By Sagar V. Mankar North American esports and gaming company GameSquare has recently released its financial report for the year 2023, revealing record revenues of $52 million.
This represents a massive 85% increase over the previous year’s $28.1 million in revenues.
What Fueled Growth?
According to GameSquare’s report, the surge in revenue was mainly driven by the successful integration of Engine Gaming, which the company acquired in late 2022.
Additionally, the company’s organic growth initiatives, such as expanding its product offerings and exploring new market opportunities, also contributed to the impressive revenue figures.
Did Higher Revenues Translate to Profits?
Unfortunately, despite the impressive revenue numbers, GameSquare still reported a sizeable $31.3 million net loss for 2023.
While an improvement over their $18.1 million net loss in 2022, remaining unprofitable is certainly a concern amid an economic downturn.
How Did Aggressive M&A Strategy Impact Financials?
Over the past two years, GameSquare has adopted an aggressive mergers and acquisitions (M&A) strategy, both in terms of acquiring and divesting assets.
- Completion of the Engine Gaming acquisition in April 2023
- Sold its Frankly Media subsidiary for $4 million in November 2023
- Acquired FaZe Clan for $16 million+ in March 2024
- Sold Complexity Gaming for 10 million+ in March 2024
This approach has played a significant role in shaping the company’s financial performance.
Outlook for 2024
GameSquare’s CEO, Justin Kenna, expressed optimism about the company’s future growth prospects, stating,
“While we expect the 2024 first quarter will be affected by the asset sale, costs associated with the FaZe acquisition, and the realignment of our sales and marketing infrastructure, we believe 2024 will be a good year of growth and enhanced profitability. “
The company is forecasting $100 million in revenues and gross margins between 22.5-27.5% for the year.
This is based on a pro-forma basis and includes a full 12 months of contribution from the recently acquired FaZe Clan.
The company is also focused on enhancing operational efficiency and trimming costs.