Good Gaming, Inc. (GMER / OTC) Investor Presentation Spring 2017
Safe Harbor During the course of this presentation, the Company may make forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements including those made in this presentation. In order to comply with the terms of the Private Securities Litigation Reform Act, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements.
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Background and Overview Slides 4 - 10
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History The motto is the core of Good Gaming: “Where Amateurs Become Pros…” Good Gaming is led by a dedicated team of passionate gamers with thousands of hours of gaming experience former senior executives from top video game publishers. Inspired by a narrow World of Warcraft Battlegrounds loss, Good Gaming grew out of a vision to create a social networking platform that empowers a new generation of eSports gamers to be better. Built by the community, for the community, Good Gaming connects gamers with other likeminded enthusiasts, enriching their gaming experience and enhancing their competition, while giving them the opportunity to learn the strategies and ‘secrets’ of the pros. What’s more, with a continual offering of Guaranteed Cash Prize Online Tournaments, Good Gaming offers amateur gamers of every skill level the opportunity to compete and win cash and other valuable prizes in hosted online gaming tournaments throughout the year. 4
Management •
Vik Grover, CEO, CFO, Director – – –
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Don Wilson, CTO, Co-Founder – – –
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14 Years of programming and development of web platforms and data analytics. Prior employers include MCI (Verizon) and Comcast, where Don wrote applications handling billions of transactions. Wrote the GG platform using the Yii framework and all proprietary coding. Thousands of programming hours have been put into the software architecture.
Tim "Theude" Bergmann, COO – – –
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20+ years experience as an investment banker and sell-side research analyst covering TMT with a focus on emerging communications providers. Chartered Financial Analyst (CFA) designation. Left Wall Street 07/15 to build a company with global scope/scale leveraging the convergence of the communications sector, put together the angel financing to relaunch GG in 1H16. CEO of GG since February 2016.
Former professional eSports player, seasoned tournament-admin in live and online events. Co-Founder and manager of eSports organization Fade2Karma. Former consultant to many eSports-related companies in talent acquisition and general management, Wide network of eSports contacts in the pro- scene, with journalists and game developers.
Kristina Brock, Director of Content –
Manages the Content Creation team that produces all guides and videos seen on the Good Gaming website. Before coming to GG, Kristina worked as a freelance editor and writer for clients in the gaming industry. She is a member of the Golden Key International Honor Society, and was the founder and VP of Gamers at Texas State.
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Advisory Board •
Sean Stalzer, Owner, The Syndicate – – – –
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Oversees The Syndicate, the oldest online gaming guild in the United States and listed in the Guinness Book of World Records with 20+ years of operations. Performs testing of early releases for major games publishers. 1,200 members in 40 countries worldwide. Provided extensive consulting to Good Gaming with regard to stress testing the tournament platform, providing feedback and proposed changes which resulted in over 100 fixes and patches being completed by GG programmers this spring. Network of connections in the eSports world that are proving invaluable to GG’s success.
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Executive Summary • •
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Good Gaming, Inc. is the owner / operator of the world’s leading tournament platform for eSports. The Company has developed a platform that can scale to up to 512,000 concurrent competitors in order to compete for cash and prizes while playing online games. Good Gaming has also built a destination site (i.e., social network) for gamers, where they can collaborate, communicate, and compete. The platform will offer a proprietary “Mercenary System” where gaming labor can be exchanged and tools and weapons can be purchased, swapped, or exchanged. After running the largest of its kind tournament in Dec. 2014 under the “Hearthstone” title, Good Gaming spent the balance of 2015 - 2016 automating its platform and is now offering scale tournaments. Today, Good Gaming is ready to enter a hockey stick of growth and monetize the social network with a subscription model. The Company continues to work with Blizzard and is in discussions with other leading and emerging games publishers and partners. 7
Situation Assessment • • •
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Good Gaming merged into a public vehicle in Feb. 2016 and completed a small capital raise to relaunch operations. Good Gaming’s tournament system is now complete and the Company is deploying proprietary content and other modules of its social network. The Company has agreed to run tournaments with Blizzard under the titles “Hearthstone”, “Overwatch” and “Call of Duty”, with other publishers in various stages of discussions. Good Gaming is embracing a freemium model which will be advertised on its site and through online channels, and inclusionary free-to-play tournaments (i.e., freerolls). Target monetization date is May 1, 2017. The Company has enlisted semi-pro and pro-streamers with audiences in the tens and hundreds of thousands in order to promote the destination site and open and invitational tournaments. A raise of up to $3.0MM is required to fully fund the business. The Company is offering Series A Preferred stock in the round. Management believes the stock will make a major move higher upon completion of financing and upcoming monetization. 8
Why Is Good Gaming Unique? •
Owner and operator of the world’s most scalable eSports tournament platform that can handle 512,000 individual gamers or team competitors. – 100 tournaments run since launch in Spring 2016, with pots ranging from $250 to $6,000 and including invaluable Hearthstone Cup Tournament (HCT) points. – Games include Hearthstone (fantasy card game with over 50MM players worldwide), Overwatch (team shooter game with over 10MM players worldwide launched in 2016), and Call of Duty (175MM licenses sold since launched over 10 years ago), with additional publishers and titles under negotiation / launch. – Platform agnostic, with tournaments run on both PC and console. – Publisher agnostic, meaning GG can run tournaments for any game worldwide.
