Isle of Man esports organisation X7 Esports have today announced they are shutting down operations.
They will be withdrawing from the the Northern League of Legends Championship (NLC), the EMEA Regional League for teams in the UK, Ireland, Malta and Nordic countries, after talks with potential investors broke down.
X7 were founded in December 2020 and made history as the first professional esports organisation from the Isle of Man. They went on to win the NLC Spring 2022 playoffs and finished runner-up in the NLC Summer 2022 playoffs.
X7 also reached the quarter finals of the EU Masters in Spring and Summer, and had a host of top talent on their books over the year, from Kasing to Viking, Attila and more. X7 also brought Korean players Tempt and Haru to the NLC, as well as Chasy, and went on to receive substantial buyout fees for Haru and Chasy, who later went to Vitality and Mad Lions respectively, in the higher-tier NLC. X7 also ranked well in team ranking lists, often appearing above bigger/more established orgs.
X7 also made several substantial buyouts of other UK orgs, including Bulldog, Absolved and London Esports. Esports News UK understands these brands may return if their owners choose to, while the X7 branding will remain with X7 founder and CEO Josh ‘Hyrav’ Kingett.
X7’s buyout of Bulldog was never actually completed, so the org and their branding have technically always belonged to the original owner, Newts. It was Absolved who were paid to be acquired by X7, while Newts of Bulldog and Alfie of London Esports became staff at X7.
The news comes days after Cowana Gaming shut down operations, as well as UK orgs Rix and Lucent (separate article on Lucent to follow, with comment from their team), as esports organisations face tough times ahead. It also comes after other teams departed the NLC and after the NLC was downgraded to a non-accredited league.
Things are still up in the air in terms of the full list of teams who will be participating in 2023, but several reports and speculations are painting a picture which looks like Nativz, Verdant, Ruddy (who acquired a spot from MNM Gaming), Domino and others will be involved. We’re expecting full confirmation and a separate report on this in due course.
X7 founder and CEO Josh ‘Hyrav’ Kingett, who self-funded X7 with six figures, will remain as esports executive for Digital Isle of Man, but X7 operations are closing.
Josh cited ‘a series of unforeseen global circumstances’ for X7’s closure, including inflation, interest rate rises, Russia’s war on Ukraine, the cost of living crisis and crashes in the crypto market, which scuppered talks with potential investors in X7. You can see his full statement below.
‘I’m heartbroken but don’t regret any of the time, resources, tears or effort I put into this project’
Full statement from X7 Esports founder and CEO Josh ‘Hyrav’ Kingett
“To all X7 followers and friends, I am writing this piece today to share an important update on the status of X7 Esports as a start-up, brand, and community.
The short version is that unfortunately we no longer see a viable route forward for X7 as a business. As a result, we will be winding down the company over the coming weeks.
I would like to take this moment to reflect on everything our incredible staff and players have achieved since our foundation, and to be transparent with you all about how we got here.
Having noticed a steady demand for imported talent in both the LEC/LCS, our goal with X7 and its League of Legends project was providing a platform to foster world-class players from East Asia, and to help integrate them into Western teams.
Both LCK/LPL are insanely competitive environments for professional players, and our goal has been to represent an opportunity for ambitious individuals to break into starting rosters.
Our platform included the provision of English lessons to strengthen communication skills; assistance with visa applications and insurance; state-of-the-art accommodation, leisure, and training facilities; and ensuring our players had a dedicated member of the X7 coaching staff to keep them company. We achieved demonstrable success with this business model, and are proud to have worked with and transferred Kang ‘Haru’ Min-seung to Team Vitality and Kim ‘Chasy’ Dong-hyeon to Mad Lions in the LEC.
Our intent throughout 2022 has been to raise capital and continue our growth in 2023, however X7 – like many other businesses, was hit with a series of unforeseen global circumstances this year. Our planned seed investment raise in January 2022 and again our re-attempt in April a few months later were derailed by a sweeping combination of record-high inflation and back-to-back interest rate increases; the S&P500 dropping by almost 10%; Russia declaring war on Ukraine; the cost-of-living skyrocketing; and several crashes in the crypto market including Luna in May, and more recently, FTX.
Investors whom I can say we were very close to finalising a deal with, instead chose to wait until the dust had settled amidst the new economic crisis. Given the circumstances, this was perfectly reasonable on their part despite the frustration with capital now unforthcoming.
Despite this adversity, our staff and players from top to bottom managed to pull through this year with some excellent results – finishing first and second place in the Northern League of Legends Championship (NLC), qualifying for the quarter finals of the European Masters tournament in both Spring and Summer split, and securing ourselves as one of the strongest UK League of Legends teams, outside of the LEC.
Related article: When X7 Esports stunned reigning EU Masters champions Karmine Corp in a 28-minute stomp
It is a track record of which I am incredibly proud, and that pride extends to each individual who was a part of our success. Through last week we had been in the final stages of negotiation from promising investment leads that were considering our expansion proposal for 2023. Our ambitions included business development initiatives; entering a new esports title; tripling-down on brand growth and content creation; and further diversification of our revenue streams. Some of these investment leads had already put offers on the table for us to consider.
However, due to the recent changes made by Riot Games for European Regional Leagues (ERLs) for 2023, in collaboration with our regional TO, Freaks 4U Gaming, it was announced the NLC will be downgraded to non-accredited status, which includes heavy budget cuts.
“The knock-on effect [of the NLC downgrade] has a profound impact on our projected revenue moving forwards, devalues the assets we hold and puts a stop to the business model we implemented to provide sustainability for the company. As a result our remaining investment conversations have run dry and our runway cannot extend further.”
Josh ‘Hyrav’ Kingett, X7 Esports
Those who had previously made us an offer to consider, have justifiably decided not to proceed to signing a deal, due to a combination of contributing factors I listed previously.
Our players and staff who have been, or were, with X7 throughout this rollercoaster journey will know how appreciative I am of their unwavering support, cooperation and understanding. All remaining funds which the company holds will be proportionally distributed between its creditors in the coming weeks, and for all our current staff we will assist however we can in a transition to their next endeavours, be that provision of recommendations, company work portfolio, or other means.
As for me personally, I am heartbroken but don’t regret any of the time, resources, tears or effort I put into this project. X7 was fueled by passion, and I embraced every up and down. What I’ve learnt and the relationships I’ve built during this chapter of my life will be with me forever. Ultimately I can only hold my hands up and bear the responsibility for not achieving our raise. Whilst timing may not have been ideal, a different approach or strategy might have achieved the growth that could have made X7 an easier ‘yes’ for investment partners. I will be writing a separate, more detailed thought-piece in the coming days, illustrating the X7 journey and learnings in full since inception, and a list of personal thank you’s that would be far too exhaustive for today’s statement.
If you have ever tweeted about X7, supported our posts, cheered us on in Twitch chat, or participated in the X7 community in any way, please know that you are the reason we fought for so long. You are the reason that made this journey worth it. Thank you.”
Dom is an award-winning writer and finalist of the Esports Journalist of the Year 2023 award. He graduated from Bournemouth University with a 2:1 degree in Multi-Media Journalism in 2007.
As a long-time gamer having first picked up the NES controller in the late ’80s, he has written for a range of publications including GamesTM, Nintendo Official Magazine, industry publication MCV and others. He worked as head of content for the British Esports Federation up until February 2021, when he stepped back to work full-time on Esports News UK and offer esports consultancy and freelance services. Note: Dom still produces the British Esports newsletter on a freelance basis, so our coverage of British Esports is always kept simple – usually just covering the occasional press release – because of this conflict of interest.
