For Whom the Bell Tolls? It Tolls for FaZe

FaZe Clan has officially gone public as the first gaming lifestyle brand to be listed on the Nasdaq. The company is now trading under the ticker FAZE after a launch valued at $725 million. While a landmark event in gaming worthy of celebration, FaZe’s launch also offers a few warnings for brands looking to expand into the mainstream.

From Humble Beginnings
FaZe has come a long way from its days of Call of Duty montages. More than a decade after its 2010 founding, it’s got a roster of popular esports players and streamers that command major followings, not to mention celebrity backers such as Snoop Dogg and Lebron James Jr. It’s among the most valuable esports properties, according to Forbes at least, and dabbles in fashion, crypto, and even food.

  • $53 million in revenue in 2021, up from $38 million in 2020
  • FaZe claims a fanbase of 500 million, with almost half being international
    • 80% are Gen Z

Shaky Foundations
It’s not all good news for FaZe, however, with its value plummeting around 30% in its first day as a public company. In what many will see as a red flag, the brand opted for the reduced regulatory requirements of a SPAC instead of a traditional IPO. Even then, its launch was delayed and original valuation slashed, with FaZe needing a $20 million bridge loan in March.

  • $36.9 million net loss in 2021 after a $28.7 million loss in 2020
  • Forecasting $90 million in revenue for 2022

Staying True to Oneself
If there is something for other gaming brands to keep an eye on, it’s whether or not FaZe’s pivot away from its traditional identity will backfire. Despite its roots in gaming and reliance on sponsorship for revenue, FaZe is positioning itself as an organization “in the top echelon of a youth culture company,” according to CEO Lee Trink. Non-gaming expansions such as gambling on esports make sense, but others such as ghost kitchens (the food industry isn’t exactly known for its margins) seem ill-advised. Only time will tell, however, if the big game FaZe is talking will pay off.