In a world where attention spans are short and companies and brands are competing daily to gain and hold onto loyal customers, brands must continuously develop exciting new ways to attract, engage, and monetize a dynamic active user base.
One such company that is endeavoring to drive engagement with super fans in the sports, television, and live event space is Vancouver-based GameOn Entertainment Technologies Inc. (GET:CSE; GMETF:OTC; 9E7:FSE). GameOn aids companies by providing a simple and accessible next generation gamification platform designed to drive engagement in sports, TV, news, concerts, stock market, politics, and more.
"What GameOn does best is gamifying entertainment, and investing in the company allows me to get into a very good sub-sector at a very low valuation."—Nick Chen
The company describes its business as "a leading technology company providing broadcasters, TV networks, OTT [over-the-top] platforms, leagues, tournaments, sportsbooks, and NFTs with interactive, social experiences around sports, television, and live events." Gamifying activities in these events allows its B2B partners to engage with super fans in the “never off mobile phone world” where users can connect, be social, compete, and collect rewards in real-time.
In a conversation with Nick Chen, CFA and partner at Hydra Capital Partners in Toronto, Chen stated that GameOn offers unique potential for growth.
Chen specializes in seeking out under-the-radar microcap companies that exhibit a high-growth returns potential of 10 times (10X) or more. Chen specified that he looks primarily at opportunities for investments in early-stage companies that have something different that could potentially be a game changer in their industry.
The firm's business model includes opportunities for licensing fees and revenue sharing from ads, brand sponsorships, and sales.
Chen told Streetwise, "What GameOn does best is gamifying entertainment, and investing in the company allows me to get into a very good sub-sector at a very low valuation."
Chen’s firm, Hydra Capital Partners, is a private group of independent industry professionals who each bring over 15 years of experience investing in Canadian capital markets. The firm's members have spent many years working on Toronto's Bay Street as institutional portfolio managers and investor/broker dealers.
The firm collectively has a vast amount of expertise investing in the agriculture, energy, mining, technology, and nontraditional financial services sectors. Hydra Capital Partners has been involved with GameOn for about 3-1/2 years, but in the last year or so it has developed into an increasingly exciting story for the market.
"Given that the Real Housewives partnership has been a good performer and has shown a lot of growth and engagement, I think that alone will bring a lot of new business, which would then lead to other [partnership] within the media space."
Chen pointed out that GameOn already has successfully proved several use cases demonstrating its effectiveness by increasing the number of active and return users for its B2B clients. One such example is GameOn's work with NBCUniversal and Bravo on the new reality TV show "The Real Housewives of Potomac."
The company advised that it helped develop and bring users to the show offering them the chance to play along using the complementary, free-to-play, Prediction Game app. Chen reports that the test project was an immense success, delivering 281% week-on-week growth in new users and a 144% week-on-week increase in active users.
Chen believes that the company's current business with NBCUniversal and Bravo could possibly lead to a lot more projects. He explained, "Given that ‘The Real Housewives’ partnership has been a good performer and has shown a lot of growth and a lot of engagement, I think that alone will bring a lot of new business, which would then lead to other [partnerships] within the media space."
GameOn’s recently announced partnership with the bestselling Chibi Dinos 10,000 NFT project is their latest foray in this space.
The company also recently entered into an agreement starting this month with MX Player in India to power free-to-play cricket prediction games for the IPL and ICC World Cup games. MX Player, which is owned by Times Internet, is India's most watched over-the-top (OTT) platform. Though cricket is not very well known in the U.S. and Canada, it is the second largest viewed sport in the world following football (soccer for our American readers).
"What I like about GameOn is that it's a tool that is being used for monetization by other companies, and I think that is the most compelling aspect to the story currently."
Chen stated that what makes this company so interesting is that it is a niche player in the gaming and entertainment space that has already been highly successful in delivering results for large key players in both sports and media sectors. The company has created some unique engagement tools making it an out-of-the-box B2B solution. If this success continues with one or two other high-profile firms, then GameOn may well be on its way to becoming a much bigger player in this market.
