Enthusiast Gaming announced that it will become a publicly traded company on the Nasdaq stock market, moving a step up from the Toronto Stock Exchange.
The Toronto-based Enthusiast Gaming aggregates publications, user-generated content, advertisers, events, and influencers that are all about gaming enthusiasm. The company owns a network of 100 web sites such as Destructoid, Nintendo Enthusiast, and The Escapist. It owns more than 1,000 YouTube channels and the Luminosity Gaming esports team. Enthusiast Gaming’s content reaches more than 300 million gamers a month globally, including 65 million mostly millennial and Generation Z gamers in the U.S.
By getting on the Nasdaq, the company’s stock could be more widely traded, it could garner more attention, and that could also help it raise more money when it needs to do so.
The company picked up a lot of its strength in video with the acquisition this year of Omnia Media for $8.5 million in cash and 18.25 million shares of stock, or roughly $24 million. That deal added 1,000 YouTube gaming channels, 30 weekly shows, and more than 500 gaming influencers.
“Omnia has super-engaged viewers that watch over 3.2 billion videos a month,” said Enthusiast Gaming CEO Adrian Montgomery in an interview with GamesBeat. “What we are really keen on is that this addition to our platform of websites and online communities and sports teams gave us access to high-quality video inventory. And we’ve added what we believe is among the most valuable video inventory on the internet, so we’re really excited about it.”
Montgomery said that revenue from Omnia Media could help push the company beyond $77 million in revenue in 2020, compared to $61 million in 2019.
“This is also a tremendously valuable proposition,” Montgomery said. “If you have a roster of over 500 influencers, then that is valuable. The fastest growing and soon to become dominant marketing channel is influencer marketing. It is $9.5 billion and growing at 36% a year. That’s how Kim Kardashian became a billionaire, as an influencer. Since we have access to over 500 influencers, we can package them into integrated sponsorship deals alongside our web site assets and esports assets. That is proving to be a very unique sales proposition.”
This week, the company is staging its EGLX 2020 online conference from November 10 to November 13 to highlight games, esports, music, fashion, and lifestyle content, and events.
As for the Luminosity Gaming esports team, physical events moving to online events is a downside. But Montgomery noted it has been able to grab more mindshare during the pandemic.
“As Woody Allen said, 95% of life is showing up,” he said. “And esports has been able to just flat out show up during the pandemic whereas traditional sports weren’t able to. So esports is getting disproportionate mindshare now.”
Enthusiast Gaming works with brand advertisers such as Grub Hub, Lego, HP Omen, State Farm Insurance, the U.S. Airforce, and Activision with custom advertising campaigns.
The good ol’ days
Menashe Kestenbaum, who started writing for gaming site IGN when he was 13, founded the company in 2014. The new company included Kestenbaum’s NintendoEnthusiast.com. In those days, he held meet-ups in the basement of a pizza restaurant for Nintendo fans, and then he expanded it to bars.
That devotion to enthusiast gaming has stayed with the company, but now it has mushroomed into a media empire. Among the highlights is a deal to highlight quadriplegic esports gamer RockyNoHands. Overall, the company has around 300 people working for it, both full-time and freelance.
Montgomery was previously CEO of Canucks Sports and Entertainment, and he was also president of conglomerate Tuckamore Capital Management.
Enthusiast Gaming invested $1.5 million via a convertible note into Addicting Games, which draws more than 10 million players a month to its simple casual games on the web and mobile devices. Through the various deals, Enthusiast Gaming has accumulated a debt of $29 million.
But Montgomery pointed out that the debt doesn’t start maturing until the end of 2022. In the meantime, Enthusiast Gaming is considering whether it will tap additional public market funds to either pay down debt or make additional deals. The company’s market value is around $138 million.
“There’s no one that has the combination of websites and channels and teams and events that we do,” Montgomery said. “We have 45% of every American male between the ages of 18 and 34. They visit at least one of our properties every month. That’s why we have brands like Gillette doing deals with us.”
Enthusiast Gaming’s main task is to find the fan communities as they’re growing up and getting bigger and bringing them into the fold.
“People are consuming content differently today, and the influencers can really matter in purchasing decisions, and so we believe we’re on the right course of action,” Montgomery said.
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