GameSquare, FaZe Clan Stockholders Approve Merger

GameSquare and FaZe Clan shareholders approve merger

In two separate special meetings of stockholders held this month, publicly traded esports and gaming companies GameSquare and FaZe Holdings received official approval of the proposed merger that was announced on Oct. 20, 2023. 

With approval from shareholders at both companies, GameSquare said in a release that it anticipates “the transaction closing shortly, subject to the satisfaction of customary closing conditions.”

GameSquare owns esports organization Complexity Gaming, production studio Fourth Frame Studios, digital advertising consultancy Frankly Media, and streaming data analytics platform Stream Hatchet. GameSquare is also home to popular streamer Tim “Timthetatman” Betar, and Tyler “Ninja” Blevins, who joined the company as its chief innovation officer earlier this year and co-launched Ninja Labs.

FaZe Clan operates a number of esports teams competing in Call of Duty League, Rocket League, Counter-Strike 2, and many other competitive titles. It also has an entire stable of high-profile content creators (including its founders like FaZe Banks) and deals in place with companies such as McDonald’s and Porsche.

Following the merger, both companies will need to address perceived conflicts of interests in esports competitions where both FaZe and Complexity are active competitors such as Counter-Strike 2. Given the proliferation and wide acceptance of both legal and gray market gambling related to Counter-Strike 2, some kind of separation is likely, though how that plays out is unknown as of this writing. The Esports Advocate was told by sources in January that there was an effort to find investors that would help separate/divest Complexity from GameSquare, but we could not independently verify these claims at the time.  

It is also unclear what short-term material financial impact GameSquare will experience as a result of this merger closing in the next several quarters. In its Q3 2023 financial results that ended Sept. 30, 2023, GameSquare reported:

• Revenue of $16M USD, compared to $10.1M in Q3 2022. 
• Gross margin of $4.4M, compared to $3.6M in Q3 2022.
• A net loss of $5.1M, compared to a net loss of $4.2M in Q3 2022.
• Adjusted EBITDA loss of $3.6M, compared to a loss of $3.2M in Q3 2022.