene.
That just isn't possible anymore and everyone knows it, including the developers. That's why evolutions are interesting, and to go back to your question about DotA: there are a lot of projects that are still in the works and being discussed involving it. How can we create the best competition possible? I'm talking about Europe here and producing best product that will benefit teams the most.
That's because teams aren't currently treating this as away of taking home all the profits and stuffing their pockets. That's not the point. Instead, the idea is: how can we create additional means to allow clubs to keep doing more things, including fan interaction.
There are a lot of clubs that are incredibly frustrated because they lack the means to produce enough content to allow their fans to follow the journey of their favourite players.
So it's a way of building their brand...
Yes! Believe me, we're investing a lot into producing content. Our players play the game, we do a lot of things behind the scene, and that's why our fans love OG — because they can stay up to date on everything we're doing by following our social media...
Imagine if the format of Overwatch League and the CoD League really takes off, with teams locally attached to cities. How would OG fare with its global identity?
In DotA, we are going to have regional leagues. Time will tell whether they're online or on LAN, but I don't think that makes sense at this stage. I think that the way that the Overwatch or CoD leagues operate, with a physical arena, is rather commendable, especially since it's another way to bring in revenue through ticketing. We'll have to see if their gamble pays off. And as for how OG would localise? That's a good question, but our strength lies in being an international brand, so we can't be everywhere. We can't have a base in Singapore, another Shanghai, and others in London and New York. It's complicated.
How would you determine where the organisation would be based in this instance?
There are other ways of doing it. Through our teams, we could have a greater or lesser presence in certain countries or cities. Leauge of Legends is a good example, as a lot of organisations chose Berlin (the home of the LEC) as League of Legends is their main game and therefore it makes sense for them. Besides, would there be thousands of fans waiting to support their local team? I don't know...
The Coronovirus continues to greatly impact the world at this present juncture. Esports has not be spared from this fate, with a plethora of tournaments being cancelled or postponed, such as the LA Major that you were preparing to attend. What do you make of this?
Like all event-based industries, esports has been affected. But one of the fortunate things about esports is being able to make the transition online, so it will be less affected than sport, even if the industry can certainly expect to be greatly impacted.
Translated from the French by James Whitmore.