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Owner and operator of the world’s premiere social network for gamers at www.good-gaming.com: – Since public beta in mid-2016, the site has attracted over 11,000 members who participate in tournaments and enjoy access to content, forums, streaming, member-only gaming (Minecraft, with additional titles planned). – GG will soon monetize its site with a freemium model, migrating customers to monthly subscriptions that will give paid members access to premium tournaments and content. Free members will be monetized through advertising. 9
Good Gaming’s Vision • •
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Good Gaming believes the eSports market is poised to go into a hockey stick of growth. GG is at the right place at the right time. 250MM amateur gamers worldwide have nowhere to congregate, collaborate and compete in order to hone their skills in eSports and make the leap to the professional level. GG’s tournament platform has been vetted by the oldest gaming guild in the world – The Syndicate – and can scale to tens and hundreds of thousands of concurrent competitors, dwarfing “me-too” tournament platforms that can handle at most 1,028 concurrent players. The Company believes a B2C model will drive traffic to its social network, leading to a sticky model that will compel members to pay monthly fees to have access to premiere cash tournaments and premium content. GG’s proprietary Mercenary System will differentiate GG, allowing teams to draft players into the mix and take out bounties on threat players. No other Company in the planet has the combined massively scalable tournament platform and social network that will be the haven for the eSports world to embrace. 10
Industry Overview & Outlook Slides 12 - 26
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eSports the Next Tech Phenomenon
Source: Activate Tech and Media Outlook 2017
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U.S. eSports $1.5BN Business by 2020
Source: Activate Tech and Media Outlook 2017 13
Global eSports $5BN Market by 2020
Source: Activate Tech and Media Outlook 2017
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Market To Reach 500MM Fans
Source: Activate Tech and Media Outlook 2017
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eSports Growth > Traditional Sports
Source: Activate Tech and Media Outlook 2017 16
eSports Viewership Staggering
Source: Activate Tech and Media Outlook 2017 17
Attractive Gamer Demographic
Source: Activate Tech and Media Outlook 2017
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Attractive Gamer Demographic (2)
Source: Activate Tech and Media Outlook 2017
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Attractive Gamer Demographic (3)
Source: Activate Tech and Media Outlook 2017
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Top Tech Companies & eSports
Source: Activate Tech and Media Outlook 2017 21
Consumer Brands Targeting eSports
Source: Activate Tech and Media Outlook 2017 22
Tech & Media Ecosystem Benefits
Source: Activate Tech and Media Outlook 2017
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eSports Trajectory
Source: Activate Tech and Media Outlook 2017 24
eSports – Industry Data Points •
December 2015: Activision Blizzard hired the former CEO of ESPN to run its newly-created eSports division.
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January 2016: Activision Blizzard acquired Major League Gaming for $46MM.
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February 2016: ESPN launched its own eSports unit to cover the emerging industry including “Heroes of the Dorm” tournaments on ESPNU.
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February 2016: Yahoo! launched its own eSports unit to cover the emerging industry.
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May 2016: eSports debuts on TBS with three-hour Counter-Strike broadcasts and tournaments (“E-League”).
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September 2016: Philadelphia 76ers purchase Apex and Dignitas eSports teams.
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February 2017: NBA and Take2Interactive announce plans to form an eNBA league with launch targeted for 2018. 25
eSports Tournament Landscape Automated
Proprietary
Taking best of breed technology, owning carrier class infrastructure, and employing direct and indirect sales channels are the formulae for success in eSports platforms, putting Good Gaming at the top of the value stack‌
Manual
Local
Regional
Global 26
Good Gaming Positioning Slides 28 - 42
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Post-Modern Website
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Tournaments Listed on Home Page
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Financial Model • •
Good Gaming generates revenues through multiple revenue streams, most of which are prepaid: $5 monthly subscriptions for access to the site including: – Tournament entries, cheats, messaging, Mercenary System, e-commerce.
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Micro-transaction revenues, whereby subscribers purchase Good Gaming credits to use the Mercenary System and to buy merchandise and services (i.e., “Chinese menu”). – Riot City Games generated roughly $1BN in micro-transaction revenues last year alone.
