GameSquare Investor Presentation V1.1 Introduction Esports is now a mainstream form of entertainment; famed Fortnite player Ninja, who has had as many as 667,000 live watchers at the same time1, was featured on the cover of ESPN The Magazine in September 2018. For perspective, NBC’s prime broadcast show The Voice had a weekly audience of about 8 MM in November 20182, putting Ninja’s audience at over 8% of this figure. Ninja is successful, earning over $350,000 per month3. Though on a per-viewer basis, this is far less than what shows such as The Voice generate. Gamesquare will improve monetization of Esports viewership to address this gap. Our proposed business model is to make an outright purchase of the streaming rights of Esports players and teams, so that we can monetize them through methods such as product placement, sponsorships, and advertising. Further demonstrating the popularity of Esports, more than 50 US colleges and universities have varsity Esports teams4. Further, Goldman Sachs anticipates the monetization of Esports will go from $655 MM (2017) to just under $3 B (2022)5. 1 https://variety.com/2018/gaming/news/ninja-espn-magazine-cover-1202947409/ 2 https://www.nielsen.com/us/en/top10s.html 3 https://www.forbes.com/sites/insertcoin/2018/03/09/fortnite-goD-ninja-is-making-at-least-350000-a-month- from-twitch-subscriptions/ 4 http://www.espn.com/esports/story/_/id/21152905/college-esports-list-varsity-esports-programs-north-america 5 https://www.goldmansachs.com/insights/pages/infographics/e-sports/report.pDf So, how big is eSports? In the UK, video gaming in 2018 had a total market value of $4.85 billion USD That is double its 2007 value; more significantly, that is bigger than the music and video entertainment categories combined1 2017 Intel Extreme Masters World Championship (Katowice, Poland) had live attendance of more than 173,000, and online viewership of more than 46 million That is about 100,000 more in live attendance than the 2016 NFL Super Bowl championship, and 50% more remote watchers than the TV audience of Donald Trump’s presidential inauguration (30.6 MM)2 Friday Fortnite, hosted by Ninja and Keemstar, had 8.8 million viewers in June 2018 The season finale of AMC’s The Walking Dead only had 7.9 million viewers3 1 - https://www.bbc.com/news/technology-46746593 2 - https://www.forbes.com/sites/paularmstrongtech/2017/03/16/46-million-watched-live-esports-event-10-million-more-than-trump-inauguration-broadcast/#cb4145b91f40 3 - https://www.cnbc.com/2018/06/15/fortnite-westworld-twitch-youtube-gaming.html Ninja Featured on Ellen Degeneres In October 2018, Fortnite celebrity gamer Ninja was featured on the Ellen Degeneres Show1 (3.5 MM daily viewers2). During this episode, aside from interviewing Ninja, Ellen even played Fortnite with him on camera. This represents a validation of Esports as not only a truly mainstream form of entertainment and sport, but also a legitimately fascinating subject area as deemed by the producers of one of North America’s most- watched television shows. 1 - https://www.newsweek.com/ellen-ninja-twitch-youtube-views-viral-degeneres-1173568 2 - https://www.forbes.com/pictures/mfl45eghjh/ellen-degeneres-6/#5a4165902222 What are Multi-Channel Networks (MCN)? - MCNs are essentially “talent managers” of online personalities (e.g. YouTubers, Twitch streamers, etc.), enabling them to benefit from professional management services in order for them to make more money, on a sustainable basis - YouTube offers the following description: “Multi-Channel Networks (MCNs) are entities that affiliate with multiple YouTube channels, often to offer assistance in areas such as product, programming, funding, cross-promotion, partner management, digital rights management, monetization/sales, and/or audience development.”1 - As many emerging or semi-popular Esports teams and players are popular, but not professionally managed, they often do not have the ability to secure fair sponsorship deals, or the foresight to plan for matters such as intellectual property rights and taxes - Gamesquare’s approach is to offer a suite of MCN services to Esports teams and players, to maximize their cash flow and long-term potential - In 2016, Verizon bought 24.5% of MCN AwesomenessTV for about $159 MM2 1 - https://www.forbes.com/sites/lorikozlowski/2013/08/30/multi-channel-networks-101/#7068d4de54f0 2 - https://variety.com/2016/digital/news/verizon-acquire-awesomenesstv-stake-1201747104/ Case Example: YouTube Gaming YouTube has a new division dedicated to gaming, with its own app (on both Play and App Store) that enables screen sharing, with a corresponding “selfie” stream, for players to offer enriched interaction with their audience. According to a 2018 interview, YouTube Gaming has had 50 billion hours of viewership in 2018, and 200 million daily users logged in to watch gaming content. On average, this works out to 250 hours per user per year. 1 - https://venturebeat.com/2018/12/08/youtube-game-videos-were-viewed-for-50-billion-hours-in-2018/ Gamesquare’s Business Model Esports Media: As Esports is a new category of media, Gamesquare has