Mentioned in this article Teams: G2 Esports, Origen

Last month, UK game retailer GAME announced its latest expansion into esports—the acquisition of SocialNAT, a Spanish esports organization dedicated to hosting online competitions and offline events. GAME’s expansion isn’t surprising, but the partnership with SocialNAT is, primarily because of a SocialNAT’s director’s criminal history, along with the company’s shady media penetration.

SocialNAT is GAME’s second purchase in esports, following on from a £20 million deal for Multiplay, an event organiser well-known for the Insomnia Gaming Festival. While the sum of the SocialNat acquisition remains undisclosed, it is reportedly less than £500,000.

Spain is GAME’s second-largest market after the UK, with more than 250 shops. With personalities like Enrique “xPeke” Cedeño Martínez, LoL veteran and owner of team Origen, and Carlos “ocelote” Rodríguez Santiago, former pro player and founder of G2 Esports, Spanish esports talent is quite formidable. The country was among the first to receive a national slot for Riot’s Challenger Series qualifier, and its passionate esports community has attracted the interest of big brands like Vodafone. Even two of the biggest national sports newspapers, Marca and Mundo Deportivo, have dedicated esports sections.

In the press release, Pablo Crespo, Managing Director of GAME Spain, stated that “GAME is firmly committed to delivering the best experiences across all areas of the interactive entertainment and videogames business.” And that “the acquisition of SocialNAT will provide GAME with both a platform and an established audience to support the growth of its international esports business, particularly in Spain, and allow the Group to offer a range of new experiences and services to its customers.”

Case closed? Well, not so much.

The case against SocialNAT

SocialNAT, while a relatively successful esports organization, has a complicated past.

In 2011, the provincial court of Vizcaya, Spain, sentenced two men to one year in prison for offering movies and music online without paying rights holders. The men had earned at least €40,000 through banner advertising by the time they were caught. It was the first prison sentence for illegal downloads in Spanish history. One of the two defendants was Oscar Flores Delgado, who—by the end of 2012—became a joint director of SocialNAT. There is no direct relation between Delgado’s delinquency and his later business with SocialNAT, but in the overall context it is worth telling.

However, there’s more. Simply put, SocialNAT’s reporting of its media penetration doesn’t line up.

According to its own statements, the SocialNAT platform has over 150,000 registered users. SocialNAT’s team was responsible for “various esports championships” at the 2015 Madrid Games Week, including the qualifying rounds of FIFA and Call of Duty for the Electronic Sports World Cup (ESWC), as well as the Counter-Strike ‘GG Cup’. Nothing particularly odd up on the surface, besides critique for a go-go dance performance at the event, in front of a partly-underage audience, the event took place without major concerns.

A closer look at the “established audience” raises questions, though. While the public has to take the amount of registered users for granted as stated by the company, an investigation of SocialNAT’s social media reach is, to some extent, achievable, with stunning results.

Between Mar. 11 and Mar. 18, 2015, SocialNAT’s Twitter account almost doubled its reach from 29,805 to 58,650, according to stats taken from Twitter Counter. Looking at the tweets from that week, SocialNAT had not taken any obvious marketing measures whatsoever. It stands to reason that a large amount of these followers actually were bought. In fact, a current Twitter Audit shows a fake account score of 60 per cent. And that’s just Twitter.

In December 2015, just two months before SocialNAT’s parent company Social Electronica Sports Company S.L. sealed the deal with GAME, traffic analysis via Similarweb shows heavy growth in total visits—against the previous trend of steady decline.

Interestingly enough, more than 40 per cent of that traffic comes from referrals with pubted.com as the top referring site, a popup adnetwork associated to harmful adware. According to Similarweb, nearly 96 per cent of the referral traffic comes from this service.

Why buy SocialNAT?

With all that in mind, one obvious question emerges: Why did GAME choose to buy SocialNAT? It is highly unlikely that GAME didn’t know who it was dealing with—the information gathered for this article is publicly available.

Moreover, several experts within the Spanish esports community, who want to remain anonymous, insist that SocialNAT has a murky reputation, and wonder why GAME decided in its favor, as opposed to other companies in the same business.

The unsatisfying answer probably lies in GAME’s new esports director, Miguel Angel Soler. Soler has a long history with the video games retailer. According to his LinkedIn profile, he’s worked multiple jobs for GAME, including Purchasing Director and Marketing Director. However, up until recently, he worked for Masa Marketing, who ran marketing for SocialNAT.

It’s almost impossible, then, to dismiss the conjunction of Soler’s return to GAME, late last year as the company’s esports director, with the purchase of SocialNAT by GAME, which happened almost immediately after.

There is, of course, no promise of failure from SocialNAT—paying for Twitter followers, while shady, hardly affects the platform’s core functions. However, buying up a company, simply because you know them better, is a bad way to run a business. We hope, for everyone’s sake, that GAME doesn’t continue SocialNAT’s poor behavior, and more importantly, didn’t use their media penetration as a metric to base their business decision on.

Esports Observer reached out to GAME to comment on this story but did not receive a response by the time the article was published.