LCK, head for franchise Episode 5 – Choi Sang-In, CEO of DRX, talks about the essence of esports business
After CEO Choi Sang-In has taken over DRX Corp. 8 months ago, DRX has become one of the most influential teams in LCK. At the end of last year, DRX Corp. acquired KZ which spin-off from FEG. DRX Corp. rebranded the team name as its own brand, DRX.DRX's history as an esports team and as a company is relatively short but the dominance in LCK scene is impressive. With the three new players, DRX has gone to PO stage and is on the lead for the summer split as well thanks to the players' potentials. In addition, DRX has been trying various new social media contents, resulting in creating a big fandom in LCK within a short period of time. DRX has also partnered with Kakao and McLaren Seoul, and they joined as the new sponsors since they recognized it's potentials. What was the driving force behind that made an 8-months-old team DRX to be in the middle of the spotlight? We have met with CEO of DRX, Choi Sang-In to hear about the past 8-months journey on him and DRX players, Front office, and fans. In addition, on why Kakao decided to sponsor DRX and the team's financial aspects. CEO Choi Sang-In emphasized the essence of esports, teams, and branding throughout the interview, and we were strongly impressed by his vision in creating the current DRX.
You are in charge of being the CEO at DRX. What is your role in the team?
DRX is largely divided into players and front office staff. The players' have the goal of winning 3 consecutive LoL Worlds Championship and front office has the goal to gain global fandom. As the CEO, I try to create a good environment for everyone to be able to reach their goal and give directions to go as the leader and act on it if I have to. Ultimately, we want to increase the intrinsic value of DRX along with sales as the process of the company's growth.
You are the CEO but you are also very active in the scene. There is a rumor that you participate as 'Rex', the mascot of DRX.
Rex is not me. His identity is different from mine. Choi Sang-In and Rex work as team members with different roles. Ask Rex himself next time. He will show his dance moves instead of answering you directly.
It seems like DRX has a good team atmosphere with good match results. It must have taken a lot of effort to create this kind of atmosphere.
When we work, we always figure out what the key point is. I think a lot about the role and importance of every member. When you understand the goal and direction of the team in their own roles, I leave the details up to them. We are all pros. Even if there are no strict rules, everyone can enjoy working together because everyone understands what they have to do and strive for the best in their own places. It applies to both DRX players and the front office. Regardless of the result, I want all of us to enjoy the process, and it eventually leads to good results. That's why we are all excited. I think this kind of team culture is reflected in the team's match results so I am very thankful to them. When I first told them my thoughts, they just had big question marks and just nodded. But now they understand my thoughts and I can feel that they trust me. There is nothing more I desire as CEO than players enjoying the game sincerely. The team culture I think contributed to being able to deliver bold and confident BanPicks and play style.
We think that in order to change the team culture, the CEO has to show interest and passion to do so. It was not a long time, but within 8 months you have set up the players, front office, and even gained sponsorships. You must have had some experience in esports related experience prior.
I have worked in strategic consulting before and I have experience in working as company-wide strategic planning, M&A with large companies. I started working as Chief Product Officer at OP.GG and that started my career in esports. While working at OP.GG, I found about the possibilities of esports so I have gone through PUBG, the company that made PlayerUnknown's Battlegrounds. I then joined FEG, which operated King-Zone, as the Chief Strategy Officer. At first, I joined to support the esports field in database business but my role has gotten bigger, which led me to become the CEO of DRX.
The change from FEG's King-Zone DragonX to DRX was really cataclysmic, but it must have been difficult times
We had to start everything from scratch. I was in charge of sales in King-Zone at FEG then, I suddenly faced a situation where I had to take care of DRX myself. And that was last year November. The first thing I did was to secure things financially. Because our players and staff had to be paid and rewarded. In the process, I took a lot of financial risks but in January, I was able to secure enough investment successfully. Since then, I focused on rebranding as I wanted to reset the sponsor titles and create our own brand. I wanted to hire a general manager then, but it was hard so I did both of the roles. In the beginning, it was just 3 front staff and Deft. It was like a farm that went through a storm and a lonely alpaca was waiting for me. It was really tough back then, but we still had Deft with us, so we were able to push through to create the DRX now. Back then, Deft told me his dream was to win Worlds so I told him I will help his dream come true. Deft told me he will trust it and will stay with me. Now that I think about back then, I wonder why he trusted me. After that, I met up with head coach cvMax and he decided to join the team at the second meeting. We had a lot in common. After that, as you all know, many things happened. We had to make a team and even though I was confident, I was careful because the situation was complicated. I told honest situations to all the players I have met. It was a difficult time. However, I did not want to attract players with deceives and lies.
