With half of 2024 in the rear-view, media company GameSquare (NDAQ:GAME) is hailing the past six busy months as a success as the company continues on the path to deliver on it’s annual guidance of $100 million. Key transactions over that time highlight growth, totalling $36.6 million, they include:
- December 2023: Sold non-core radio business assets for $3.4 million.
- March 2024: Sold Complexity Gaming for $10.4 million.
- May 2024: Secured an $11 million investment from Matt Kalish into FaZe Media.
- June 2024: Sold non-core content management software and PR distribution assets for $2.2 million.
- June 2024: 25.5% interest in FaZe Media sold for 9.5M whilst retaining a controlling voting interest and will continue to consolidate FaZe Media’s financial results into the groups financial statements.
Establishing its footprint as a key player in the media and gaming industry, the team has kept its focus on enhancing its core businesses and fostering robust collaborations, setting the stage for continued growth and innovation with a well capitalized business due to recent transactions.
Strengthening partnerships and expanding capabilities
(Source: Game Square Holdings Inc.)
One of GameSquare’s standout achievements has been the reinforcement of its long-standing partnership with Riot Games, a renowned video game developer known for blockbuster franchises such as “League of Legends” and “VALORANT.” Through its subsidiary Stream Hatchet, GameSquare has been providing software-as-a-service (SaaS)-based analytics solutions to Riot Games for more than five years. This partnership recently expanded with the inclusion of influencer marketing capabilities from Sideqik, another GameSquare company.
Eduard Montserrat, CEO of Stream Hatchet, highlighted the synergy between the companies, emphasizing that their combined offerings significantly enhance data and analytics support for leading game publishers and content providers.
“Our collaboration with Riot Games marks a significant milestone for Stream Hatchet and Sideqik as we benefit from the complementary nature of their combined offerings,” he said in a news release. “This is the latest example of how our expanded data and analytic offerings support the world’s leading game publishers and content providers.”
Gabrielle Haug, Riot Games’ director of esports insights, praised Stream Hatchet’s suite of data solutions, which enables Riot’s esports team to deliver exceptional event experiences. The detailed data and insights provided by Stream Hatchet allow Riot Games to continually elevate the quality of its esports events, likely resonating with millions of players worldwide.
“Having access to data and insights that tell the story of what resonates with our players is vital to our ability to continuously raise the bar on these experiences to the level our esports fans want and deserve,” she added.
Enhancing esports event management
Riot Games utilizes GameSquare’s SaaS tools to manage global esports event scheduling. Stream Hatchet’s measurement and performance solutions help Riot track audience and viewership trends across more than 70 esports leagues and more than 130 annual live events. This data informs decisions on event scheduling and tournament formats, enhancing experiences for players and fans.
(Source: Game Square Holdings Inc.)
Strategic divestitures and acquisitions
GameSquare has also streamlined its business by divesting non-core assets. Its Toronto-based headquarters and subsidiary Frankly Media LLC sold Frankly’s content management software to Immergo and its press release distribution business to XPR. These assets, which generated roughly $1.6 million in annual revenue, were sold for $2.2 million, payable over three years.
CEO Justin Kenna emphasized that these divestitures align with GameSquare’s strategy to focus on high-growth, high-margin businesses, adding nearly $16 million in non-dilutive capital over six months.
“Selling our non-core CMS and PR distribution assets also eliminates approximately $2.3 million of annual expenses, adding to our cost reduction strategies and our pursuit of profitability,” he said.
In a notable move, GameSquare acquired FaZe Clan for $14 million in stock and created a new entity, called FaZe Media whilst housing the esports assets in FaZe Esports. Subsequently, the move enabled GameSquare to sell 49 per cent of FaZe Media to Matt Kalish for $11 million. This restructuring aims to reignite the FaZe brand by involving its founders in significant roles and by getting capitalizing it for growth. A further 25.5 per cent stake in FaZe Media has subsequently been sold to FaZe Media’s CEO, FaZe Banks, for $9.5 million, however GameSquare has retained a controlling voting interest and will continue to consolidate FaZe Media’s financials. GameSquare plans to reinvest these additional proceeds into growth and working capital.
FaZe Media, now valued at approximately $40 million vs the $14M GameSquare purchased it for a few months ago, reported $30 million in revenue for the 12 months ending March 31, 2024. FaZe Esports, still wholly owned by GameSquare, generated $11.3 million in the same period. These transactions underline GameSquare’s commitment to profitability, ability to create value for shareholders and market leadership in the gaming and esports industry.
Levelling up the portfolio
GameSquare’s successful divestitures, acquisitions and strengthened partnerships all point to its commitment to focusing on high-growth areas and enhancing its market position. By streamlining its business and investing in core competencies, GameSquare is in an ideal position to capitalize on emerging opportunities in the dynamic gaming and esports landscape. For investors, GameSquare’s proactive approach and solid performance metrics signal a promising future in this rapidly evolving industry.
To keep up with the latest developments from the company, visit GameSquare.com.
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(Top image: Game Square Holdings Inc.)