Unsettling the Gaming & Esports segments

Gaming & esports is the fastest-growing segment in entertainment globally by a wide margin with revenue eclipsing music and film combined. In 2020, over 100 billion hours of gaming content was viewed on YouTube, a 100% increase since 2018, and more than $8 billion was invested in the gaming & esports space in 2020 alone; these numbers are staggering and  investments in these segments are projected to continue to grow.

Esports is competitive gaming with tremendous audience engagement and massive reach. Globally there are more than 200 million competitive gamers, a number that is expected to grow exponentially, and more than 2.6 billion mobile gamers according to NewZoo. The growth of modern technologies, broadcast services, faster, affordable internet, and continuous advancements has been astronomical, giving rise to famous esports players and teams. In the last few years, esports has witnessed tremendous growth, both in terms of revenue and viewership.

The growth is even expected to quadruple in the coming years, partly because these consumers are spending 39% more time on gaming & esports during lockdown induced by the COVID-19 pandemic. The increased eyeballs and engagement have resulted in more significant spending by top-tier brands trying to capture this large and growing audience. The gaming industry revenue is expected to hit $218 billion by 2023.

Esports gaming events like CS:GO, League of Legends, World of Warcraft, Overwatch, Fortnite, Rocket League, and many others have opened new revenue streams for gamers, event organizers and a gamut of companies involved in the sector. Huge audiences are watching gamers play live through online streaming services like Twitch, YouTube, Facebook and other dedicated platforms. Moreover, viewers hungry for traditional sports are crossing over to gaming as it has been one of the few options left for real-time competition during the pandemic. This has fueled audience growth and engagement and many pundits believe that these audiences will continue to grow in a post-pandemic world.

While traditional sports have been forced to postpone and even cancel events, esports was able to successfully shift to online events given the nature of video games. This has fueled growth in audiences and a shift in marketing dollars by non-gaming brands keen to reach a highly sought-after demographic that is young, lives online and on mobile, consumes snackable content and is unlikely to consume media in the same way that their parents do through linear broadcasting and radio. It’s a giant industry estimated to grow around $1.8 billion by 2022 driven by the largest audience on the planet, surpassing over 600 million participants across all platforms.

GameSquare Esports - Bridging the gap between brands and gaming and esports communities

Toronto-based GameSquare Esports, Inc is ideally placed to leverage this surge in the gaming & esports industry to achieve success. GameSquare sits firmly between global brands and an ever-growing end audience. The company aims to acquire additional assets and entities serving the esports market and, more broadly, in sports and entertainment. Gamesquare’s acquisition of Code Red, an esports talent & strategy agency, provided an initial foothold in Europe through its UK operations. Code Red represents leading on-screen talent, players, and influencers and works with leading global brands to develop influencer campaigns and esports marketing strategies.

Since going public in October of 2020, GameSquare has tripled in size. This has been driven by investor interest in the sector and the acquisition of Reciprocity, a Canadian esports organization with assets in the USA, China and Latin America. And the CEO of GameSquare, Justin Kenna says that they are just getting started on building the biggest esports org in the world. The acquisition accelerated GameSquare’s presence in the digital media business and introduced global teams, which are profitable, into the mix.

“We are focused on growing our digital media and talent agency businesses by bridging the gap between global brands and the large esports and gaming communities. North America and Europe are key geographies for GameSquare and the large presence in Asia and Latin America, through investments in esports organizations in China and Mexico City, gives us access to two of the largest and fastest growing markets,” said Justin Kenna, CEO of GameSquare Esports Inc.

GameSquare is investing in organic growth complemented by strategic M&A to acquire assets and entities that serve the large gaming & esports market and, more broadly, the sports and entertainment markets. The company focuses on global brands through its digital media group, GCN, Inc, (Gaming Community Network), and Code Red, the authentic esports agency. While organic growth is the focus, M&A is being used to accelerate growth, making expertise and risk management crucial.  

“We are mitigating risk by being extremely thorough and selective throughout our M&A diligence process. We are thoughtful about the companies that we are looking to bring into our organization; we look for great people, leading high-growth companies that are profitable,” said Justin.

