In a move to grow the world’s largest network of gamers and esports fans, Enthusiast Gaming Holdings Inc., (OTC: ENGMF)(TSX:EGLX) recently expanded its multi-pillar business to include a franchise of esports teams and events.
CEO Adrian Montgomery and President Menashe Kestenbaum spoke with Benzinga regarding a major expansion of Enthusiast’s media, events and esports businesses.
How It All Began
Kestenbaum is the brains behind Enthusiast. He began his career in gaming, writing for IGN, prior to launching a blog, Nintendo Enthusiast.
“I decided [to] recognize the difference between agents, frontpage journalists and the community on the backend,” said Kestenbaum.
“The value proposition I told them was that this is by the community, for the community. If you’re a really great content creator and people respect your voice within the community, we’re going to bump you to the front page, and you'll get a rev share.”
People took note of Kestenbaum’s intent; soon after the blog started, Nintendo Enthusiast received an influx of former IGN members.
Then, in 2014, Kestenbaum left his full-time job to focus on building Enthusiast, a monetizable gaming content platform.
“We started bootstrapping by throwing gaming events, because it’s an easy way to get a couple hundred people out to a bar. They would pay $20 to enter it, and they'd all hang out together throughout the day.”
The events grew rapidly, garnering interest from thousands of participants. Kestenbaum used the proceeds to build out the network.
“In 2015, we reached out to a lot of gaming sites to figure out how to sort of network and get sites to come onboard, because we really needed economies of scale in order to reach out to advertisers,” he said.
As Enthusiast’s growth started to snowball, other sites and users caught wind and joined.
“We have continued to see strong growth year over year, which is exciting. In 2016 we generated $350,000 in revenue, in 2017, we grew our revenue to $3.5M - 10x growth proved to us we were onto something. In 2018, we increased revenue significantly to $11M and in 2019 we are anticipating significant revenue growth compared to last year. We are releasing our Q4 2019 results at the end of the month, but typically Q4 is our strongest quarter, so we are very encouraged by the continued network growth.”
The platform is now the largest gaming network in North America and the U.K., bigger than Amazon's (NASDAQ: AMZN) Twitch, IGN and GameSpot, generating over 150 million “super gamers” globally on a monthly basis.
Rapid Expansion, Partnership
Kestenbaum told Benzinga Enthusiast events grew so large that bigger venues were required.
“Aquilini Investment Group, the owners of Rogers Arena in Vancouver, had an opportunity to host the biggest esports tournament in the world - the Dota 2 International,” Montgomery said when talking about his interests in the space. “Our concern over turnout was how difficult it is to sell out a 20,000 seat arena for one night, let alone six straight… but we took a huge risk, and went for it.”
That risk paid off. The 20,000 seat arena sold out, breaking attendance records, noise records, and merchandise records. The energy of the tournament is what ultimately inspired the Aquilini family to get further involved in the esports industry.
“You know, working for a great entrepreneurial family -- within a month -- we purchased the Vancouver Titans Overwatch team,” he said, in a discussion regarding fanbase monetization and the acquisition of a noncontrolling interest in the Vancouver Titans and the Seattle-based Surge Call of Duty team.
Core Offering, Vision
“It's a new form of entertainment that wasn't around a while ago, but it's so quickly dominating, and … we're at the forefront of it in terms of scale.”
Enthusiast is a massive platform comprised of three divisions: media, events and esports.
The firm’s media platform includes hundreds of gaming related websites and YouTube channels that reach over 150 million visitors monthly; the esports division -- Luminosity Gaming -- has a fanbase of over 60 million followers; and the events business owns and operates Canada’s largest gaming expo and the largest mobile business-to-business event in Europe.
“We have 30 events around the world. The largest ones are in Canada and the U.K.,” said Kestenbaum.
When asked about long-term vision, Montgomery told Benzinga the business aims to leverage technology in developing relationships and better engaging with hardcore gamers via the events and content business.
“In addition to a great advertising platform, we’re going to unlock new freemium models,” he said. “We’re going to harness the power of technology to further look at our engagement metrics and see which tools are working [and] interesting to gamers who are already there, to give them more things to do, more ways to connect with each other, more ways to create the user generated content.”
To learn more about Enthusiast Gaming and become a part of the community, visit enthusiastgaming.com.