ESGN Studios to close, staff contracts terminated

In what has proven to be a turbulent time for the emerging e-sports studio news is now filtering through that the studio is set to shut down. Recent reports had revealed that the studio had failed to pay its personnel for months, prompting a statement that they hoped to settle all outstanding debts by the end of June.

However our sources have revealed to us that whether or not this is the case the studio will be ceasing operations and has fired all its production talent. This expands to personalities such as Dan "Frodan" Chou who was seen by many as the face of the studio’s output.

It was also revealed that the studio gave no prior warning that this move was around the corner. In a move, supposedly to ensure that no equipment was taken, the studio was just locked and no-one informed. Staff turned up to the studio only to find their access denied. This has been typical of the communication barriers between upper management and staff as reported by onGamers initial report, which can be read here.

They had also recently taken the decision to cancel their upcoming $25,000 Hearthstone tournament citing a "backlog of issues" that needed resolving first.

No official statement has been passed by anyone at ESGN and it isn’t clear whether or not they will still be able to meet the promise of payment they made just a few days ago. Regardless it seems that the impact of spiralling costs amid a flawed and non-profitable business model have taken their toll and in just a little over six months the business has finally come to an end.

Expect more on this story as it develops.

Representatives from ESGN have confirmed to onGamers that the studio arm of the company will be shut down effective immediately, with approximately 20 employees let go in the process. Representatives say that the company will not be shutting down and will continue with its media and business departments, the former of which contained the studio staff. The company's top executives remain unaffected along with most of those in business operations.

The studio closing was initially reported by Esportsheaven's Richard Lewis earlier today.

The move is said to have been made due to the high costs of running the studio since the launch of the company. ESGN says this move is necessary for the company to continue on, and to come through on a promise it made over the weekend to pay back owed payments to employees and contracted players and broadcasters.

"Our biggest problem right now is to reduce costs," ESGN representatives told onGamers. "Even decreasing the overhead to make content manageable is very difficult. We've made this decision because it's just too much money to keep it going. We are committed to keeping our promise of paying back everyone by the end of June, and closing the studio makes it much easier to fix the current problem."

"We had no choice but to shut down."

ESGN says that the business end of the company, which launched with content partnerships with Europe's ESL, Korea's GomTV, and China's Gamefy, will continue, but that there is no immediate plan on how to operate either the business or media arm without the operation of the studio. ESGN says that they are unsure if more Fight Night tournament content will continue, and are discussing internally on the next steps moving forward for the company as a whole.

Yesterday ESGN cancelled their upcoming $25,000 Hearthstone Champions tournament.

ESL CEO Ralf Reichert is unclear about what the future holds for their partnership.

"Honest answer is we haven't put much thought into this," Reichert said. "First and foremost we hope that all outstanding debt to players and employees get resolved and then we will evaluate with ESGN what future model is there."