eSports
GameSquare Esports Inc. and Engine Gaming & Media Inc. Enter Definitive Arrangement Agreement
GameSquare Esports Inc., a vertically integrated, international digital media and entertainment company focused on gaming and esports, and Engine Gaming and Media Inc., a data-driven, gaming, media, and influencer marketing platform company, announced that they have entered into a definitive arrangement agreement (the “Arrangement”) dated December 7, 2022 to combine their businesses via an all share deal, whereby each common share of GameSquare (a “Gamesquare Share”) will be exchanged for 0.08262 Engine Gaming common shares (the “Engine Gaming Shares”).
Following the all-share transaction, former GameSquare Esports shareholders are expected to own approximately 60% of the combined entity, and current Engine Gaming shareholders are expected to own approximately 40% of the combined entity on a fully diluted basis, and it is intended that the Engine Gaming Shares will continue to trade on the Nasdaq Stock Market (the “Nasdaq”) and TSX Venture Exchange (the “TSXV”) under the symbol “GAME”. The combined entity will retain the “GameSquare” brand globally.
Justin Kenna is expected to lead the combined company as CEO and Lou Schwartz is expected to oversee the combined company’s technology platforms, as President. In addition, Jerry Jones, owner of the Dallas Cowboys, and John Goff, Chairman and Founder of Goff Capital Inc., will continue to be the largest investors of the combined entity. Representatives of the Jones Family and Goff Capital will continue to hold significant board representation of the new company.
The combined company integrates GameSquare’s award-winning content, advertiser, and influencer businesses with Engine’s market-leading data, analytics, advertising, and marketing technology platforms. The transaction creates a market-leading, end-to-end platform with reach across esports, sports, influencer, publisher, and advertising networks for brands to connect with the increasingly difficult to reach youth culture audiences. The combined company will provide global brands and advertisers with solutions that develop innovative strategies to connect to youth audiences.
“Today’s announcement is a transformative opportunity for our customers, team members, and shareholders, as we build what we believe will be one of the world’s largest and most influential gaming, esports, and media companies focused on youth culture. The merger immediately expands our scale, which we expect will help us on an accelerated path to profitability in 2023, while creating an organization with a leading platform of end-to-end media, content, and technology assets. GameSquare and Engine Gaming have highly complementary core strengths, including broad product portfolios, and passionate team members committed to the gaming and esports markets. As a combined organization, we will have an enhanced platform and expanded resources, including essential data and analytic solutions, to serve a broader base of global customers and accelerate growth. I am excited by the significant opportunities we will have as a combined company to create substantial value for our shareholders,” Justin Kenna, CEO of GameSquare, said.
“We are thrilled to announce the merger with GameSquare. Engine Gaming’s unique technology assets, including live streaming data, analytics, influencer marketing platform, and programmatic advertising solutions enhance and expand GameSquare’s capabilities in connecting brands with fans. As a full service, integrated company, we will be able to meet the needs of any brand sponsor through our SaaS revenue-based technology platforms. We believe the combined company will drive powerful growth and scale, while enabling an accelerated path to profitability,” Lou Schwartz, CEO of Engine Gaming, said.
“This merger is the successful culmination of our previously announced strategic alternatives process. We believe the merger between GameSquare and Engine provides strong potential return for shareholders, and allows Engine’s stockholders to participate in the value creation of the combined company. The transaction satisfies all the announced goals of the strategic process – greater scale, catalyzing growth, and significant cost and revenue synergies,” Tom Rogers, Executive Chairman of Engine Gaming, added.
eSports
CAPCOM’S STREET FIGHTERTM 6 GOING TO COLLEGE THIS FALL
- CSMG will create and operate College Street FighterTM Tour in North America for the 2024-25 academic year
- College conference Street Fighter 6 champions will punch their ticket to the national Collegiate Esports Commissioner’s Cup (CECC) & May Madness in 2025
eSports
R&D rethink needed for sportsbooks to harness esports’ power
Esports betting is still grappling with a perception problem amongst operators. Despite the leaps and bounds in product development made by suppliers – particularly in the last two years – esports hasn’t shaken off the image built in the late 2010s.
Our good friend, Oliver Niner, Head of Sales at PandaScore, has been kind to share the below article with us.
There’s scepticism around esports betting’s value, how well it can actually perform and what’s needed to make it appeal to bettors. A big part of that comes down to perception, which shapes the research and development (R&D) choices made by each operator.
Self-fulfilling prophecy?
Operators who have put the research and development (R&D) resources into esports are seeing excellent growth, while others are still treating it like part of a long tail. The lack of a uniform approach to esports often translates into hesitancy to be bullish and invest in esports.
Whereas in the United States, post-PASPA sports betting has exploded and operators are seeking to capture as much territory and market share as possible because in most cases, you switch the lights on and the money comes in. It’s, of course, good business sense to take opportunities like this – you can apply the same templates used elsewhere on an incredibly lucrative market.
