With Roughly 646 Million Potential Gamers(1), Esports Could Be Worth Nearly $3 Billion in the Next Five Years(2)
GameSquare Esports Inc. (CSE:GSQ)(OTC:GMSQF) Could Score Big Points in this Potential Multi-Billion-Dollar Market
Esports has become a big business.
So much so that by 2022, the industry could be worth up to about $1.8 billion from nearly $950 million today.(3) By 2025, according to Research and Markets, that figure could be up to approximately $3 billion.(2)
In fact, it’s becoming so popular, the esports audience may nearly double from about 335 million to approximately 646 million within the next three years, according to Business Insider.(2)
Even colleges across the U.S. look to be jumping on the bandwagon.
Miami University, Boise State, Georgia Southern University, Georgia State University, and several more have established varsity esports teams.(4) The National Association of Collegiate esports, as noted by Greenville News, also stated that “195 colleges and universities nationwide offer esports scholarships.”(5)
Even industry giants are getting involved with esports.
- Activision Blizzard is involved in several eSports leagues, such as the Overwatch League and the Call of Duty League.(6)
- Take-Two Interactive’s NBA 2K League could become one of the most-watched esports leagues in the world.(7)
- Electronic Arts announced that one of its biggest esports franchises, Madden NFL 21, will feature a tournament series called Derwin James vs. The World.(8)
- Draftkings Inc. CEO Jason Robins claims that, “Esports has stuck. It’s been a huge growth area over the last couple months for us,” as quoted by EsportsInsider.(9)
In short, the esports industry does not appear to be cooling any time soon.
After bouncing from double bottom support at around 40 cents, the stock peaked at about 65 cents before pulling back to nearly 50 cents. It appears to have caught strong support at this level and could potentially challenge prior highs as the eSports market sees momentum.
Consider this too.
- According to Business Insider, “The global esports audience is expected to double from approximately 335 million in 2017 to nearly 646 million by 2023.”
- Esports interest is likely to increase from here as more franchise-style leagues are created, eSports teams become more centralized, and audience size continues to grow explosively.
- “Video Gaming revenue has the very real potential to be a trillion dollar business over the next ten years. One of those drivers of growth is esports. Interactive gaming is the largest entertainment revenue generating vertical in the world earning more than box office and music sales combined,” says Michael Rubinelli, the CEO of the online esports platform Mogul and former executive at Electronic Arts, Disney and Midway.”(11)
So yes, the potential is there.
GameSquare is an international esports company headquartered in Toronto, Canada. The company seeks 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 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.
Most recently, the company announced that it plans to acquire Reciprocity Corp. (the parent company of GCN), a privately held, established gaming and esports brand with assets in the United States of America, Asia, and Latin America- three of the largest and fastest-growing global markets.(14)
Along the way, the deal is expected to:(14)
- Produce high revenue growth. Code Red and Reciprocity have shown strong revenue growth as esports engagement and viewership have increased. Reciprocity management expects to receive the full earn-out payment based on current performance and its strong sales pipeline.
- Help produce positive EBITDA generation. Management at GameSquare and Reciprocity are focused on generating positive EBITDA while rapidly growing sales. Management believes that this is a unique and differentiated strategy within the esports industry, contributing to developing significant shareholder value.
- Help achieve meaningful scale. The company is working to achieve significant financial growth in the near term and long term. Reciprocity management expects to receive its full earn-out payment, which positions the company favorably from a financial perspective. Leadership from both companies believes that scale, rapid sales growth, and profitability supplemented by growth through acquisitions are necessary for long-term success in the esports industry.
- Help provide access to the most extensive and fastest-growing gaming and esports markets. GCN is headquartered in Los Angeles, giving access to the highly lucrative US market. Reciprocity and GCN have built relationships with household brands and Fortune 500 companies. Entry into the US market is expected to represent a positive milestone for GameSquare. Further, Reciprocity’s ownership in esports organizations based in Asia and Latin America is anticipated to provide the company with a foothold in two of the largest and fastest-growing gaming and esports markets.
JUSTIN KENNA – CEO
Experienced executive in gaming, esports and media. Former CFO at FaZe Clan. Previously at Madison + Vine, Goldman Sachs, Deloitte, and Ernst & Young and belongs to the Institute of Chartered Accountants.
PAUL BOZOKI — CFO
Experienced finance executive with 25 years of experience in finance, accounting and tax. More than 10 years serving as CFO of various public companies listed on the TSX and TSXV.
KEVIN WRIGHT – PRESIDENT
Experienced finance professional in technology and gaming sectors. Previously with Canaccord Genuity, Macquarie and corporate strategy at Rogers Communications.
JAN NEUMEISTER — HEAD OF EUROPEAN OPERATIONS
Leader in digital marketing and global partnerships in esports and entertainment. Previously with FaZe Clan, Manchester City FC, Mediacom, and WPP’s MindShare.
CRAIG ARMITAGE – DIRECTOR
25 years experience in capital markets advisory, communications and investor relations. Craig is a cofounder of LodeRock Advisors and previously with The Equicom Group and IA Clarington.
MAURICE COLSON – DIRECTOR
35 years experience in the investment industry and was managing director for a major Canadian investment dealer in the United Kingdom.
NEIL SAID – CHAIRMAN
20 years experience as a corporate securities lawyer for public companies in Canada and abroad. Neil previously practiced law at Osler, Hoskin & Harcourt LLP
Source 2: https://www.researchandmarkets.com/reports/4792907/global-esports-market-forecast-up-to-2025
Source 3: https://www.businessinsider.com/esports-ecosystem-market-report
Source 4: https://www.redbull.com/us-en/theredbulletin/the-surge-of-college-esports
Source 5: https://www.greenvilleonline.com/story/opinion/2021/02/13/opinion-you-could-get-scholarship-playing-video-games-esports-gamers/4385829001/
Source 6: https://www.fool.com/investing/2020/03/12/things-know-activision-blizzard-1b-esports-deal.aspx
Source 7: https://investorplace.com/2020/04/5-reasons-why-take-two-stock-is-the-best-gaming-stock-to-buy/
Source 8: https://www.ea.com/games/madden-nfl/madden-nfl-21/compete
Source 9: https://esportsinsider.com/2020/07/esports-betting-spike-recedes/
Source 10: https://assets.website-files.com/5fc1249d37773c3a0ffc1262/6021949354e17f1df8e2bb8e_20210201%20-%20GameSquare%20(GSQ)%20Corp%20Deck.pdf
Source 11: https://www.prnewswire.com/news-releases/esports-growing-infrastructure-is-helping-reshape-the-video-game-industry-301108254.html
Source 12: https://assets.website-files.com/5fc1249d37773c3a0ffc1262/6021949354e17f1df8e2bb8e_20210201%20-%20GameSquare%20(GSQ)%20Corp%20Deck.pdf
Source 13: https://stockcharts.com/h-sc/ui?s=GSQ.CA
Source 14: https://www.gamesquare.com/post/gamesquare-esports-inc-expands-on-the-outlook-and-strategy-for-the-proposed-acquisition-of-reciprocity-corp-within-the-gaming-and-esports-industry
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