Esports Mogul was formed in October of 2015 as an Australian proprietary company, first being referred to as an ”Australia-based esports investment company”—and later a skill-based tournament platform business that served the APAC/SEA region.
At the beginning of 2016, Esports Mogul set the course for becoming a publicly-traded company by entering into a binding agreement to be fully acquired by Australian Securities Exchange (ASX) listed Volta Mining. On Nov. 14, 2016, the acquisition was completed, Esports Mogul (now called Mogul Games Group, or MGG for short) became a publicly traded company on the ASX, and the company raised $7M AUD ($4.79M USD) towards its new business orientation. However, in all its time as an esports and gaming company, Mogul Games has not recorded any profits, despite securing several partnerships over the years and raising tens of millions of dollars.
Over the last year or so, the company said in public filings that it was pivoting again to what it called a “buy and build strategy,” with the hope that an acquisition of someone else’s business or product will help it to find success where it could not in being a content creator, esports education and coaching operation, or as a tournament platform provider. In all this time—particularly the last couple of years—retail investors’ public sentiment of Mogul Games executives and its business model ranges from non-existence to openly hostile.
Apparently, the company’s “buy and build strategy,” which was supposed to focus on acquiring a game- or esports-related business, has shifted back to the company’s original area of focus: mining and resource exploration. On May 29, the company announced that it had entered into a binding agreement to acquire lithium and rare earth exploration projects located in Canada and Australia. The company will change its name to Lithium Galaxy Limited and will appoint Iggy Tan, former managing director of Galaxy Resources Limited (Galaxy), as its new chairman of the board and hopes to raise up to AUD $4.5M ($3.08M) before costs via a public offer. The question remains: will investors be foolhardy enough to take the journey with them, given the track record of Volta Mining since 2011 and Mogul Gaming Group since 2016 and its principle architects Gernot Abl (who will be named executive director) and George Lazarou (former CFO and current non-executive director)?
The first thing to note is that it is unclear if the company—in all time it billed itself as a software company focused on running esports tournaments and a tournament platform serving the APAC region—ever actually built/owned its own software. Some former employees say that it did in fact build its own platform, but others The Esports Advocate spoke to say that it simply rebranded someone else’s technology. From its deal with U.S.-based tournament platform maker Esports Hero and later Berlin-based Challengeme Esports, to its investment/capital raise from Singapore-based gaming peripherals company Razer (and its deal to utilize Razer Arena), MGG seemed to be dependent on other platforms to operate its businesses in the region. While the company claims that its current tournament platform Mogul Arena is still operational, we know that it is mostly inactive from a consumer perspective (any mention of it was recently scrubbed from the company’s freshly revamped website), and if it is being used in SEA, that platform is a rebranded version of Razer’s tournament software.
But we’re getting ahead of ourselves here. Here is the origin story of Mogul Esports.
On Feb. 2, 2016, publicly-traded Australian mining company Volta Mining Limited (ASX:VTM) signed a binding agreement to acquire eSports Mogul for a total all-shares consideration of up to $9.5M ($6.51M) based on earnout milestones. After multiple delays, shareholders of both companies and regulatory approval was finally realized on Nov. 14, 2016. At the time the deal was finally completed, its maximum value based on potential earnouts was approximately $8M ($5.47M). However, as none of the earnout milestones were met, 200M performance shares valued at $4M ($2.74M) at the time of the acquisition expired.
One of the first things Esports Mogul did after signing that agreement to be acquired by Volta Mining was to make an investment in a company that had already built an online tournament platform: In March of 2016, it acquired a 20% stake in New York-based “real-money cash tournament” company called Esports Hero as part of a $1M USD investment round led by Esports Mogul. The platform was more of a prototype (one might even say a “concept”) at the time, according to sources we spoke to. As part of that deal, Esports Mogul signed a 10-year exclusive license to operate Esports Hero’s online esports tournament platform in 31 Asia-Pacific countries, including Australia and Singapore. That contract would not be in effect for very long (as you’ll read later) but that initial investment allowed the company to take its prototype to the next level.
Even as Volta and Mogul waited for their deal to be finalized, they prepared for the next step: to reinvent themselves as one of the only publicly-traded, pure esports entities on the Australian Securities Exchange (ASX). In October of 2016, it filed a Prospectus with the Australian Securities & Investments Commission (ASIC) outlining a capital raise and re-complying with ASX listing rules upon the completion of the acquisition. The prospectus revealed that the company would be traded under the stock sticker “ESH” and raise up to $7M ($4.79M). Additionally, Volta and Mogul laid out its business plan, which consisted of coaching programs, tournament platforms, and content creation.