assembled a team of knowledgeable media professionals who can provide expert oversight of streamers’ activities to bring maximum value to sponsors. Channel Management: Gamesquare makes an outright purchase of a player or streamer’s media rights (e.g. streaming, social media, etc.) for a fixed monthly fee. Then, Gamesquare will maximize their earning potential through advertising, product placement, and sponsorship deals, and pay the player/streamer a percentage of the total revenues on top of their fixed monthly fee. Original Content: With curiosity about Esports on the rise, there is much demand for insight into the subject. Gamesquare produces original video content to include interviews with famous Esports players, and documentaries showing what goes on behind the scenes. How does Gamesquare Create Value? For Streamers/Influencers For Sponsors • Stable monthly revenue guaranteed • Unique access to hard-to-target Gen by Gamesquare Z demographic • Securing reliable, lucrative • Base of millions of viewers; simpler sponsorship deals through than approaching streamers connections and networking individually • Legal advisory services (e.g. contracts, • Many creative modes of promotion, FTC-mandated sponsored post including sponsored jerseys, banner disclosures, etc.) ads, placed products, etc. • “Point of contact” for all business • Gamesquare proprietary research will matters help sponsors to better target ads • Advisory services from top streamers • Analytics to gauge effectiveness of and experienced media industry sponsorship campaigns professionals Making Everything Align eSports streamers want to be sponsored by major brands to make money Major brands want to sponsor eSports streamers to reach their target audience Gamesquare tailors its services to ensure streamers generate value for sponsors. This is a win-win, as streamers will have overcome the hurdles to becoming sponsored, and sponsors will have access to a plug-and-play promotional channel with low risk and high ROI. Sponsorship Value Chain Analytics 80% male 20% female 10 MM 45% 13-18 25% 18-25 20% 25-35 10% 35+ views/mo 18% North America 100 streamers 32% Asia 100k views each 7% Africa 38% Europe $ 5% Other Sponsors do Sponsors do Gamesquare Gamesquare Our sponsorships not want just want 100s of bundles many performs analytics then come at a one streamer streamers streamers to supply to help sponsors premium substantial with 100k with 100k viewership better target their views views each promotions Why do Gamesquare Sponsorships Come at a Premium? Simplicity: Sponsors do not need to pursue hundreds or thousands of mid-tier streamers. We do that legwork for them, delivering a curated group of streamers. Optimized Segmentation and Targeting: Through in-house analytics, we obtain demographic data to give sponsors insights into the audiences. Campaign Execution: Full-service implementation of sponsorship campaigns, including streamer-specific promo codes, and instructions for product placement (e.g. wearing a hat in a way that ensures logo is clearly visible). Big Brand Names in eSports Sponsorships Source: https://www.businessinsider.com/top-esports-sponsors-gaming-sponsorships-2018-1 Sponsored Intel Extreme Masters Sponsors League of Legends World Sponsors team Evil Geniuses, and Electronic Sports League Championship; partnered with 200+ cinemas competing in top levels of Dota 2, (ESL) since 2006. for tournament watch parties in 2016. League of Legends, and others. Also sponsors ESL. Sponsored tournaments for StarCraft 2 and Started Mountain Dew League helping Sponsored eSports organizations Dota 2. Also sponsors competitions and amateur teams become pro. Also sponsors TSM and Cloud9 starting Aug teams, such as Tempo Stor m. teams including Team Dignitas, Splyce, and 2017. Also sponsored Twitch’s E3 Team SK Gaming. tournament at Staples Center. Began sponsoring CSGO team Sponsors Rocket League Announced sponsorship of Astralis in Jan 2017. Championship Series. eSports team Out of the Blue in Oct 2017. ESPORTS MEDIA Expert Input and Advice • A major part of Gamesquare’s value to its streamers is to provide expert input and advice relating to gameplay and media • Experienced eSports streamers are able to provide skill-based coaching, in addition to promotional ideas to increase viewership • Similarly, experienced media professionals are able to offer strategies for engaging with the audience to build and retain a strong following • This is especially valuable for younger streamers who may not have enough professional or life experience to make the most of their streaming audience by themselves CHANNEL MANAGEMENT Channel Management Approach 1. Purchase Esports players’/teams’ rights to streaming (Twitch, YouTube, etc.) for a fixed monthly fee 2. Procure deals for product placement, sponsorship, and advertising 3. Integrate these elements in a way that generates exposure, but does not substantially compromise the integrity of the streaming content 4. Gamesquare will retain 85% of net earnings from these methods, disbursing the remaining 15% to the player/team in addition to their fixed monthly fee 5.