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Advertising from vendors including major brands (video and banner). Sponsorships for events from entities looking to target the hard-to-reach gamer demographic: – In discussions with major brand names and emerging product vendors.
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e-Commerce sales of gaming equipment and other. White-label model including license fees to colleges, institutions, and others looking to run their own tournaments using our platform. 30
Marketing Strategy • •
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GG is pursuing a multi-pronged approach to marketing its platform. The Company is engaging pro eSports organizations such as Fade2Karma ("F2K") to market its eSports social network and tournament system to F2K’s ~ one million followers on Twitch.tv. GG is also engaging independent streamers for awareness. GG’s open tournaments are attracting pro- and semi-pro players that stream their competitions in GG tournaments to their own followers on Twitch.tv. The Company has engaged marketing consultants to assist on Search Engine Optimization and website enhancements, which will improve the quantity and quality of traffic driven to GG’s site by major search engines. Upon completion of a capital raise, GG intends to implement pay-per-click (PPC) marketing and other awareness campaigns to further drive traffic to the site. With regard to sponsors, GG has reached out to over 80 corporations and is in the early stages of securing sponsorships for tournaments and the site. The Company is also in discussions with strategic partners for co-branding and B2B deals. 31
Good Gaming Video & Banner Ads https://youtu.be/UEgeuHyPTiw https://www.youtube.com/watch?v=-DU5jrN62-g Click above text for advertising samples
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Good Gaming Tournament Update • • •
Management believes 2017 should be a breakout period for the Company. GG has now run roughly 100 tournaments since early 2016. H2H module perfected Spring 2016 running beta and open invitation tournaments under the “Hearthstone” title (fantasy card game). Team module tested in August 2016 via an “Overwatch” tournament, – Over a dozen 6-person teams battled for a small cash prize and SWAG from KONTROLFREEK. – GG hired shoutcasters who partnered with F2K to call the action.
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“Call of Duty” tournament run on PS4 September 2016, vaulting GG into the console market. – XBOX tournament targeted for 2017.
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GG has secured HCT points which Blizzard provides to GG at no cost, allowing GG to attract gamers wanting to turn pro in Hearthstone. More publishers and titles targeted for 2017 (CS.GO, EA, Riot Games). GG operational in NA and EU today, and islaunching in Asia in April 2017. Other regions such as Latin America TBA. 33
Traffic and Members Accelerating
As of March 2017, members exceeded 14,000 and the Company was on a run rate to approach 100K unique visitors in the month. Additionally, GG’s Alexa ranking has moved up 300% since Nov. 2016. 34
Virtual Goods & Services Marketplace Good Gaming will launch a proprietary “Mercenary System”: •
The Mercenary System is an innovative tool that gamers can use to barter their goods and services with other gamers and earn vital Good Gaming Points. The Mercenary System has a simple user interface whereby a gamer can trade Good Gaming Points to other gamers for goods and services, or any other task that a gamer wishes to place a value on. It proprietary, and believed to provide a long-term sustainable advantage as Good Gaming derives value from the micro-transaction market, expected to grow from over $1BN in revenues today to multiple billions of dollars of revenues in the next few years.
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Mercenary System 2.0 intellectual property will be protected via patent and/or copyright filings.
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Platform 2.0 Launch Complete •
Platform 1.0 ran the tournament in Winter 2014; was semi-automated, not scalable. 1.0 platform was gutted and rewritten under the Yii Framework - http://www.yiiframework.com/.
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2.0 tournament system now fully vetted and flawless. Complete version 2.0 of website almost complete. Public launch of the complete social network occurred in Summer 2016 and the site now has over 10,000 members (effective Feb. 1, 2017).
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Now offering Games Hosting (e.g., Minecraft with other titles TBD), Merchandise, and Exclusive Content areas of the revenue model including Mercenary System.
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Integrate with Discord to establish a tournament communication system that improves user experience.
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Provide a means for Colleges or Organizations to create and host their own tournaments or gaming events (white label plan). 36
Platform 3.0 – Next Generation • Become the NCAA of eSports, Feeding minor league players into the pro leagues such as MLG and ESL. • Open Scholarship programs for colleges by creating “eSports Programs”. • Open physical locations to host and hold LAN tournaments and other eSports related events. This likely will be done through partnerships with casinos and gaming organizations. • Create the first ever “Triple Crown” event for eSports. Testing gamers in more than one field of gaming for bragging rights. • Own and manage a Good Gaming Professional eSports team. • Launch mobile tournaments.
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Strategic Discussions •
Talking to Native Tribes for investment, partnership and sponsorship of Good Gaming: – Deployment of hybrid Internet tournament model with final 12 - 24 contestants on location at major casino properties in the U.S. and abroad. – Substantial monthly funding to brand their gaming businesses by sponsoring Good Gaming’s site and tournament series. – Provides means of gaming operations targeting Millenials, who are typically not playing table games on properties. – Expectation is to deploy eSports rooms, wings and / or buildings to provide this generation a venue to compete for cash and prizes for major titles on property.
