In fact, there were early signs of the collapse of the RNG business empire. During the "Triple Crown" period, RNG had no achievements in business development, and now the decline in performance and constant negative news have made it more and more difficult for the team to cooperate with the business, and now only the brand itself and the gradually exhausted feelings are left as support.
Text: Huang Jingyuan
From the perspective of industrial capital, the e-sports market has shown great investment potential due to its huge fan base and strong spending power of young consumer groups. However, the reality is that despite the huge market potential, there are not many esports clubs that can achieve stable profits, and the profit model of the entire esports industry is still relatively simple. In addition, esports games are updated at an extremely fast rate, which undoubtedly increases the risk of esports club investment.
Recently, an interview with RNG's new CEO, Benjamin Lee, sparked a lot of attention on social media. On April 11, "RNG team CEO revealed that he owed tens of millions of dollars and was about to go bankrupt" appeared on Weibo hot search, and in a recent interview with the outside world, Li Jieming said, "The team has tens of millions of holes and various defaults, and there are millions of operating expenses every month."
The report pointed out that RNG, which once had the most fans and the highest reputation in China, has now fallen into a serious financial crisis, with an amount of arrears as high as tens of millions, and even facing bankruptcy, and creditors come to collect debts from time to time, which undoubtedly sounded the alarm for the e-sports industry.
It can be found that behind this phenomenon, as the heat of the e-sports market gradually cools down, the entire market begins to become rational. The gradual withdrawal of old capital and the entry of new capital indicate that the e-sports industry has completed its process of updating and iterating. In this process, the operation of the club often needs to rely on the financial support of the investor to sustain it. However, the question of how to achieve sustainable profitability has always been a huge challenge for clubs.
01
From "Triple Crown" to "God of Contracts", RNG has hit rock bottom
Recently, in an interview with the media, the CEO of RNG Club, Benjamin Lee, revealed the serious financial difficulties that the club is currently facing. According to him, the RNG club has hit the bottom and may even be on the verge of bankruptcy. In addition, he mentioned that the club has a funding gap of tens of millions and needs to bear millions of operating expenses every month.
When it comes to the club's financial situation, Lee is frank that RNG currently has only one sponsor, which makes the club's funding source extremely strained. For many years, RNG has failed to achieve positive profitability and has relied on external blood transfusions to maintain operations. This is not uncommon in the esports industry, but it is quite rare for an RNG to be unable to sustain itself for a long time.
As for why he fell into such a situation, Li Jieming also gave some explanations. He said that although the esports industry is growing rapidly, it is also extremely competitive. In order to remain competitive, RNG has had to invest a lot of money in terms of players' salaries, training, and competitions. However, these investments often struggle to pay off in a short period of time, leading to the club's financial woes.
Looking back at the development of the RNG team, this legendary team in the esports world has already written an immortal legend in the history of MSI events with its brilliant record. They lifted the trophy three times, and each time they won the championship became a classic moment that esports fans talked about, earning the team the reputation of "Triple Crown".
However, behind the glory, the RNG team has also been pushed to the forefront many times due to contract disputes. Although some voices jokingly call them "the gods of contracts", the entanglement between RNG and its players has indeed attracted a lot of attention. These issues are not only about the salary and bonuses of the players, but also about the length of their contracts and transfer rights. These disputes not only damage the rights and interests of the players, but also have a great impact on the image and reputation of the RNG team.
In February 2023, former PUBG project division player shuaishuai and others publicly demanded salaries, pushing the issue of RNG's non-payment of bonuses to the center of public opinion. This incident has once again sparked public concern about the issue of RNG team contracts. In addition to the constant disputes with its players, Yao Jincheng, the boss behind RNG, is also facing a lot of trouble. As the actual controller of Shangrao Leyou Network Technology Co., Ltd., Yao Jincheng holds up to 62.81% of the shares, and he is also the son of Yao Guilu, a well-known entrepreneur in Shangrao City, Jiangxi Province. However, he was recently exposed as the person subject to execution due to a private lending dispute case, and the execution target was as high as 18.45 million yuan. This incident undoubtedly made the fate of the RNG team even more twisty.
As an esports giant covering multiple game projects, the status and influence of RNG teams in the industry should not be underestimated. However, as contract disputes and boss Yao Jincheng's troubles continue to come to light, the future of the RNG team is full of uncertainty. Despite the RNG team's stellar past tournaments, their internal issues and contract disputes have been a stumbling block in their path.
In addition to the financial issues, Li also revealed other challenges that RNG is currently facing. He said that the esports industry is undergoing a transformation, and traditional business models and monetization methods are being challenged. To adapt to this change, RNG needs to constantly adapt its strategy and operations. However, this process is also fraught with uncertainty and risk.
