GameSquare is Making Moves to Become the Dallas Cowboys of Esports – IPO Edge
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GameSquare is Making Moves to Become the Dallas Cowboys of Esports
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GameSquare is Making Moves to Become the Dallas Cowboys of Esports

  • GameSquare (Nasdaq: GAME) has become a leading full-service eSports and gaming agency
  • Services range from game development to competitions to influencer marketing
  • Recently acquired Faze Clan, which owns many teams and is gaming’s most recognizable name
  • Hired Ninja, gaming’s most popular streamer, as Chief Innovation Officer
  • Board includes Tom Walker, CFO of Dallas Cowboys, world’s most valuable sports team
  • Jones Family Office and Goff Family are two largest shareholders
  • Services include creation of brand-linked game experiences for blue chip companies like Coca-Cola Co. and McDonald’s Corp.
  • Also provides SaaS services to 8 of top 10 gaming publishers including Microsoft Corp.’s Activision Blizzard, Tencent Holdings
  • Expects over $100 million of revenue in 2024 and to become cash-flow positive in near term
  • Valuation of just 0.5 times 2024 sales is sharply below comps such as WPP plc 

By John Jannarone and Jarrett Banks

GameSquare (Nasdaq: GAME), financially and strategically-backed by Dallas Cowboys owner Jerry Jones, is doubling down on the power of gaming and youth culture.

The gaming industry will generate an estimated $211 billion in revenue in 2025, with mobile gaming at $116 billion, according to Ernst & Young. GameSquare aims to revolutionize the way brands and game publishers connect with hard-to-reach Gen Z, Gen Alpha, and Millennial audiences.

The platform provides marketing and creative services, data and analytics solutions, and amplifies awareness through competitive gaming group FaZe Clan, previously valued at over $1 billion, and acquired last year for $14 million in an all-stock transaction.

GameSquare’s talent roster is pivotal in maintaining and growing the brand’s personality and market presence. Similar to Dak Prescott of the Cowboys, Tyler Blevins, better known as Ninja, is the most recognizable name in the industry with over 19 million followers on Twitch, an interactive live-streaming service. As GameSquare’s Chief Innovation Officer, he represents the brand to tell the story to the world.

Tyler Blevins, better known as Ninja

GameSquare envisions continuous innovation and technological advancement driving the esports sector. AI technology is already playing a crucial role in enhancing live streaming analytics, game development, player performance and fan experience.

How does GameSquare make money? Starting with recently-acquired FaZe, which owns several teams who play various games, it’s best to think of it as any sports club. Just like the Dallas Cowboys, FaZe has players who are widely followed and compete in high-profile games.

For instance, FaZe participated in the 100th IEM in Dallas, where teams competed for $250,000 in prizes in a tournament in the highly-popular game Counter-Strike. In addition to prize winnings, the players wear sponsored jerseys and fans can buy gear to show support for their favorite teams.

What’s more, FaZe has forged partnerships with some of the world’s biggest sports brands. The Nike x FaZe LeBron NXXT Gen was the top selling basketball shoe in the world in March 2023, with a whopping 70,000 units sold.

FaZe’s reach goes far beyond sports apparel. Fans of FaZe literally gobbled up The Totino’s x FaZe Buffalo Chicken Pizza Rolls, which were the top selling co-banded product Totino’s has seen in 10 years.

A second big source of revenue is GameSquare’s full-service creative agency. In essence, the company partners with brands that want to reach a young gaming audience and offers everything from content creation to influencer marketing.

Fortnite, for instance, is a game that allows creators to develop their own “worlds” that can be tied directly to consumer brands. The idea is akin to creating content in the metaverse, where players can see and virtually interact with anything from sodas to rollercoasters.

Coca-Cola Co. and Six Flags Entertainment Corp. wanted to create an experience that built off a real-life experience they were hosting, so they partnered with GameSquare to create a game that allowed fans to explore and speed along roller coaster rails. There’s also a McDonald’s world, which GameSquare helped make, called WcDonald’s and aimed at anime enthusiasts.

GameSquare even assisted MasterCard as it advanced a sustainability initiative. The company created a speedrun game that planted trees as players progressed, helping to replenish a forest.

As part of its agency services, GameSquare can recruit influencers to attract viewers and players. The best example is Ninja, who commands a huge audience and mainly just plays, rather than competes in, games. An influencer like Ninja has incredible power to bring attention to any game he’s promoting. Some clients want specific parts of the offering and others want the whole breadth – from development to influencer marketing.

GameSquare also helps the world’s biggest video game makers. It provides SaaS solutions to partners including 8 of the top 10 video game publishers, such as Microsoft Corp.’s Activision Blizzard and Tencent Holdings.

As part of the partnership with investor Jerry Jones, GameSquare is the creative agency of record for the Dallas Cowboys. Last year, they launched Dallas Cowboys Game Time, which is an interactive experience within Fortnite.

The Cowboys relationship goes much further. The Cowboys, widely considered the world’s most valuable sports franchise at nearly $10 billion, have proven their ability to create value from the team’s popularity. The board of directors includes Tom Walker, who is CFO of both the Cowboys and the Jones Family Office.

GameSquare also has the right mix of leaders at the helm. Lou Schwartz, Chairman and President, is a seasoned tech and digital media executive who helped pioneer internet video management and over-the-top video delivery. CEO Justin Kenna was previously CFO of FaZe, giving him perfect experience to lead the newly-formed business.

All these efforts add up to some impressive numbers. GameSquare expects $100 million in revenue this year, up from just $11 million in 2021. The company also expects to swing to positive cash flow in the next few quarters, making it a standout growth business.

And yet, the shares aren’t getting the love they deserve. At current levels, GameSquare trades at an enterprise value of just 0.5 times 2024 sales, low given its financial profile and strategic partners. (WPP plc, by contrast, isn’t growing but trades at 1 time 2024 consensus sales, according to Sentieo, an AI-enabled research platform).

With an array of growth engines, white-shoe backing and a reasonable valuation, GameSquare is positioned to flourish. Savvy investors will take aim while the opportunity lasts.


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