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There will be more bad news out of Evil Geniuses

"The company is kind of desperate to figure out how to essentially liquidate the business," said one former employee.

Photo by Marv Watson/Riot Games; Illustrated elements by Sonny Ross

Hi, I’m Mikhail Klimentov. You may know me for my past video game coverage, such as my investigation into the “culture of fear” at TSM. In previous editions of ReaderGrev, I’ve written about “Starfield” and attending Valorant Champions.

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On Nov. 1, the esports organization Evil Geniuses laid off a substantial portion of its workforce — the third round of cuts in less than a year. In the days that followed, the words that former employees chose to describe the layoffs in private spoke volumes.

“Obvious.” “Inevitable.” “Cathartic.”

“This has been a long time coming,” said one former employee. “Everyone who was laid off … knows that this probably should have happened months ago.”

Former Evil Geniuses employees who spoke with ReaderGrev were granted anonymity to discuss their experiences at the company. Several pointed to non-disparagement clauses in their severance contracts, saying they feared legal action on the part of Peak6 Investments, the private investment firm that owns Evil Geniuses.

“The parent company absolutely does go after people who speak publicly with the press,” said one former employee.

Evil Geniuses is an American esports organization with a long history. Founded in 1999, the organization has fielded rosters in more than a dozen games. The brand was briefly owned by Amazon through its subsidiary, the streaming platform Twitch. Later, in 2019, it was acquired by Peak6. In August, the Evil Geniuses Valorant team won that game’s world championship event in Los Angeles, a Cinderella run that I covered here (sort of).

But the company has also been dogged by controversy in recent years, ranging from unacceptably poor performances in certain esports to messy contractual disputes with players. The team was also placed under investigation by a third-party law firm commissioned by Riot Games, the developer of “League of Legends,” after reports surfaced that the organization had neglected a player’s mental and physical health, resulting in malnutrition and mental health issues. (In an interview with Digiday, the former CEO of Evil Geniuses, Nicole LaPointe Jameson, said the organization never received a complaint from the player or his family. “I know people want an apology,” she said. “But, as of now, I have nothing to apologize for.”)

ReaderGrev contacted Evil Geniuses with a request for comment about employees’ characterizations of their time at the company, but did not receive a response.

Now, some estimates put the number of people impacted by last week’s layoffs at approximately 20. One former employee with visibility into the company's operations estimated that the number was likely higher, amounting to roughly two-thirds of the staff.

After a brief “town hall” via Google Meet on Nov. 1 — a group call with interim CEO Chris DeAppolonio and an HR employee — several employees reported immediate lockouts from their workplace accounts and software.

“I lost complete access to Slack,” lamented one former employee. “I couldn't even say goodbye to any of my coworkers.”

Former employees said they’d seen warning signs at Evil Geniuses for months.

One red flag was the closure of the company’s offices in Los Angeles and Seattle. Employees were told to work from home starting at the end of September.

Then there was the evident lack of a plan for the future. One employee became alarmed when updates on the company’s plans for 2024, shared weekly by the interim CEO on Slack, kept getting pushed back.

But perhaps most crucially, multiple former employees alluded to challenges attracting sponsors.

“We just were not successful at finding ways to monetize our business,” said one former employee.

“It was obvious to us that we were having difficulties gaining sponsorships,“ said another.

In Sept. 2022, Riot Games announced the esports organizations it had chosen to participate in its “Valorant” partnership system. The application process saw dozens of teams vying for just a handful of slots; one former employee likened the admissions rate to that of a prestigious university. When Evil Geniuses was chosen as a partnered organization, employees were elated. But that feeling faded.

“[Entry into the partnered league] should have given us a competitive edge to be able to find sponsors who are interested in getting into esports,” said one former employee. “Instead, within the first year of us getting into VCT, we lost Monster [Energy].”

Multiple employees described frustration over the organization’s struggle to attract partners and sponsors, particularly around meaningful wins and events.

“[When] you win a world championship, you should be able to then close a marquee sponsorship deal, because brands who invest [and] advertise in esports want to be affiliated with winners,” said one former employee. “There are lots of examples like this in the history of esports, where competitive success could translate to more sponsorship dollars. That never came true for us.”

That failure came with consequences. Three sources, including two former employees and a content creator who has worked with Evil Geniuses, described slashed budgets resulting in plans for content getting pared down, sometimes at the last minute.

In one notable instance, efforts to ramp up content creation around Valorant Champions — the tournament Evil Geniuses ended up winning, conferring the status of “world champion” on the team — were scuttled in the lead up to the event. Approvals for content plans were reversed, and staff was told to “only meet the minimum requirement” set by Riot Games, according to one former employee. Riot sets a content quota for teams participating in its “Valorant” esports circuit.

The result was something of a death spiral. As budgets decreased, plans for content were scrapped, leading to less brand visibility and engagement — thereby making it harder to sell prospective sponsors on Evil Geniuses.

“We were always in this position of, well, we have to build something that’s desirable for a sponsor to want to be involved with, but then — because we weren't able to close meaningful sponsorships — not having the budget to do so,” said one former employee.

It’s safe to expect more bad news out of Evil Geniuses…

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