After a difficult year in 2023, FaZe Clan aims to step back into the esports spotlight and is leveraging its lucrative brand licensing business to achieve that goal.
Gamesquare's acquisition of FaZe Clan, which Digiday reported on last October, was completed last month. The storied esports organization is now part of Gamesquare's broader portfolio, which also includes gaming and esports companies such as Ninja Labs and Stream Hatchet. Since then, FaZe Clan's social channels have been relatively in the dark, but the esports organization is set to officially relaunch as early as this week with help from Gamesquare's sales and marketing department .
“We're banking a lot of content. We don't want to just go live and be the same old FaZe,” said FaZe Clan CEO Justin Kenna. “Yes, the team is there working. We have intensive group sales meetings where the team is sharing and cross-selling and upselling.”
As FaZe seeks to escape the difficulties it experienced in the public markets, its biggest strength may be a business unit that was already active well before the acquisition: FaZe Clan's product licensing business. According to figures provided by the company, FaZe Clan has signed contracts with consumer goods companies such as Nike, Totino's, and Zuru to manufacture and distribute his FaZe-branded shoes, food, and foam dart blasters, and has increased product sales over the past two years. increased his $75 million. , approximately $7 million of that revenue will go towards FaZe royalties.
“It's different from deal to deal. I'm not going to say anything specific, but what we do with Ghost is different than what we do with Nike, and what we do with Zuru or SteelSeries is different,” FaZe Clan's said Adam Bauer, senior vice president of partnerships and business development. We confirmed that FaZe receives an average share of approximately 10% of product licensing revenue. “Zulu, we have been partnering for three years now. We plan to continue this partnership in the future. From a sales volume perspective, we have exceeded our initial goals by a wide margin. During this period, Zuru gained dramatic market share over Nerf.
FaZe Clan's product licensing deal is separate from its merchandise business, which currently sells two team-branded jerseys. After FaZe's product partnership with e-commerce partner NTWRK ended last year, FaZe management decided to bring the product business completely in-house.
“I think it makes sense given the scale of what they're doing,” said Jason Chan, director of esports and gaming at New York University. “If you're going to license out your brand for merchandising, it has to be a professional sports franchise in order for it to be significant. At the same time, if you put it all under the auspices of your organization, You can scale up and down better and get more revenue.”
future model
The success of FaZe Clan's product licensing business is attributable to the esports industry's brand partnership model and recent advances by some esports organizations, such as 100 Thieves, as esports companies work to reduce their reliance on sponsorship revenue. It could be a middle ground between spin-up propulsion. Our consumer products business in categories such as energy drinks is completely in-house.
John DeHart, director of business development at gaming company All Star and previously director of marketing and strategy for esports, said: “The brand licensing route is an absolutely viable alternative to owning and operating your own sub-brand. I think it's a possible option.” Organization eUnited. “FaZe has had great success with this model, but I worry that there are very few teams with the brand strength to execute the license.”
There's also always the risk that consumers will burn out on licensing esports brands. Bauer said his FaZe Pop flavor of Ghost Energy is currently sold in 60% of his U.S. grocery stores, but consumer products featuring the esports team's logo are a novelty. There's only so much you can get past before it's gone. The continued growth of FaZe's product licensing business will depend, in part, on the company's ability to continue down this path.
“There is no question that licensing a brand name to too many products risks exhausting customers and damaging its reputation,” said Barthélémy Kiss, CEO of game content creation platform Powder. said. “That being said, that's not a reason why esports teams don't pursue this further, but rather that teams seriously think about which third parties they license their brand names to and how they manage these partnerships.” It means should.”
As FaZe Clan is absorbed deeper into Gamesquare's organization, Kenna and other company leaders said it will become part of Gamesquare's broader portfolio, which includes pushing the brand into international markets such as Eastern Europe and the Middle East. , we are confident that it will help push FaZe's licensing business to new heights.
“By moving the right people, putting the right content out there, having a clear strategy and really engaging our fans, licensing opportunities will continue to grow and we can be really picky about who we play against. You can,” Kenna said. “For me, I think what's really important is leveraging the Gamesquare ecosystem to expand and strengthen our global footprint and turn this from just a North American opportunity to a global revenue opportunity.”
