Toronto-based GameSquare Esports Inc., the esports firm backed by Dallas Cowboys owner Jerry Jones and Crescent Real Estate co-founder John Goff, is merging with live streaming and marketing platform Engine Gaming and Media Inc.
GameSquare shareholders will own about 60% of the combined company, with Jones and Goff remaining the largest investors. The merger deal is an all-stock transaction.
The deal creates a company that reaches across esports, sports, influencer, publisher and advertising networks for brands to connect with younger audiences. GameSquare has an audience of 220 million and Engine Gaming boasts 130 million monthly followers within its advertising network.
“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,” said GameSquare CEO Justin Kenna, who will lead the company after the merger. Engine Gaming CEO Lou Schwartz will become president.
Both companies are seeing revenue growth, while also reporting bottom-line losses.
In the first nine months of this year, GameSquare saw its revenue grow to $21.8 million — a 491% increase over the same period in 2021, according to a regulatory filing. Yet it’s already lost $10 million this year. The company projected a doubling of its revenue next year, even before Thursday’s merger announcement.
Engine Gaming recently closed its fiscal year with a 25% increase in revenue to $41.9 million, according to a filing. It also reported a $14.5 million loss for the 12-month period.
The companies said they expect limited overlap in existing clients — such as Kraft Heinz, Tyson Foods, Jack in the Box, Converse, HyperX, Epic Games, Microsoft, the Dallas Cowboys, Riot Games, Activision Blizzard and Electronic Arts — to provide new cross-selling opportunities.
“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,” Kenna said in a statement.
The combined firm will operate under the GameSquare brand globally, but will retain Engine Gaming’s Nasdaq and TSXV dual listing under the ticker GAME.
Last year, GameSquare acquired Frisco-based Complexity Gaming, the firm Jones and Goff bought in 2017, for $27 million. GameSquare reportedly wants to relocate its headquarters from Toronto to The Star, Jones’ mixed-used development built for the Cowboys.