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Opportunities to partner with global gaming organizations with widespread deployments of technology and tournament programs at small-, mediumand large sized casinos. – Possibilities of strategic investment, joint ventures, white-label, and other.
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Likely exit in 2 - 3 years through sale to a major gaming organization looking to leverage GG’s strengths and obtain its valuable Millenial demographic.
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Proposed Transaction •
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Capital raise of $1 - 3MM in the form of Series A Convertible Preferred Stock, which converts 1 - 20 into common shares and votes on an as converted basis. Pre-money valuation of $7.2MM. Piggyback registration rights. Reverse split contemplated, with all existing Preferred A and B shares to be converted, leading to a clean cap table of approximately 36.5MM common shares (pre-money). $135K of existing debentures to be retired, with $100K to be converted into common shares and locked up and leaked out. GG will implement an industry compliant stock option plan to retain key employees. Vesting to occur over three years. Lead investor to appoint one Director to the GG Board. Depending on level of commitment, lead investor to retain rights of first refusal for additional funding.
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Compliant With Online Gambling Laws • • • •
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GG is compliant with U.S. online gambling laws established in 2006, which prohibit online gambling on games of chance. eSports are considered games of skill. Contestants are pursuing profit based on their own success and not based on the success of others. GG has a legal opinion supporting this position (Mudd Law), available to investors in the Company’s planned capital raise. GG’s model is predicated on a membership base that pays a monthly fee to have access to premium tournaments and content. GG does not offer a “pay-toplay model”, insulating GG from potential gambling legislation. GG is implementing systems to prevent players from entering its tournaments from states that do not allow online gaming associated with cash prizes of any size or format (LA, SD, WA), and where it services are not in compliant with state laws, such as AZ, MD, CT, ND and FL GG’s rules of use requires players to be 13 or older in order to play. This is a self certification process at the time users sign-up to GG’s site. On closing of financing, GG will implement additional systems to enhance its compliance with current gaming laws in the U.S. 40
Risks and Considerations • • • • • • •
New entrants could replicate the functionality and services of GG’s platform, taking market share from GG’s business plan and/or putting pricing pressure on the model. Gamers may not find our services suitable for a recurring revenue model, limiting the success of a planned subscription model. Though they do not require it now, publishers may demand fees for licenses to their games for tournament purposes, which may add expenses to our P&L. Note: Tournaments > $10K jackpots typically require licenses. GG requires capital to execute on our plan. At present, the Company is not fully-funded to profitability and estimate we will require up to an additional $3.0 million to fully-fund our plan. Though Good Gaming is compliant with U.S. online gambling laws, they could be subject to change in the future, which may impact GG’s business. GG will need to staff up to meet its projections. Additionally, if the Company wins substantial B2B contracts, substantial staffing and execution will be critical to success. GG is a low priced stock with limited liquidity. Though management expects share price and volume to improve, there is no guarantee in these regards. 41
Summary •
The eSports market is moving into a hockey stick of growth, as 250MM gamers worldwide compete and strive to become pro caliber players.
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Good Gaming is in the right place at the right time. Good Gaming offers this vertical a destination site and scale tournaments that let gamers achieve their potential.
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Communication, Collaboration, and Competition all converge on the GG destination site, allowing subscribers to achieve their potential as amateurturning pro-eSports athletes.
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In Feb. 2016, Good Gaming completed a go-public transaction that positioned it to relaunch its business to the world’s amateur gamers.
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Good Gaming seeks additional capital of up to $3.0MM to fund its business plan to the next level. The Company believes it will generate a significant valuation when it proves out its business model.
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Management believes this could result in Good Gaming becoming a substantially larger organization over the next 1 - 2 years. 42
Questions & Answers ** Thank You ** Vik Grover, CEO Good Gaming, Inc. www.good-gaming.com 212-731-4806 vikgrover@good-gaming.com
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Appendix Industry Information & Other
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Global Games Market
Source: Newzoo
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Global Games Market By Region
Source: Newzoo 46
Gaming Market by Screen Type
Source: Newzoo 47
Gaming Segment Growth Rates
Source: Newzoo 48
Gamers & Spectators Want Action
Source: Activate Tech and Media Outlook 2017 49
Huge Spectator Betting Expected
Source: Activate Tech and Media Outlook 2017 50
In Game Betting Monetization
Source: Activate Tech and Media Outlook 2017 51
How Will eSports Achieve Potential?
Source: Activate Tech and Media Outlook 2017 52
eSports Winnings for Top Players
Source: Activate Tech and Media Outlook 2017 53