Chris Louey, Esports Advisor, for NGame Esports talks about private equity activity in esports and the potential value it brings.
Gaming peripherals maker SteelSeries has been acquired by private equity firm, Axcel. The investment by Axcel is part of a $2.2B fund. Private equity firms usually hold companies 4 – 6 years on average. Do you think this will be a similar situation or will Axcel stay on for much longer?
It is hard to say what an investment or private equity firm will do over the next few years. Private equity firms tend to manage risk and maximize profits of their assets over a relatively long period. It appears that over the next few years, Axcel will do just that with SteelSeries. SteelSeries was with another private equity firm, L Catterton, before being sold to Axcel.
Do you think private equity involvement is good for esports?
Private equity has a role to play in esports, especially during this period of growth. Firms can infuse funds to speed up the industry’s development and help manage companies in the right direction. Esports is relatively new, but business is as old as time. The right private equity firm could lead a company to prominence as we see with SteelSeries as a leader in gaming technology. Private equity firms will not always make the right decisions, but there is a space where firms can foster the industry’s development.