Without such process, DRX would not have new players like Keria, Pyosik or Doran who have been excelling this season. I think the situation suits the saying 'misfortune turns into a blessing'
I have a lot of things to talk about regarding the players. Back then, Keria was superior even compared to the best supporters in the league. I was certain. In the actual test, Keria's team won all the match. Jungle-Pyosik was cvMax's confident recommendation. He said he can make him a big-time jungler so as the CEO I willingly accepted it. It was the same for Doran. However, as for Chovy, cvMax wanted to let him go but I convinced him to persuade Chovy. I was also in a hurry. I was really happy that our mid-laner was Chovy and was happy that we can work together as a team. But to be honest, even though Deft and Chovy were top tier players since we had 3 new players, we did not have high expectations. But they showed good results even from the beginning of the spring split. At first, I even thought 'why are we winning?'. It was all possible thanks to coaching staffs, players and the front office. People from outside said the spring split result was a bit of a miss, but internally, we think we have reached the goal. So even after spring split, we gladly prepared for the summer split. We grounded teamwork through workshop before summer started. DRX is just about to start.
DRX's use of social media is also noteworthy compared to other teams. Unlike other teams that normally focus on match photos, DRX's SNS shares after-match comments from coach and players and actively open events where fans can participate. Is there a reason for being active in social media like this?
I think in order to explain what we do with our social media, I have to explain the direction we are pursuing. For existing professional esports teams, social media was a form of marketing. It was a method used to promote big sponsor companies. But DRX focused on the team’s intrinsic value, to create its own identity. In esports, there were naming sponsorship and title sponsors. From a team’s perspective, it is in a structure where it’s impossible to increase the intrinsic value and that is not what we needed. We had to establish our own brand. It is also the reason behind the DRX rebranding. It was the same reason why after I established enough funding to run King-Zone DragonX to DragonX then to DRX as the CEO, we have partnered with sponsors that can show the young, passionate, and positive energy to promote that we enjoy challenges. It is important to consider cash sponsorship, but it is also crucial to think of the essence of understanding each other’s goals and possibilities of building it together. Brand collaborating with another brand to create bigger values. And this is where the role of social media comes in. It is not simply a medium to show what the team has but to share who we are as a team and what kind of stories we’ve got to fans and communicate with them. Everything DRX delivers to fans is the essential element to give fans pride in being a fan of ‘DRX’. To feel like they belong to DRX and to get positive energy through cheering for us.
We are impressed on the part where you said you resolved the team's financial situation. In order to do all of the things mentioned, the team needed financial stability and sponsorships are done to secure them. It is the most difficult problem to solve and many teams do struggle because of it. In addition, the upcoming franchise will be one of the most important factors. Was there a way to resolve this quickly?
We figured out what the key elements were to grow our team's values and establish our vision, and to bring them together to attract investments. We shared DRX's direction, values, goals to attract investors. Thanks to that, we became a team that gets offered with investments and partnerships now. I do not say uncertain things to the partners. I, myself, had a clear vision of DRX which convinced the investors as well.
It is easy to talk about the possibilities the esports industry has, but it's also unclear what the market can offer in terms of the potential to succeed and what comes with it. How did you explain this situation
Team business has a strong perception that you only need to win to succeed, but it doesn’t work like that in reality. Business needs specific plans and goals. For example, as I mentioned earlier, there were many cases where a team with good standings still gets little responses in their social media. It's absurd. Even the really popular esports teams were not influential enough. And I think T1 was the pioneering role in this part. I learned a lot by watching T1 ‘Faker’s achievements. I was also able to get new inspiration. I am trying to find ways to continue and improve what the previous people in esports history has accomplished. Team’s victory is important but we also want to shed light on how players are working really hard towards their goals. We want to show it to people that even though for some people, LoL is a game they play to kill time yet why do our players work so hard to reach their goals and challenges. These tries need prompt and active communications with fans. We try to understand their feedbacks and sometimes humbly accept it as it is and actively apply them. We DRX is a team that tries its best to build value for the players. For example, ‘DRX Deft’ is not a pro gamer who is just good at playing LoL, but is an eight-year veteran who wants to win Worlds more than anyone else. Yet he also becomes the idol for all the ADCs as someone who takes care of teammates silently behind their backs. His story gets naturally imprinted to fans as ‘DRX Deft’ who is the team captain and alpaca, which makes them cheer for him more. The reason why Kakao and McLaren Seoul joined DRX is from having mutual understandings. As mentioned earlier, DRX is a team that gives pride to the fans. For instance, this DRX t-shirt I am wearing could have looked funny a year ago and could have been called some weird shirt with odd alphabet combinations. But now the t-shirt with the team’s initials gives pride to our fans. The process of seeing, buying, and wearing clothes becomes a sequence of experiences that deepens the culture of DRX. Just like that, we clearly present to our partners what we can achieve with our players and fans, and making it come to reality little by little. It is all thanks to our front office staff and players who have been achieving good match results. Everyone is working day and night to ensure that no regrets remaining in the process.
DRX has announced its partnership with Kakao just ahead of the franchise. Kakao has never invested or sponsored traditional sports, but how did they decide to work with DRX?