On March 1, 2017, Berlin-based esports tournament platform ChallengeMe.GG developer Challengeme Esports acquired Esports Hero; in the same announcement Esports Mogul revealed that it had made a strategic investment of $4.9M in “equity investment and guaranteed marketing contribution” into Challengeme Esports GmbH, who became an “exclusive partner for the APAC region.” However, in August of the same year, Esports Mogul amended its platform license agreement with Challengeme to a non-exclusive license and removed the obligation to meet the minimum marketing commitments established as part of the strategic investment. By the end of the year, Esports Mogul stopped using the Challengeme platform and made an impairment charge of $4.43M ($3.03M) against the license fee. At that point, Esports Mogul still owned a 14.35% stake in Challengeme Esports. Eventually, in April 2018, Unikrn acquired Esports Mogul’s stake in Challengeme Esports GmbH, for a total consideration of $325K ($223K) in cash and 71,650 shares in Unikrn valued at $140K ($69K).
UK-based sports betting and gaming firm Entain would go on to acquire Unikrn (and its assets including ChallengeMe) in late October of 2021. When the acquisition plan was announced in August of 2021, the company said it would spend roughly £50M GBP ($69.18M) to seal the deal.
The reason behind Esport Mogul’s decision to stop using the ChallengeMe platform was a new deal with Singapore-based gaming peripherals maker Razer. On Aug. 2, 2017, Esports Mogul entered into a technology license and collaboration agreement with Razer through its newly established Singapore-subsidiary SEA Esports. As part of the deal, Esports Mogul licensed Razer’s platform technology Razer Arena to base the development of its new esports platform Mogul Arena on for an upfront payment of $200K USD and an annual license fee of $50K. The Mogul Arena platform was launched in mid-December 2017 and selected to be the official partner of the 2017 Vainglory World Championship in Singapore.
Following Unikrn’s buyout of ChallengeMe, Mogul was working on a new deal to raise capital from its partner Razer. In June of 2018, Razer agreed to become a significant shareholder in Esports Mogul after leading an oversubscribed placement that raised $4.41M ($3.02M) for the company.
Through its Mogul Arena platform, the company hosted several esports competitions in partnership with Razer, Mineski, ONE Esports, and other esports tournament operators. The company also worked with Walmart, Kellogg’s, and Esports Arena in 2021 as the tournament platform of record, helping the small venues within select stores in the United States run various competitions. That deal didn’t seem to last long, and it appears that Mogul’s platform was eventually replaced by U.S-based Rally Cry.
Down in a Hole
What is currently Mogul Games Group started its life as ASX-listed mining and resource exploration company Volta Mining in 2011, became an esports company through the acquisition of Esports Mogul in 2016, and is now looking to return to its roots by acquiring lithium and rare earth exploration projects in Canada and Australia as Lithium Galaxy.
The company might be hoping to dig for “white gold” as soon as possible, but the only successful digging it has done all throughout its existence is the financial hole it put itself in. Over the company’s lifespan, it issued capital worth $47.23M ($32.34M) and created reserves for options and share-based payments worth $12.16M ($8.33M) to pay for its accumulated lifetime losses of $55.95M ($38.31M).
Since the summer of 2022, Mogul Game Group has been embracing a buy and build strategy once again, led by Christopher Bergstresser, who joined the company in the summer of 2022 as CEO and managing director. Since that time the company has been talking about this new direction and claiming that it was exploring opportunities to find assets to buy for nearly a year while generating little to no revenue and paying its executives and board members in cash and shares. The end result of the company’s period as an esports entity is a total loss of more than $35M ($23.96M).
Mogul said in its Q1 2023 filing that it had $2.84M ($1.95M) in cash reserves and no debt. During Q1, it reported that $161K ($111K) was spent on staffing costs and $694K ($477K) on “administration and corporate costs related in part to the legal, financial and operational due diligence costs associated with” its “buy and build strategy” that it announced last summer. Mogul also paid $107K ($76K) to directors of the company in “fees, salaries, and superannuation” during the quarter.
Executives and board members at Mogul Games Group did not respond to multiple requests for comments.
It is important to note that Gernot Abl (and to some degree former Mogul CFO and former Volta Mining Chairman George Lazarou—currently a non-executive director at the company) heavily influenced Mogul Games Group decisions even when he wasn’t in a leadership role on paper, according to a source TEA spoke with on Monday. Abl is a former director at eSports Hero and former managing director and chairman of the board of Mogul, now serving on the board as a non-executive director.
Our source told us that Mogul’s biggest issue with finding success was directly tied to Abl’s decision-making and ongoing influence with the board and company executives. Our source claims that executives would often tell employees in meetings that “Gernot wants this” or “Gernot think is the way to go,” and the company would act on his opinion, even if it wasn’t a winning one.
Tobias Seck contributed to this article.