Esports media agency Rfrsh Entertainment is relatively new to the competitive gaming space. But despite being founded in late 2016, the agency has already established itself through its work with Counter-Strike teams Astralis, Heroic, Godsent, and Norse (not to be confused with North).
Rfrsh provides support for these pro teams, from arranging sessions with sports psychologists, physiotherapists and nutritionists to marketing, sponsorship sales, and video content.
While the agency’s work has been debated for its potential conflicts of interest, it is evident that Rfrsh’s unique approach to the esports industry has been a large factor in its success.
To find out more about how Rfrsh came to be, the scope of its work with Counter-Strike teams, and the agency’s future tournament plans, I interviewed CEO and co-founder Nikolaj Nyholm.
The origins of Rfrsh
Rfrsh Entertainment is backed by venture capital firm Sunstone Capital, which Nyholm told me he joined in 2010. His very first investment after coming on board with Sunstone was not in a company, but rather an individual by the name of Markus “Notch” Persson—the creator of Minecraft.
“I had never been within the gaming industry,” Nyholm told me. “I was extremely interested in looking at the investments there, seeing the opportunities. But my partnership didn’t really see the fun in the game. [To them] it was ugly, there was no onboarding, it was a very weird and awkward game, it had been written in Java, it was being distributed on the web. Everything seemed wrong about it.”
Nyholm went on to become an advisor to the company that would become Mojang, which was later famously purchased by Microsoft for $2.5 billion. During that time Nyholm witnessed the effects of Minecraft on what was then an emerging audience; an audience who didn’t play the game themselves, but watched videos of others playing it.
“At that point I really realized that this was about entertainment. I think that’s when I finally was convinced esports was an interesting field to invest in,” Nyholm said.
Nyholm has described his investment in Astralis as further heightening his interest in the space. The relationship between Astralis and Rfrsh can be confusing, due in part to the overlap of both organizations’ founders. Astralis was co-founded by Jakob Lund Kristensen (who also is the founder of esports team Copenhagen Wolves) and Frederik Byskov in January 2016. The two had approached Nyholm in 2015 to seek funding for the team. They received this funding via investments from Sunstone.
Nyholm and Kristensen went on to co-found Rfrsh in the late summer of 2016. The agency then partnered with Astralis, Heroic, Godsent, and a team that eventually became Norse (not to be confused with North).
“That’s really the genesis of it,” Nyholm said. “Of course, there’s been a lot of confusion specifically with regards to Astralis because I was originally an investor and then suddenly I was also involved in Astralis in one capacity or another.”
Rfrsh’s relationship with the teams
Nyholm confirmed that Rfrsh does not currently have an ownership stake in any of the CS:GO teams it works with, with Astralis being an exception. Obviously, Kristensen also has ownership in the two organizations.
“I have a very indirect relationship with [Astralis],” Nyholm explained. “I still have the Sunstone venture fund. It works like any venture fund … I’m no longer a general partner at Sunstone, but I do have a very tiny ownership in that fund. So I have an indirect interest there.”
For Heroic, Godsent, and Norse, there is no ownership stake. However, Nyholm does not rule out the possibility of acquiring ownership stakes at a later date.
“What we’ve also stated pretty clearly is that we certainly see that as an option…in a development phase it might make sense for us to take ownership. But that really has to do more with our ability to invest larger amounts of money into teams and team development that the teams would not be able to do on their own. And in that case, we want to see some sort of financial return for that directive,” he said.
Nyholm describes Rfrsh’s relationship with the teams more as “a client that we provide services to.”
Rfrsh prioritizes the sports performance of the players, treating them as professional athletes. From providing services such as that of the famed sports psychologist to physiotherapy, physical training, nutrition, and sleep pattern analysis, the agency approaches player performance seriously.
“Each of [these optimizations] might be small, but if they work and they work together then they can give an enormous boost,” Nyholm said. To him, these help to legitimize the players and in turn benefit Rfrsh.