It took only a week for Kakao and DRX to make the decision to work together. When I first visited Kakao, staffs from various departments were there to ask me various questions. I presented the value, vision, and direction of DRX in a very specific way on the spot, and tried hard to explain the delicacy of our brand. I've explained as much as possible how the main sponsorship based on our own brand, which we are currently pursuing, can create greater value than the method of providing naming sponsorship like the past. I ended up saying that I would like to make a sensational work using DRX and Kakao's IP, but fortunately, everyone seemed to have taken my point positively. Now, we are jointly discussing building up brand marketing for Kakao Friends.
It's been half a year since King-Zone DragonX became DRX, and compared to the beginning, it has been a success. The team is performing well and fandom grew, along with stable sponsorships. How would you summaries the 8 months of DRX so far?
I think we still got a long way to go, even though we have sprinted till here for 8 months. I don't think other LCK teams are our competitors but rather our companions to rely on and lead each other. It is not other LCK teams that we have to compete against but global pro sports teams or awesome brands regardless of their industry. Within LCK, DRX is rated highly in many ways but our goal is still far ahead of us. DRX is still in the process of making, and we did start the first step well but I don't think we have made a big difference yet. However, I am grateful that players are enjoying playing games and in their current life in general. It is a tough process but all the members of the team are steadily performing their roles. It seems like we have laid the foundation for great growth in the future.
I want to hear your thoughts on the LCK franchise as it can be both a crisis and an opportunity
I think franchising is a very necessary thing needed for LCK and it will be a positive turning point. I anticipated the introduction of the franchise even before taking the lead for DRX and I have earnestly prepared for it since the times when I was trying to attract initial investments. A lot of things laid common between Riot's franchise vision and directions: There will inevitably be limitations if you simply aim to increase the size of the league or if esports end up becoming a big company's marketing method. However, Riot seemed like they had a specific plan to build a self-sustaining structure by increasing the value of the league itself, and I was convinced that DRX could coexist with LCK. The three essential core values for the teams to expand LCK are competition competencies, global fandom, and sufficient capital. To establish this, the league itself needs a good cycle structure as the fundament. In addition, once the franchise gets stabilized, considering the various aspects of the league and industry, and its broadcasting rights, it is expected that the overall size and value of the industry will explode.
In all of the interviews that preceded the introduction of the franchise, I asked how DRX gets investments, how you earn money, and how you gain reinvestments. We are curious about how DRX is planning on this.
Earlier this year, we raised enough investments to run the team. And in the near future, another large-scale investment is on the way, and it will make DRX one of LCK teams with the most monetary assets. Considering our current business status and future plans, we expect to be the most stable and profitable team in LCK with sufficient rewards for players within 1-2 years. From the very beginning, I thought that even though sponsorship is a big part of the team's earnings, we need another business plan to secure sustainable money flow. One of them was the merch. While rebranding the team, the idea started with 'let's make training t-shirts and uniforms that players and staff can wear comfortably'. From production to selling, we proceeded a well-planned route which ended up attracting higher sales and reactions than everyone expected. Monthly sales increased more than 120 times compared to the same period last year. The brand value of DRX has risen, and I think it is due to taking into consideration the clothes quality and details that played a significant impact. We do not plan on earning through player transfer. Rather, we have a goal to train players. We have players from first-tier to fourth-tier trainees along with 9 pro players and coaching staff. And it is just LoL we are talking about. As part of LCK, I think DRX's team mission is to provide the best treatment and environment for our players to not to go to other regions like China and US. Along that line. we are planning to create a DRX gaming house at the end of the year.
What would be DRX's direction once it joins the LCK franchise
DRX wants to be a team that is not afraid of failures and is a team that enjoys challenges. I want every individual in our team to have clear goals and challenge things passionately while enjoying the process. We always receive overwhelming attention and love from fans and through cheering for us, we want fans to get inspired as well. We will strive hard until DRX can achieve 3 World titles in a row. We will continue to move forward until the three-letter DRX can invoke pride within their hearts.
A lot of things happened in the past 8 months since DRX started. Please say a word to fans before we end the interview, as we go ahead with the challenge of franchising.
When you start your career, you get quality advises and guides from seniors but as your position gets higher, it is harder to get advises and feedbacks from others. After becoming DRX's CEO, I have rarely received advice from anyone else in the company. Fortunately, fans give me a lot of feedback through various channels and it really helps me. I first was surprised to see fans earnestly caring for DRX from our perspectives but now all I can say is they are all precious and I am grateful for them. It can be just me but I view fans as our companion that operates the team together. I think the collective intelligence of DRX is, in fact, a lot faster, smarter, and fiercer than me. I will continue to listen to fans' voices and quickly adapt without losing our motto. In fact, it is the fans that have played the biggest role in increasing the value of DRX past 8 months. Thank you very much.
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