CNN
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In the heart of the Saudi Arabian capital, a major turning point is coming for esports, causing both excitement and concern across the industry.
The Esports World Cup (EWC), which began on July 3rd, brought together professional gamers, publishers, and fans from around the world for an eight-week long gaming competition festival.
The record-breaking prize pool of more than $60 million has attracted attention, and Ralf Reichert, CEO of the Esports World Cup Foundation, which organizes the event, told CNN Sport that the event will bring the industry together.
“The question is, what is missing in sports? To make this on par with the biggest traditional sporting events and something that brings the entire industry together,” Reichert said.
“There are some great tournaments, leagues, clubs and a fantastic view. [in esports]But what is the one thing that holds it all together?
“That’s what we [the EWC]We designed it and we presented it.”
But while the tournament has been a source of excitement for the esports world, its holding has reignited existing concerns about the industry’s ties with Saudi Arabia.
The EWC is Saudi Arabia’s latest foray into esports, following last year’s Gamers8 event, which boasted a total prize pool of $45 million.
This year’s tournament will feature some of the world’s best organizations, including T1, FlyQuest, Gen.G Esports, Fnatic and G2 Esports, competing across 21 esports titles.
The best performing club across the various titles will be crowned the ultimate EWC champion.
The eye-popping prize money is split into various categories, including player prizes and overall performance prizes.
The EWC comes after a difficult period for the industry, which has seen mass layoffs. Earlier this year, games developer and publisher Riot Games laid off 11% of its workforce.
According to The New York Times, esports leagues are struggling to make money, sponsors have cut advertising budgets, and many teams are now operating at a loss.
However, the EWC now offers over 20 major brands, including Adidas and KitKat, the opportunity to forge new and lucrative partnerships with esports teams through the tournament.
In June, CNN’s parent company Warner Bros. Discovery and the Esports World Cup Foundation agreed to a new partnership that will include Eurosport, CNN and other WBD platforms.
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The tournament hopes to unify the industry after a tough period.
But Reichert says the EWC wasn’t created to reinvigorate a declining industry, and tournaments like it have been crucial for organisations to thrive, regardless of the state of the esports community.
“So even if there wasn’t an overall economic downturn, we would still be doing the same thing,” he said.
“We believe this competition will bring the industry together. [clubs] Right in the middle of it.”
Reichert is excited about the launch of the EWC Club Programme through the Esports World Cup Foundation, which aims to “foster sustainable planning” by offering 28 clubs around the world “annual six-figure payments”.
It is hoped that it will provide a platform for the organisation to grow and maximise participation in the annual tournament.
Sam Matthews, founder and CEO of esports giant Fnatic, said the program will give the company the opportunity to expand into different game titles, such as Street Fighter, which will help the esports community as a whole.
“A lot of that money is going to be put into new geographies, new games, new audiences, new players. It’s really going into the ecosystem itself,” he told CNN Sport.
“It’s very exciting to get involved in new games and compete against other teams.”
While the EWC is expected to bring excitement and stability to the industry, it is also a divisive topic.
Many are concerned about the tournament’s ties to Saudi Arabia, which has been accused of “sportswashing” – the concept of countries using high-profile sporting events to promote a positive image of their country around the world, often to deflect attention from alleged wrongdoing.
Reichert said the EWC Foundation, which officially runs the event, is a nonprofit but is partly funded by the Saudi Arabian government, in the same way that host countries invest in major sporting events. Some funding also comes from sponsors.
However, Reichert also said there are no plans to move the EWC out of Saudi Arabia in the near future.
“This country, [esports] “It’s something that nobody has done at the moment on a scale that’s great for the sport,” he added. “It’s honestly everything we’ve ever dreamed of.”
“We wouldn’t rule out moving out of Saudi Arabia, but our plan is definitely to stay in Saudi Arabia for the foreseeable future and build it as a hub.”
Saudi Arabia’s Crown Prince Mohammed bin Salman, who helped launch the EWC, has previously said he was “not concerned” about his country’s investment being described as sportswashing.
“If sportswashing increases GDP by one percent, I’m going to continue sportswashing,” MBS said in a Fox News interview that aired in 2023.
Mohamed Saad/Anadolu/Getty Images
Saudi Arabia wants to become a global hub for esports.