02
RNG attempts to be a game version of "Oriental Selection"
Talking about how the club can "save itself" in time, Li Jieming pointed out that the selection of the East has had a profound impact on RNG and inspired the club's future strategic development direction. From the perspective of games, the club plans to bring goods through live broadcasts and other forms, and strive to achieve the goal of creating "Oriental Selection" in the game field within half a year. In order to achieve this goal, the club will actively explore a variety of ways to save itself, including issuing cards, issuing NFTs, filming short dramas, and live streaming. These measures aim to enhance the club's brand influence and market competitiveness, and lay a solid foundation for the club's long-term development.
Benjamin Lee expressed his vision to give fans specific rights through innovative ways such as issuing cards and NFTs. This practice aims to create a connection where fans who buy cards or NFTs can have the right to know and participate on some level. His goal is to involve fans more deeply in the club's day-to-day operations and decision-making process, resulting in a closer and more interactive relationship. However, this proposal has been questioned and opposed by many fans.
While the commercial success of esports is largely dependent on traffic and attention, RNG clubs have recently faced multiple challenges such as declining gaming popularity, legal action, and declining performance. This situation is difficult to reverse, and short-term emergency measures alone cannot compensate for the serious problems faced by RNG.
In addition, the domestic e-sports industry experienced its first revenue decline in 2022, with a total annual revenue of 144.5 billion yuan, a decrease of about 14% from the previous year. This trend has aroused a lot of public concern about the future development of the esports industry. After an in-depth analysis, we found that gaming revenue accounts for more than 81% of the total revenue of the esports industry, which is undoubtedly the dominant force and main source of revenue for the esports industry. However, despite the importance of gaming in the esports industry, it is the core links such as events and clubs that are the foundation of the esports industry.
The current development situation of the club is as Ye Jingbo, CEO of JD Xingyu E-sports, said to the sports business: "Referring to the model of traditional sports clubs, the head e-sports club can get considerable sponsorship opportunities. However, sponsorship revenue alone often struggles to sustain the operating expenses of the club as a whole. For example, we also have to bear the cost of the main stadium in addition to the cost of the players, and in order to increase the source of profit, each club is actively developing the To C (consumer-facing) business, including club merchandise and online derivatives, etc., these areas have huge market potential. In addition, many clubs are supported by the resources of their parent and parent groups, which brings convenience and blessings to the commercialization of clubs. "The lack of the right monetization channels and the uncertainty inherent in esports, as well as relying too heavily on sponsors, have always been issues that plague esports clubs.
03
Behind the brilliant results, RNG has narrowed the road
Esports clubs play an indispensable role in the esports industry chain to connect players, events, fans and business partners, forming an important link in the esports industry chain. It can be said that traffic is always generated around core elements such as esports clubs, events, and star players. The personal stories of star players and the well-known IPs derived from them are inseparable from the strong support and endorsement of e-sports clubs and various competitions.
Despite the current vigorous development of the domestic e-sports industry, e-sports clubs are generally facing the dilemma of "loss". This is mainly due to the extremely fast pace of esports games, which significantly increases the investment risk of esports clubs. In addition, esports clubs are subject to high operating costs, including player compensation, venue rental, and equipment depreciation. The combination of these factors has led to a relatively homogeneous profit model in the esports industry, with a limited number of esports clubs that can achieve profitability.
Using RNG as an example, we can see the subtle relationship between a top team's business operations and competitive performance. In the past glory days, RNG has attracted the attention of many brands with its excellent results and huge fan base, and has received a large number of endorsement cooperation. These business collaborations not only brought rich financial support to the team, but also enhanced the team's popularity and influence to a certain extent. However, the premise of these commercial partnerships is that the teams must maintain excellent performances, and if the results drop, the attractiveness of the commercial partnership will also be diminished.
This season, RNG's competitive results are not ideal, ranking only in the bottom four. This is undoubtedly a heavy blow to a once glamorous esports club. Not only does a drop in performance make it difficult for teams to work together, but it can also lead to the loss of fans, further exacerbating the team's woes. Against this backdrop, RNG's financial situation has also become more severe, and it is likely that only the brand itself and the gradually depleted sentiments will be left as support.
Regarding how to make profits for e-sports clubs, Ye Jingbo once said frankly: "It can be said that the profitability of e-sports clubs is diverse, and it is also closely related to their own business models and platform genes. At present, the main source of profit of JDG Club is currently mainly focused on sponsorship income, and as the club's performance and IP image continue to mature, more and more categories and brands have begun to pay attention to JDG Club, which has created more business opportunities for us. ”
In recent years, the capital operation behind domestic e-sports clubs has undergone several changes. Some companies that have fallen into losses due to poor management have had to choose to sell a controlling stake in the club, and the takeover is often by institutions with strong capital strength. Currently, RNG is under heavy pressure from salary bargaining, debt collection, and competition performance, and its situation is precarious. However, the success of e-sports does not only depend on capital investment, but also requires a comprehensive commercialization strategy and industrial ecological layout. RNG failed to fully achieve both of these at its peak, and it is clear that relying solely on sponsorship support is unsustainable.
Note: The pictures used in this article are from the Internet