“The industry has not quite caught up with hype and the finances which have been flowing in. Many of the players have never been through the same type of elite programs that athletes in other sports have been, despite being professional now and earning good salaries and amazing prize money.
“I think that is first and foremost the thing that we do and focus on. Unless they do that and they recognize that they’re pro athletes, that they have to live like pro athletes, that this is not just a hobby where they’re making money, then they’re not receptive for everything else that we can bring to the table.”
Beyond the pro-athlete preparation, Rfrsh also has staff in sales, editorial and marketing. The organization currently employs 12 full-time staff.
“From a commercial perspective, there’s a lot of value in having scale. On the content side, there’s value in having scale. And we can see what works video-wise for one team, which we start to introduce to the other teams as well,” Nyholm said.
Conflicts of interest
While a single organization associating with multiple teams in an esport is by no means new, Rfrsh’s model is peculiar in that the teams all exist as separate entities competing directly against one another.
The agency has set up practice areas and player lounges for all the teams and helps to facilitate scrim sessions. According to Nyholm, the scheduled format helps the players to adopt a stable daily rhythm and keep work and relaxation better separated.
And while the teams share select resources, some services are exclusive to each to prevent possible conflicts of interest.
“Each team has their own staff,” he explained, referring to the teams’ managers and coaches. “For sensitive positions, for example the sports psychologist, she won’t work across multiple teams. She will only focus on Astralis. Anything where you’re closely in touch with the actual game or the performance in-game. But for example, the physiotherapist is one who works across the teams. The nutritionist is somebody who works across the teams because there’s nothing game-related there. There’s nothing about intimidating opponents there. All these things which are really part of the core game. That’s where we draw the line.”
Looking to North America and China
Presently, Rfrsh’s portfolio of teams is based in Europe and in close physical proximity to one another. However, the agency is not ruling out the possibility of expanding its reach to other countries–China in particular.
“We certainly both see North America and Asia as interesting prospects. We think that a lot is going to start happening from this summer on in China. And we certainly have a keen eye on that. Whether we will do that directly or with partners looking to learn from what we’ve been doing, that’s not quite clear yet.”
Rfrsh’s attention on China is particularly interesting, given the region’s lack of representation in the upper echelons of competitive CS:GO. It is also unsurprising, as local distributor Perfect World only reached an agreement with Valve to launch localized matchmaking servers for the region in July 2016.
Then there’s the language and cultural barrier to consider.
“I think it’s difficult to do anything in China without a partner,” Nyholm admitted. “We’re trying to identify who that might be. I think it’s also a different business system, but I also think we’re going to see esports develop a little bit different there than we have in the Western hemisphere.”
“Right now we’re really just talking to a lot of people who have been involved in the esports scene. People who are involved in the Counter-Strike scene. Everybody from the Tyloo guys to Perfect World.”
Launching new CS:GO tournaments
In addition to its work with CS:GO teams, Rfrsh is also in discussions to launch a new series of tournaments. Nyholm made it clear that these events would only come to fruition if they bring something new to the scene.
“We have to do something which really makes a big different and a positive difference for everybody. From the fans to the players, to the teams, to the commercial partners who come in.
“We’re not going to step into this if we don’t believe that we can make a real difference. Then we’ll let it be to the existing tournament organizers and operators to do their stuff. So we’re keenly exploring it but don’t have anything quite yet in the books. We’re hoping to be able to settle on things by this fall. But again, only if we feel that we really can make a difference. We don’t want to just flood the market with yet another product.”
He notes that the efforts may have been “misunderstood” as an attempt to undermine other organizations’ leagues.
“We certainly are not trying to grab land,” Nyholm said in response to these allegations. “But we do believe that we can help expand the market by creating a better product. And that’s also a better product, even financially, for the [organizations]. But it could be an option.”
The overarching goal of advancing the esports industry is one that he mentions frequently; he reiterates it again when he cites the effects of Astralis’ player-owned organization model.
“I think that has had a positive effect on the entire industry, not just on Astralis. I think that it’s had an effect where we’re starting to see more long-term stability with players.”