This kind of approach has been attempted for esports and hasn’t found the same success. Granted, the legislation for betting on esports has been somewhat slower than that of sports betting and iGaming.
However, bullish operators have acknowledged the fact that esports hasn’t found the same success in regulated states and asked what can be done differently, while for others, esports has been thrown into the too-hard basket or relegated to the bargain bucket.
For the latter, the fate of the esports vertical becomes a self-fulfilling prophecy – especially if an operator already using a budget esports product that throttles its very growth.
It takes two to tango
When esports is discussed in broader betting circles, you’ll often hear different versions of the same talking point: the problem with esports is no one is doing it well, it doesn’t innovate.
This argument is a case of the pot calling the kettle black. Esports is a driver of innovation, and it is sportsbook R&D that is holding it back.
Multiple suppliers on the market are investing significant resources into R&D, and bullish operators are leveraging these product innovations to acquire new customers and create engagements made for the internet age.
There are understandable reasons why sports betting doesn’t innovate. It’s largely because operators focus on acquisition, entering new territories and spending money on data rights. But the actual R&D on sportsbook products is left lacking, with ever-increasing cost-per-acquisition (CPA) numbers a clear symptom of this.
It means that if an operator does decide to use or acquire an esports specialist supplier but does little to cater its product and attempts to just lay the sports betting template over the top, of course performance will be throttled.
It’s like putting a Ferrari engine in a Prius – no offence to Toyota or Prius owners.
The same problem exists on the platform supplier front. Platforms are understandably focused on compliance and getting customers live, not necessarily improving models or their products.
Even the idea that if you just acquire an innovative company the problem is solved or you have found the solution, doesn’t hold water. In many cases, the company is acquired and plenty of noise is made about it, but there’s little organisational investment in R&D afterwards.
It’s not just in esports
These problems extend to customer acquisition and marketing for most emerging markets, not just esports. There’s a rush to use the same old playbook in newer sectors because it’s easy.
The fantasy vs. house sector in the US is already experiencing an acquisition arms race. As analyst Dustin Gouker points out, deposit match bonuses for new users on fantasy vs house products have jumped from $100 to as high as $500 in some places.
This is the same race that played out in sports betting and despite the costs, there’s little effort from most operators to try something different. There’s less work when you just put the same acquisition template on an emerging sector and call it a day. This seems to be an accepted practice in the industry, for better or for worse.
Esports betting success requires ongoing dialogue
Rather than attempting to wedge esports into hegemonic sportsbook approaches, sportsbooks need to take a completely unique approach.
The fact is the betting sector has barely scratched the surface – communities of esports fans are still dormant. Canadian operator Rivalry has built a successful, esports-first business by embracing the ever-changing internet culture that esports inhabits. French esports organisation Karmine Corp recently sold out a 30,000-person stadium for an event with no prize money up for grabs.
Innovative products developed on the supplier side like microbetting and betbuilders are only half of the equation.
Maximising esports revenues requires institutional investment, ongoing R&D and collaboration between suppliers and operators to create products and experiences. This includes having staff on the operator side that can drive and push the product further, and crucially, rethinking current sportsbook strategies and practices.
Building experiences for betting’s greatest emerging market – one that caters to your future core audience – takes investment, innovation and a willingness to experiment. If the industry wants to make the most of the Millennial and Gen Z audience that will become its primary customers, investment into R&D and close collaboration between suppliers and operators is needed. Many hands makes light work.
eSports
North Star Network Acquires Um Dois Esportes
North Star Network has acquired Um Dois Esportes, a sports coverage and analysis site created from the merger of Gazeta Do Povo and Tribuna do Paraná in 2020.
Julien Josset, co-founder of North Star Network, said: “Thank you to the team at GRPCOM for their faith in us to take the brand forward. Um Dois Esportes is an established and renowned site in Paraná State, and we’re excited about the challenge of developing this asset.
“We’re happy to maintain the collaboration with the existing editorial team, and look forward to working with them, bringing our unique NSN approach, to take UDE forward.”
NSN’s signing of Um Dois Esportes is the media house’s fourth acquisition of 2024, following the recent deals to purchase UK-based SportsMole and MrFixitsTips, as well as Chilean site AlAireLibre, which was announced in March.
The latest addition to the North Star media portfolio joins existing assets including Top Mercato, Afrik-Foot, and Vringe. The Paris-based company already oversees a significant Brazilian operation, delivering over 6 million sessions per month, from the likes of Trivela, Premier League Brasil and Lakers Brasil.
NSN will retain Curitiba-based journalists from the Um Dois Esportes legacy team to maintain the asset’s unique tone and popular coverage of the Paraná sports scene across site and social.
Rafael Mello, Director of GRPCOM, said: “We were surprised by the interest, and initially had no intention of selling Um Dois, but as the conversations evolved, we realised this was a serious group with good intentions. We were very happy to see our project being valued by a large international group and going global, demonstrating the quality of the content we produced.
“We’re also proud that North Star inherited our journalists, who are truly responsible for the success of the product we offer readers every day.”
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