Concerns about the country’s human rights record, particularly around freedom of speech and the treatment of minorities, are widespread in the esports world, leading some in the industry to refuse to take part in the EWC.
The Gulf state is looking to diversify its economy and move away from reliance on fossil fuels and already has a major footprint in the arena of sports betting.
The Saudi Arabian government-controlled Public Investment Fund (PIF) recently acquired the industry’s largest player, Savvy Gaming Group (SGG).
SGG has since acquired ESL, a leading organizer of esports events, and FACEIT, a leading digital platform, continuing its goal of making Saudi Arabia a global gaming hub.
According to Rod Breslau, an esports industry expert and journalist, the most troubling thing isn’t just the establishment of the EWC, but Saudi Arabia’s increasing control over the industry as a whole.
“It’s just what happens next, the next domino that falls,” he told CNN Sport.
“If this was really a privately owned company that was very successful in esports gaming in Saudi Arabia, I wouldn’t be so bothered.
“But it’s their government and this is their whole effort. All of this is being used just to change public opinion.”
Human rights groups are also concerned about Saudi Arabia’s continued investment in esports.
“Saudi Arabia is investing billions of dollars in esports, a thriving sector of online interaction, while cracking down on all forms of critical online expression with harsh prison sentences and even the death penalty,” Dana Ahmed, Middle East researcher at Amnesty International, said in a statement to CNN.
“We must not forget the brave voices who have been imprisoned and punished for their online expression, such as fitness instructor Manahel Al Otaibi, who was jailed for 11 years for advocating for women’s rights online. Esports participants and fans should see behind the scenes and be aware of the policing of online expression in Saudi Arabia.”
Nick McGeehan, co-executive director of nonprofit human rights group FairSquare, shared similar concerns, saying in a statement to CNN that investing in esports would allow Saudi Arabia to tell a story that targets a younger demographic.
“What they don’t want the world to see or talk about are the murders of journalists, the crackdown on women’s rights activists, life sentences for tweets expressing mild criticism of the authorities, or the grossly unfair trials and death sentences handed down to those who challenge Mohammed bin Salman’s dictatorial rule,” he added.
CNN has reached out to PIF for comment but has not yet heard back.
The criticism has caused some esports organisations to back down and fans to express their disdain on social media.
Leading esports organization Team Liquid released a lengthy video on social media explaining their reasons for taking part in the tournament and stating that they would support any team members who were unsure about taking part.
Team Liquid co-CEO Steve Arhancet also wrote a message to fans on X (formerly Twitter), further explaining the decision.
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“My fellow leaders at TL and I have spoken to Saudi women and queer people and consulted with experts from multiple NGOs, including Amnesty International and Out Leadership,” he wrote.
“While there is still much to learn, a recurring theme from these experiences has shaped my thinking: progress lies in engagement, not isolation.”
“As a gay man, I understand the pain of being rejected, but as a US citizen, I know my struggles pale in comparison to those faced daily by LGBT people in Saudi Arabia,” he added, adding that he would use the EWC to continue speaking out about the issue.
Breslau said Team Liquid players are allowed to wear Pride jerseys while competing, and will do so.
Matthews acknowledges that some are disappointed with Fnatic’s decision to compete in this year’s EWC, but says he has seen enough “positive sentiment” from Saudi Arabia that he sees them moving in the right direction.
“At the end of the day, sport is unifying, it’s entertainment. Don’t we want a world that values unity over division? We need a world where there’s entertainment even in times of anger and division.”
“From my experience, [Saudi Arabia] These are people who love gaming to the top. So I don’t think this is artificial. They really love esports and gaming.”
It’s a view shared by Reichert, who says he is closely involved in discussions around the Saudi issue.
“There are certain views about Saudi Arabia in different countries around the world, some of which are true, some of which, and many of which are not true,” he said, when asked to respond to criticism of the EWC.
“It’s probably unprecedented that Saudi Arabia is progressing so rapidly. Saudi Arabia’s intention to grow and open up is actually happening on the ground, and only time will tell the rest.”
It remains to be seen how successful this year’s EWC will be, but the event and Saudi Arabia’s involvement in the industry is likely to grow.
Those opposed to state involvement are in a tough position, with the community far from reaching a common agreement.