That was a logical parallel world to football careers, where brothers felt they had to deprioritize video games. Sunday tournaments in '97 were clearly a hobby event, with a graphics card to win from Nvidia. Why is esports different in Saudi Arabia? In Saudi, you're indoors in summer, 70% are under 35 and gamers.
Ralf, great to have you. You've shaped esports in Germany, Europe, maybe worldwide. I want to talk about your journey and the companies you built. How often do you meet people who tell you about their own esports past?
Many. I work professionally with players and team owners, and my two brothers were part of the history as players. In business, I often meet people who say 'I played ESL in 2005' or their kids are Rocket League fans asking how to join world championships. I encounter it constantly.
How did you get into gaming?
I grew up in a bubble where video games and computers were normal. Born in '74, by 1980 it wasn't completely new but not widespread. I had a ColecoVision, neighbors had a VC20. It wasn't an outlier. I had two younger brothers, and soccer was always central, so competition was natural.
A friend claims he played against one of your brothers. They were pros, you made it to Landesliga. That competitive angle is in video games too. Where does sport come from? Play becomes a game with rules, and with a competitive structure it becomes a sport. Same with video games.
That's how it happened. We started with LAN tournaments at home, Sensible Soccer on C64. Then Quake came, we formed SK Gaming in 1997. We wanted to be the best, achieved that in Germany and among the best in Europe. It was a parallel to football careers.
How did that competitive element come into your family? I think it's natural for boys to measure themselves, maybe testosterone.
Possibly. But then came the internet, we played Quake online, competed with the best in Germany and Europe. In 1997 we made SK Gaming official. We trained four hours a day. Then in 1999 an unofficial world championship: my brother was second, my mom said 'I understand, I'd watch this like I watch soccer.' That was pivotal.
From the founding of ESL in 2000, how did esports develop from 97 over 25 years?
In '97 it was a hobby, no spectator culture. No video streaming, no stadiums. We played finals with 20 people watching. At the 1999 Gothenburg event, my mom's comment made it click. So in 2000 we founded ESL with the plan to make it a spectator sport. We built platforms for stars and monetized as media.
That was a paradigm shift. In 2000, CPL Cologne had a spectator area. In 2002, the ESL Pro Series was pure spectator. Was there a model from football or Formula 1?
Mix. On structure, Champions League and Bundesliga with promotion and relegation. On presentation, we thought more like basketball and football—show and event experience. Entertainment product with sport at its core.
For context: before, LAN parties were local. You created the first nationwide league. How did you get to first marketing and monetization? Sponsors like Intel, but initially it was free.
We thought like classic sports: sponsorship core, media rights second, direct-to-consumer third. In 2004 we sold streaming rights on eBay for 20,000 euros. Then in 2010, Twitch and YouTube Live changed everything. Today media rights are lower because of free content. The core is reach. Sponsorship is good, but esports still has a monetization problem. Consumer revenues are low. Also, traditional sports get state support—stadiums, police, etc. Esports lacks that except in Saudi. I believe state support will come everywhere. The big opportunity is direct-to-consumer.
Let's go deeper. You've been non-operational for 1.5 years. How do revenue streams compare between an esports league like ESL and the DFL? Including teams and deals.
Historically teams got no revenue share until after 2015. In football, media rights are the biggest. Bundesliga media rights ~1.3 billion, ticketing 800 million. Sponsorship varies. Older sports are media rights oriented. Newer sports like esports are more sponsorship and ticketing oriented because they lack TV gatekeepers. Direct-to-consumer is the future. I don't think you should fight intermediaries; you need a hybrid model.
So direct-to-consumer in sports future. You can transfer that to the Nike story. Use platforms smartly.
What is the annual revenue of an esports league like ESL?
When I left and we sold, it was around 200 million. Now significantly more. The biggest blocks are sponsorship and services. We did both first-party (our own tournaments) and third-party (custom services for publishers). By 2020, first-party was 70%.
Is the core of the business model community?
Yes, but the core task of a sport is to present the best competition and present it to fans. That's the value proposition. Making it marketable is about that.
But going to the top. You can go back to the region, but it's really about the best players for a relevant talent. Is that so? Because I wonder from a marketability perspective, when I look at a team like Rixram FC, isn't it also about telling the coolest story around sports? That works too, but not without success. True, if they only lose, there's no story.
Exactly. So it's always the best players. Staying at the top for a moment, we could go to the third league, but at the core it's the best teams that get the most viewers. The FIFA World Cup final, Champions League final, the last matchday of the Bundesliga – it's about who is the best. That's the definition of sports.
And it only works if you have new talent coming up, not one dominating. But the key differentiator is success. There's no example besides Schalke 04 – that's a bit mean, but you get my point. There are regional outliers. How do you become a sports fan? I read a study: 70% are given by their parents. There's a generational thing. But I've rarely seen sports that are truly successful without having the best players. That's my first thesis.
Second, that alone is not enough. Just having the best players doesn't make a viewer product. You need an educated base that follows the game, or the event must be so relevant that you watch even if you don't understand. Like the FIFA World Cup – many watch without knowing football. What sports has that almost nothing else has is real-time relevance. Sports is only as good as the moment you are in. The live moment – when a world champion is crowned, the 100m sprint – that's a synchronous moment, one of the few synchronic moments in society. The shared event experience is unique.
Third, the cultural level. You can be a football world champion for 100 years. That's for the history books. The same is happening in esports: tournaments like IEM Cologne have been around for 10–20 years, making history. Olympics is at the top, regionally it's about your club rising. There's a cultural component related to region and history. But in the end, it's about who are the best players, who wins the game.
Let's stick with football. There's been an innovation with Kings League, Baller League, Icon League. In my view, it's not about the best players anymore, but the most entertaining. Will that still be relevant in 10 years?