Chen commented, "What I like about GameOn is that it's a tool that is being used for monetization by other companies, and I think that is the most compelling aspect to the story currently." Chen added that another interesting thing is that "it's not similar to the rest of the smaller gaming plays that you see in the public markets right now in Canada." Chen listed several examples including Bragg Gaming Group Inc. (BRAG:NASDAQ; BRAG:TSX), FansUnite Entertainment Inc. (FANS:CSE; FUNFF:OTCMKTS), and Real Luck Group Ltd. (LUCK:TSX.V; LUKEF:OTCQB), all of which have much higher valuations — but they play in the same sandbox as much larger firms such as Draftkings Inc. (DKNG:NASDAQ).
One aspect that Chen feels is a greatly underestimated area for revenue growth for GameOn is in the new form of collectible category of non-fungible tokens (NFTs). Chen advised that, "One company called Sorare raised $680 million in order to create a solution that allows an NFT fantasy soccer game." Through its many collaborations and relationships with the sports world — in cricket with MX Player in India, among others — GameOn could serve as a key entry point to enormous opportunities for sales and marketing of NFTs as part of enhanced fan engagement and loyalty.
Chen feels confident in GameOn’s strong executive management team led by founder and CEO Matt Bailey and several other members who have extraordinarily strong backgrounds in the sports and entertainment industries. Nick Chen indicated that the firm's Chief Product Officer, Santiago Jaramillo, previously worked as the head of sports at Dapper Labs, which produced the NBA's Top Shot.
Company Chairman J Moses also serves as a director of Take-Two Interactive Software (TTWO:NASDAQ) and was actively involved in the roll out of the iconic Grand Theft Auto franchise.
According to Chen, the company is just starting to generate revenue. The firm's business model includes opportunities for licensing fees and revenue sharing from ads, brand sponsorships, and sales. Chen pointed out that the company is well funded and currently has approximately CA$3 million in cash on its balance sheet, which is enough to conservatively fund 16 months of forward operations — and that doesn’t include any revenue that may be generated.
Due to the company's relatively small market capitalization, Chen is not aware of any analysts who are currently providing coverage on the company. He also noted that "it's a brand-new space that GameOn is getting into and there aren't from my knowledge very many plays [where] you can invest your money into that kind of sector."
Chen noted that "GameOn [just became] a public company within the past six months…[We] have not seen any movement in the stock yet, so I believe that it has not been shown to the public yet, therefore no one knows the company, and it represents a very good opportunity in a very good space."
The company plans to market in Q4 to drive urgency. To that end, it announced new IR partners in the Chibi Dinos press release.
GameOn Entertainment Technologies Inc. is one of several companies in which Victory Square Technologies Inc. (VST:CSE; VSQTF:OTC-US) has invested. Victory Square can best be described as a technology incubator and accelerator with more than 20 innovative companies in its investment portfolio. Through its subsidiary V2 Games Inc., Victory Square purchased the assets of GameOn in December 2020 and renamed the firm as GameOn Entertainment Technologies Inc. Since that time, the company has expanded and completed an initial public offering in the beginning of June 2021.
Victory Square previously acquired Vancouver sports betting company FansUnite, and was instrumental in helping the firm complete a reverse takeover (RTO) transaction for $4.4 million. FansUnite is a technology-focused global sports and entertainment company that offers a regulated and lawful online gaming platform and related products geared toward online bettors and casino players. Today, FansUnite Entertainment Inc. (FANS:CSE; FUNFF:OTCQX) trades as a standalone company on the Canadian Securities Exchange and presently has a market cap of around CA$159 million (US$124.5 million).
Chen noted that even after going public, insiders at GameOn still own about 70% of the company's outstanding shares and commented that this level of ownership shows the commitment of the insiders to the company and its potential upside.
GameOn has a market cap of CA$18.8 million, and it trades in a 52-week range of $0.225 and $0.98 with 61,696,536 million shares outstanding.
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Disclosure:
1) Steve Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
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