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Artist Kjartan Lauritzen and his brother “Teddy” brought celebrities like Arif and Alexander Kristoff into the esports wave, but 777 Esport has struggled in the sponsorship market.
Norwegian esports company 777 Esport is still losing money despite “big problems” in 2022.
The most recent annual accounts show revenue of NOK 953,887 last year, down slightly from NOK 1.03 million in 2022.
The company’s pre-tax profit was negative NOK 2.96 million. Compared with the previous year, the company lost NOK 4.67 million, but the loss is still smaller.
– Club manager Sebastian Fabio Mathiesen told E24 that to a large extent the negative results were due to what happened in the sponsorship market.
Their pre-tax profits have been negative every year since their inception in 2020.
– The sponsorship market is pretty dry right now, and compared to traditional sports, esports clubs don’t have a fixed ticket revenue because most games are broadcast for free twitchtwitchTwitch is an Amazon-owned live streaming platform focused on video games. ”, Mattison said.
Celebrities in the team
777 Esport was founded in 2020 during the coronavirus pandemic by artist Per Áki Sigurdsson Kvikne, better known as Kjartan Lauritzen, and his DJ brother Theodor.
Per is a member of the board of directors and holds approximately 7.8% of the company’s shares through his wholly owned Kjartan Lauritzen AS, while Theodor (also known as “Teddy”) is the managing director. The duo is known, among other things, for the NRK series “6899 til eg dør” The brothers bought a hotel in their hometown Balestrand.
From the beginning, several big names in the music industry were involved, including artists Stig Brenner and Arif.
It is understood that in November 2022, 777 Esport conducted crowdfunding through the Folkeinvest platform and finally raised 4.9 million Norwegian kroner. Financial Vision.
Among the 400 new investors were football player Fredrik Aursnes and professional cyclist Alexander Kristoff, who had to enter with 50,000 Norwegian kroner.
In March of the same year, the company raised NOK 3.5 million in funding in a private placement from investment group Aftermath, which owns about 30 percent of the company, according to the shareholder register.
– Investor reaction has been nothing but positive. Mathieson said most people entering the ownership space understand that esports today is a high-risk investment.
– Some were in their 30s and 40s and it was great to see that the club was betting on a game like CS and many had played it before. All in all, they were engaged and we got a lot of understanding.
Norway Investment
777 Esport reportedly competes in the game Counter-Strike, where they have won the Norwegian Championship four times since 2020 Club websiteThe club also organizes its own eSports tournaments.
One of the biggest sources of revenue for esports clubs is sponsorship deals. However, 777 Esport faces challenges in attracting international sponsors, Mathieson explained.
– Other players invest more internationally, with foreign teams and English content. “We are not competing in the same market as them,” the club manager said.
Mathieson said 777 Esport’s bet on an all-Norwegian team made it difficult to get sponsors from abroad.
– As an all-Norwegian team, it’s difficult for us to achieve big success internationally in a country where esports is still a niche. This is a pity, because a lot of money is currently spent on it, he says.
Still, he sees potential for long-term growth in Norwegian esports and the club will continue to bet on all-Norwegians.
cut costs
777 Esport has four employees in 2023, with wage costs of NOK 2.7 million, down from NOK 4.22 million in 2022.
The company has managed to cut costs from NOK 5.7 million in 2022 to NOK 3.94 million in 2023.
Mathieson explained that the club continues to scale back its activities to save money.
– After a period of emissions and rapid growth, we will now slow down a bit. We have to see how the market develops, says Mathiesen.
He explained that the club would cut back on expensive projects that did not provide quick revenue.
– We will focus on profitable long-term investments. “One of the projects we are continuing is the Bergen Games, which we have organized for two years in a row,” said the club manager.
Bergen Games is a Counter-Strike tournament that hosts concerts for fans and participants.
Industry headwinds
Esports has seen a huge surge in popularity during the coronavirus pandemic, with many “regular” sporting events cancelled.
The wind direction has changed in recent years, and the 2022 Los Angeles Times Investors and other sponsors are no longer willing to bet on esports clubs.
Chapter 777 E-sports itself said in a case Virginia In January, I said that the industry is in a difficult situation now.
Theodor Kvikne, general manager of the esports club, told VG that as things stand, it is not financially sustainable to run a professional esports team in Norway.
– You can probably run an esports club without losing money. But then you have no ambitions,” Kvikne told VG.
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