“Basically the story is youth demographics can no longer be found in traditional TV—we can find and connect to them through gaming and influencers with a company that now provides end-to-end solutions for reaching Gen Z and millennials,” Engine Gaming executive chairman Tom Rogers said in an email. “Gamesquare brings professionally produced content, a well-known team, and advertising and influencer networks with massive youth reach. We bring technology platforms and data and analytics to navigate through all the other gaming and social media platforms to amplify that reach.”
Under the terms of the all-stock deal announced Thursday, shareholders of Gamesquare, traded on the Canadian Securities Exchange, will own 60% of the new entity, with shareholders of Engine Gaming owning the balance. The combined company will bear the Gamesquare name while taking Engine’s Nasdaq and TSX Venture exchange listings and will trade under the ticker GAME in both places. The merger is relatively small, with each company sporting a market cap of about $9 million.
The deal is a continuing evolution of the esports presence of Dallas Cowboys owner Jones and Goff, who owns Crescent Real Estate, operator of numerous hotel and commercial properties in the U.S. Jones and Goff formed a Dallas-based esports team Complexity, in 2017, which they sold to Gamesquare last year in exchange for nearly half the Toronto-based business, worth about $27 million at the time.
Jones and Goff will be the largest shareholders in the combined company, with a stake estimated at 28%, based on available disclosures. Engine Gaming’s Rogers is a long-time media and technology executive who helmed DVR pioneer TiVo for 11 years in addition to leading publisher Primedia and holding leadership roles at NBC, including founding CNBC.
While the esports team Complexity has won various titles, the primary focus of the combined businesses will be on marketing and data and analytics to reach younger consumers through esports and media. “We bring technology platforms and data and analytics to navigate through all the other gaming and social media platforms to amplify that reach,” Rogers said. “Together we have over 300 million global touch points.”
Engine Gaming and Media shares were up about 4% to 58 cents on the Nasdaq today while Gamesquare was up about 8% to 6 cents in Toronto. Shares of both businesses have declined more than 70% this year.