The esports space has undergone incredible growth making it highly attractive for investors. “We are prudent about how we deploy capital; we won’t be considering high cash-burning assets without a path to profit, which has been an issue with most traditional esports organizations. We are building the first publicly listed, large-scale media business, focused on esports that is profitable,” added Justin.

“We feel that we are extremely well placed to deliver tremendous shareholder value,” said Justin Kenna who joined the company as CEO earlier this year and brings vast experience to GameSquare Esports. Justin was previously the CFO for FaZe Clan, the world’s leading gaming lifestyle brand and one of the most valuable esports organizations on the planet. While the growth of esports has been hitting the headlines more than ever before, GameSquare’s team has been working in the industry since 2002. The company has an exciting client roster and pipeline that includes top-tier global brands such as Bud Light, Fox Sports, Adidas, Jersey Mike’s, Alienware, US Polo Assn, GEICO, Razer, Chipotle, and more. GameSquare is truly a special esports company, given its publicly traded status, because there are only a few publicly listed esports companies globally. With a focus on organic growth, a strong presence in North America and Europe, access to the large and growing Asian and Latin American markets, a well thought-out acquisition strategy, and an experienced management team, the company is expected to grow quickly in an emerging sector which could generate huge returns for investors.

Growth Strategy

The team at GameSquare have laid out five key pillars of their growth strategy which they plan to execute through organic growth as well as complementary M&A. These pillars are 1) create compelling content, 2) own more viewers, 3) grow brand relationships, 4) develop new revenue streams, culminating in 5) growing a global esports org. The company has made great progress with significant customer announcements, well-executed M&A and a blockbuster first quarter that saw revenue grow 97% year-over-year. Impressive for a company that has been public for less than a year.

Code Red Esports

While esports may only recently be hitting the headlines, the Code Red team has been working in the industry since 2002. They have been involved in some of the most significant events of all time, such as Blizzcon, Quakecon and, the godfather of esports competitions, The International. From producing events from scratch, to sourcing and hiring talent, to writing and broadcasting shows, to conducting all manner of strategic and marketing projects – Code Red has seen and done it all in the industry. As a result, Code Red has witnessed first-hand how the industry has evolved and is uniquely positioned to shape the ever-changing esports ecosystem and landscape. They are an experienced team but remain hungry as evidenced by revenue growth that nearly doubled year-over-year.

GCN, Inc. ~ Gaming Community Network

GCN, perhaps the crown jewel among GameSquare’s assets, is dedicated to integrating gamers & esports fans across sites, communities, platforms, content creators, influencers, teams, tournaments & event operators. In 2020, GCN produced 200+ hours of live streaming tournaments attracting 80M+ viewers while managing its proprietary media network that reaches 115M+ MAUs globally and creating premium content designed to provoke and engage consumers. Launched in late 2019, GCN has already produced industry leading branded content and consumer focused programs & campaigns for many top industry and non-endemic brands alike including Asus, Razer, Prime Gaming, Fox Sports, Jersey Mike’s, Adidas, Subway, Cox Communications and GEICO.  GCN’s mantra is deep-rooted in its commitment to focused on providing strategic solutions for any endpoint, be it social, digital, linear, or live stream, to deliver on its “Gamer First” promise to both brands & consumers.

About the CEO

Justin Kenna is the CEO of GameSquare Esports. Announced as GameSquare Esports Inc’s CEO earlier this year, Justin has extensive experience in the esports industry, having been the CFO of the world’s biggest gaming brand – FaZe Clan. He was instrumental in FaZe Clan’s growth over the past three years and has taken them from eight employees to over 100, grew revenue by a multiple of 12-15 over that time, and raised $60m in debt and equity. Under his leadership, the company was ranked in the top 5 most-valuable esports companies by Forbes at over $300m and growing. Prior to FaZe Clan, he worked in various roles at Ernst & Young, Deloitte, Australia-based RAMS, Optimist Inc., and Madison over the last 17 years.

“The company has an interesting client roster and pipeline that includes top-tier global brands such as Bud Light, Fox Sports, Jersey Mike’s, GEICO, Chipotle, and more.”