Two years ago, GameSquare Esports Inc (CSE:GSQ) (FRA:29Q1) CEO Justin Kenna sat among a sold-out crowd of 23,771 people at Arthur Ashe stadium, not to see Rodger Federer or Serena Williams, but to watch a 16-year-old esports player known as “Bugha” vanquish his rivals to win the Fortnite World Cup and a cool $3 million.
Kenna, then the CFO of the major esports organization FaZe Clan, had flown to New York with a slew of esports players and staff to witness the event and run a pop-up merch store In Manhattan. Kids camped outside the store and a line wrapped around for blocks. It was iPhone drop day meets Beatlemania, and Kenna left the tournament certain that esports was here to stay, he told Proactive in a recent interview.
Flash forward and GameSquare Esports, with Kenna at the helm, is helping bridge the gap between the esports community and brands that want in on the action. The Toronto-based company partners with gaming-specific data analytics platforms to better understand the gaming audiences that brands are trying to reach.
READ: GameSquare Esports subsidiary Code Red scores US Polo Assn contract
That’s not always easy. The market is fragmented — the casual Fortnite fan is not the same person who closely tracks the professional Call of Duty circuit, for example — and traditional agencies often don’t have expertise in the space.
GameSquare groups audiences into three buckets: the core, the crew and the crowd.
“The crowd is somebody who might pick up a controller to play a game with their son. It might be a middle-aged mom who plays a half-hour of Candy Crush a day,” Kenna said in a recent interview with Seeking Alpha. “They don't align with being a gamer, but they are actually still gaming.”
“The crew are your casual gamers, they might be consuming a little bit of content through Twitch, they're probably playing Call of Duty. They know what Fortnite is, but they're not playing all the time,” he said. “And then you have the core. The core are your gamers, and this is a really big audience. They’re consuming so much gaming content through Twitch, they're playing, they're engaging. And they're a part of this community. So where our agency [an LA-based subsidiary called GCN] really focuses on is the core and the crew.”
GameSquare makes that happen by tailoring strategies to individual brands, producing original content and creating esports tournaments and events. The company is partnered with 75 web property partners that reach more than 115 million unique eyeballs per month, specifically in the esports sector.
So where is the money to be made? There is overlap with conventional sports, Kenna says, in that there are jersey sponsorships and the naming rights to facilities or stadiums, but esports offers more room for monetization by integrating brands with organizations, teams, professional gamers or even YouTube and Twitch streamers.
Imagine, for example, if the NBA also created and owned the sport of basketball. That’s essentially the case with the creators of Call of Duty, Overwatch, Rocket League and other popular esports.
“It’s more powerful than in traditional sports, as the LA Lakers don't have the ability to monetize Lebron James' personal endorsements,” Kenna told Proactive via email. “A number of the biggest gaming brands monetize the brand, the specific teams and also the individuals in and out of the games.”
GameSquare also owns Code Red Esports Limited, an esports talent agency based in the UK and founded in 2002, which might as well be a lifetime ago in the gaming industry. Code Red represents on-screen talent, players and influencers and works with brands to develop influencer campaigns and esports marketing strategies.
“Code Red has been involved in some of the most significant esports events of all time, such as BlizzCon, QuakeCon and the godfather of major esports competitions, The International,” Kenna added. “From producing events from scratch to sourcing and hiring talent, to writing and broadcasting shows, to conducting all manners of strategy and marketing projects .... Code Red has witnessed first-hand how the industry has evolved and is uniquely positioned to forecast how esports will continue to change.”
Justin Kenna with skateboarding legend Tony Hawk, whom GameSquare brought on as a strategic advisor
As deep in the industry as Kenna is now, a few short years ago he was the director of finance at Madison + Vine, a well-known production company with a focus on entertainment and culture. He got a call from a friend asking how much he knew about esports — before they became the biggest name in esports, FaZe Clan needed someone to run finance — met the team and took the leap.
“I'd played video games growing up, but I certainly wouldn't have classed myself as a gamer,” Kenna said to Seeking Alpha. “[My friend] said you've got to go meet these guys. ... they had this huge audience and a huge following, but they weren't really a business yet.”
Now, Faze has ambassadors like NBA star Ben Simmons, NFL sensation JuJu Smith-Schuster and hip-hip musician Offset. Kenna, for his part, took the head job at GameSquare and has the company positioned for growth, both within the company and through acquisitions.
“We are focused on the agency, digital marketing media space,” Kenna told Proactive. “We are extremely bullish about the organic growth of our businesses, however are always looking for accretive acquisition targets. Our target areas are gaming-specific agency businesses in Europe and North America.
“We are finding that there are a lot of attractive acquisition targets in this space in the private market that don't have access to capital or an understanding of how to get any liquidity. Being publicly traded with a good investor base and great banking relationships puts us at a real advantage here.”
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel