GameSquareInvestor Presentation

V1.1

1 https://variety.com/2018/gaming/news/ninja-espn-magazine-cover-1202947409/

2 https://www.nielsen.com/us/en/top10s.html

3 https://www.forbes.com/sites/insertcoin/2018/03/09/fortnite-god-ninja-is-making-at-least-350000-a-month-from-twitch-subscriptions/

4 http://www.espn.com/esports/story/_/id/21152905/college-esports-list-varsity-esports-programs-north-america

5 https://www.goldmansachs.com/insights/pages/infographics/e-sports/report.pdf

Introduction

Esports is now a mainstream form of entertainment; famed Fortniteplayer Ninja, who has had as many as 667,000 live watchers at the same time1, was featured on the cover of ESPN The Magazine in September 2018.

For perspective, NBC’s prime broadcast show The Voice had a weekly audience of about 8 MM in November 20182, putting Ninja’s audience at over 8% of this figure.

Ninja is successful, earning over $350,000 per month3. Though on a per-viewer basis, this is far less than what shows such as The Voice generate. Gamesquare will improve monetization of Esports viewership to address this gap.

Our proposed business model is to make an outright purchase of the streaming rights of Esports players and teams, so that we can monetize them through methods such as product placement, sponsorships, and advertising.

Further demonstrating the popularity of Esports, more than 50 US colleges and universities have varsity Esports teams4. Further, Goldman Sachs anticipates the monetization of Esports will go from $655 MM (2017) to just under $3 B (2022)5.

So, how big is eSports?In the UK, video gaming in 2018 had a total market value of $4.85 billion USD

That is double its 2007 value; more significantly, that is bigger than the music and video entertainment categories combined1

2017 Intel Extreme Masters World Championship (Katowice, Poland) had live attendance of more than 173,000, and online viewership of more than 46 million

That is about 100,000 more in live attendance than the 2016 NFL Super Bowl championship, and 50% more remote watchers than the TV audience of Donald

Trump’s presidential inauguration (30.6 MM)2

Friday Fortnite, hosted by Ninja and Keemstar, had 8.8 million viewers in June 2018

The season finale of AMC’s The Walking Dead only had 7.9 million viewers3

1 - https://www.bbc.com/news/technology-467465932 - https://www.forbes.com/sites/paularmstrongtech/2017/03/16/46-million-watched-live-esports-event-10-million-more-than-trump-inauguration-broadcast/#cb4145b91f403 - https://www.cnbc.com/2018/06/15/fortnite-westworld-twitch-youtube-gaming.html

Ninja Featured on Ellen DegeneresIn October 2018, Fortnite celebrity gamer Ninja was featured on the Ellen DegeneresShow1 (3.5 MM daily viewers2). During this episode, aside from interviewing Ninja, Ellen even played Fortnite with him on camera. This represents a validation of Esports as not only a truly mainstream form of entertainment and sport, but also a legitimately fascinating subject area as deemed by the producers of one of North America’s most-watched television shows. 1 - https://www.newsweek.com/ellen-ninja-twitch-youtube-views-viral-degeneres-11735682 - https://www.forbes.com/pictures/mfl45eghjh/ellen-degeneres-6/#5a4165902222

What are Multi-Channel Networks (MCN)?- MCNs are essentially “talent managers” of online personalities (e.g. YouTubers,

Twitch streamers, etc.), enabling them to benefit from professional management services in order for them to make more money, on a sustainable basis

- YouTube offers the following description: “Multi-Channel Networks (MCNs) are entities that affiliate with multiple YouTube channels, often to offer assistance in areas such as product, programming, funding, cross-promotion, partner management, digital rights management, monetization/sales, and/or audience development.”1

- As many emerging or semi-popular Esports teams and players are popular, but not professionally managed, they often do not have the ability to secure fair sponsorship deals, or the foresight to plan for matters such as intellectual property rights and taxes

- Gamesquare’s approach is to offer a suite of MCN services to Esports teams and players, to maximize their cash flow and long-term potential

- In 2016, Verizon bought 24.5% of MCN AwesomenessTV for about $159 MM2

1 - https://www.forbes.com/sites/lorikozlowski/2013/08/30/multi-channel-networks-101/#7068d4de54f02 - https://variety.com/2016/digital/news/verizon-acquire-awesomenesstv-stake-1201747104/

Case Example: YouTube Gaming

1 - https://venturebeat.com/2018/12/08/youtube-game-videos-were-viewed-for-50-billion-hours-in-2018/

YouTube has a new division dedicated to gaming, with its own app (on both Play and App Store) that enables screen sharing, with a corresponding “selfie” stream, for players to offer enriched interaction with their audience.

According to a 2018 interview, YouTube Gaming has had 50 billion hours of viewership in 2018, and 200 million daily users logged in to watch gaming content. On average, this works out to 250 hoursper user per year.

Gamesquare’s Business Model

Esports Media: As Esports is a new category of media, Gamesquare has assembled a team of knowledgeable media professionals who can provide expert oversight of streamers’ activities to bring maximum value to sponsors.

Channel Management: Gamesquare makes an outright purchase of a player or streamer’s media rights (e.g. streaming, social media, etc.) for a fixed monthly fee. Then, Gamesquare will maximize their earning potential through advertising, product placement, and sponsorship deals, and pay the player/streamer a percentage of the total revenues on top of their fixed monthly fee.

Original Content: With curiosity about Esports on the rise, there is much demand for insight into the subject. Gamesquare produces original video content to include interviews with famous Esports players, and documentaries showing what goes on behind the scenes.

How does Gamesquare Create Value?For Streamers/Influencers

• Stable monthly revenue guaranteed by Gamesquare

• Securing reliable, lucrative sponsorship deals through connections and networking

• Legal advisory services (e.g. contracts, FTC-mandated sponsored post disclosures, etc.)

• “Point of contact” for all business matters

• Advisory services from top streamers and experienced media industry professionals

For Sponsors

• Unique access to hard-to-target Gen Z demographic

• Base of millions of viewers; simpler than approaching streamers individually

• Many creative modes of promotion, including sponsored jerseys, banner ads, placed products, etc.

• Gamesquare proprietary research will help sponsors to better target ads

• Analytics to gauge effectiveness of sponsorship campaigns

Making Everything AligneSports streamers want to be sponsored by major brands to

make money

Major brands want to sponsoreSports streamers to reach their

target audience

Gamesquare tailors its services to ensure streamers generate value for sponsors. This is a win-win, as streamers will have overcome the

hurdles to becoming sponsored, and sponsors will have access to a plug-and-play promotional

channel with low risk and high ROI.

Sponsorship Value Chain

Sponsors do not want just one streamer

with 100k views

Sponsors do want 100s of

streamers with 100k views each

10 MM views/mo100 streamers

100k views each

Gamesquare bundles many

streamers to supply substantial viewership

Analytics80% male 20% female

45% 13-18 25% 18-25 20% 25-35 10% 35+

18% North America32% Asia7% Africa

38% Europe5% Other

Gamesquare performs analytics

to help sponsors better target their

promotions

$Our sponsorships

then come at a premium

Why do Gamesquare Sponsorships Come at a Premium?Simplicity: Sponsors do not need to pursue hundreds or thousands of mid-tier streamers. We do that legwork for them, delivering a curated group of streamers.

Optimized Segmentation and Targeting: Through in-house analytics, we obtain demographic data to give sponsors insights into the audiences.

Campaign Execution: Full-service implementation of sponsorship campaigns, including streamer-specific promo codes, and instructions for product placement (e.g. wearing a hat in a way that ensures logo is clearly visible).

Big Brand Names in eSports Sponsorships

Sponsored Intel Extreme Masters and Electronic Sports League

(ESL) since 2006.

Sponsors League of Legends World Championship; partnered with 200+ cinemas

for tournament watch parties in 2016.

Sponsors team Evil Geniuses, competing in top levels of Dota 2,

League of Legends, and others. Also sponsors ESL.

Sponsored tournaments for StarCraft 2 and Dota 2. Also sponsors competitions and

teams, such as Tempo Storm.

Started Mountain Dew League helping amateur teams become pro. Also sponsors teams including Team Dignitas, Splyce, and

Team SK Gaming.

Sponsored eSports organizations TSM and Cloud9 starting Aug

2017. Also sponsored Twitch’s E3 tournament at Staples Center.

Sponsors Rocket League Championship Series.

Began sponsoring CSGO team Astralis in Jan 2017.

Announced sponsorship of eSports team Out of the Blue in

Oct 2017.

Source: https://www.businessinsider.com/top-esports-sponsors-gaming-sponsorships-2018-1

ESPORTS MEDIA

Expert Input and Advice• A major part of Gamesquare’s value to its

streamers is to provide expert input and advice relating to gameplay and media

• Experienced eSports streamers are able to provide skill-based coaching, in addition to promotional ideas to increase viewership

• Similarly, experienced media professionals are able to offer strategies for engaging with the audience to build and retain a strong following

• This is especially valuable for younger streamers who may not have enough professional or life experience to make the most of their streaming audience by themselves

CHANNEL MANAGEMENT

Channel Management Approach1. Purchase Esports players’/teams’ rights to streaming (Twitch, YouTube,

etc.) for a fixed monthly fee

2. Procure deals for product placement, sponsorship, and advertising

3. Integrate these elements in a way that generates exposure, but does not substantially compromise the integrity of the streaming content

4. Gamesquare will retain 85% of net earnings from these methods, disbursing the remaining 15% to the player/team in addition to their fixed monthly fee

5. Gamesquare will also oversee business matters to include keeping records for tax purposes, and making FTC-mandated sponsorship disclosures when required

Channel Management Example

85% of revenue to

Gamesquare

15% of revenue toStreamer

In addition to their monthly buyout fee.

Streamer has 5,000 followers

and 100,000 monthly views, earning about $500/month

Gamesquare agrees to buy

streaming rights for $1,000/month

Deals secured to improve

monetization through

sponsorship, advertising, etc.

Following and viewership

increases, with strengthened monetization

Revenue ScenariosIf Gamesquare can build the

revenue by 25x:

25 * $500 = $12,500$1,000 guaranteed to

streamer$11,500 divided 85/15

Gamesquare gets $9,775Streamer gets $2,725

Or 5.45 * original revenue

As you can see…• Flat monthly buyouts to streamers pay for themselves, very low risk

• The streamer does not have to do anything differently; they keep playing and streaming, we take care of the legwork

• This is profitable even with a modest 5x the “side hustle” revenue• Becomes even more profitable if 10x, 25x, or more is attained

• Especially when the model is distributed over dozens or hundreds of streamers

If Gamesquare can build the revenue by 5x:

5 * $500 = $2,500$1,000 guaranteed to

streamer$1,500 divided 85/15

Gamesquare gets $1,275Streamer gets $1,225

Or 2.45 * original revenue

If Gamesquare can build the revenue by 10x:

10 * $500 = $5,000$1,000 guaranteed to

streamer$4,000 divided 85/15

Gamesquare gets $3,400Streamer gets $1,600

Or 3.2 * original revenue

ORIGINAL CONTENT

In-House Video Content• Gamesquare has observed a deficit in Esports-related video content beyond just

gameplay footage (e.g. interviews, news, discussion panels, etc.)

• Of the interviews that exist, they are typically only about gameplay (i.e. on-the-spot commentary from players during breaks at tournaments), as opposed to being about the players themselves (e.g. their past life, how they got into Esports)

• To capitalize on this deficit, Gamesquare is contemplating two different YouTube channel ideas, for which it will produce content in-house

• Interview Channel: Players and other important Esports figures will be interviewed about their background, and their life outside of Esports, which will be of great interest to fans.

• Variety Channel: Our hosts will curate and present relevant content based on current events in the Esports world. This might include providing coverage of the industry’s news, having discussions about pressing questions, and short-form interviews.

• There are three popular Russian YouTube channels that produce this type of content, though there are not currently any popular channels for Western or English-speaking audiences

In-House Video Content

Expansion Idea: Netflix DocumentaryAs a newly mainstream phenomenon, the general public still has many questions about the rising celebrity subset of professional Esports players, as well as Esportsas a general concept.

Such subjects are commonly the topic of documentaries on Netflix. For example, Netflix recently released a documentary about social media influencers (The American Meme).

We propose the idea of producing a documentary for Netflix, which will bring about two key advantages…

1. Opportunity to sell placements in the documentary to others (such as X2 Games, Global Blockchain Mining Corp., etc.)

2. Obtaining federal government funding for media production/R&D

INVESTOR INFORMATION

The OfferingIssuer: Gamesquare

Security Type: Common shares

Offering Type: Private placement

Offering Size: C$500,000 (C$14,500,000 pre-money valuation)

Pricing: 34,483 shares at C$14.50 per share

Use of Proceeds:§ Acquisition and salary of initial Gamesquare influencers§ Initial Gamesquare platform development§ General purposes

§ Current capital structure consists of 1,000,000 common share attributable to the Founders of Gamesquare

How the Money Moves

Overhead Expenses

Streamer Buyouts

Capital Expenditures(e.g. upgraded streaming equipment, graphic designs for Twitch channel, etc.)

Operating Capital

Improved content/streamer presence put into

action

Approx. one-month turnaround

for revenues

Financial ProjectionsOur research* indicates that an eSports streamer with 100,000 total monthly views stands to bring in a minimum of $1,600 USD per month at the outset.

This figure is made up primarily of three “linear” revenue sources…

PPC/PPV Advertising Revenue: $75 Product Placement/Sponsored Posts: $607.50 Twitch Paid Subscriptions: $574

Monthly Revenue Subtotal: $1,256.50

The remaining 20% of the $1,600 monthly earnings projection is reserved for “non-linear” revenue sources that are less predictable, such as…

• Merchandise sales• Traditional sponsorships (e.g. logo on shirt, “brought to you by” message in

video)• Paid appearances (e.g. tournaments, eSports events, etc.)

* An overview of this research is provided in an appendix at the end of this presentation

Financial ProjectionsIn the example scenario, where a streamer with 100,000 monthly views will bring in $1,600 USD per month, the funds are allocated as follows:

Streamer: $1,090 per month ($1,000 base buyout plus 15% of $600 which is $90)Gamesquare: $510 per month (85% of $600)

Annualized, this works out to $4,920 USD per year in earnings for Gamesquare, in exchange for a fixed amount of “onboarding” legwork, and moderate “ongoing” work to improve the streamer’s revenues.

Naturally, as Gamesquare’s efforts will seek to bolster each streamer’s popularity and earning potential, this dollar figure stands to increase over time. Additionally, taking on streamers with higher viewership from the get-go (e.g. 500,000 monthly views) will scale these numbers upward as well.

Financial Projections – First Year of Operations

$0.2 $0.8 $1.5

$7.5

$11.3

$15.1 $15.1 $15.1 $15.1 $15.1 $15.1 $15.1

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

(US$mm)

Projected Monthly Revenues

10M 50M 100M 500M 750M 1 billion 1 billion 1 billion 1 billion 1 billion 1 billion 1 billion

Assumed Monthly Views Under Gamesquare

1 billion views per month thereafterProjected 6-month ramp-up from 10 million to 1 billion views per month

$0.0 $0.2 $0.3

$1.6

$2.5

$3.3 $3.3 $3.3 $3.3 $3.3 $3.3 $3.3

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

(US$mm)

Projected Monthly EBITDA

$96.7MProjected Year 1

Revenue:

$21.0MProjected Year 1

EBITDA:

8.4BProjected Year 1

Gamesquare Views:

In the simplest terms…• Esports audiences bring in money

• This audience is attracted by skilled Esports players/streamers

• Most mid-tier players/streamers do not have the business sense to earn what they could be earning

• Gamesquare provides them with a win-win deal… a guaranteed fixed monthly payment, and a percentage of the improved revenue on top of

that

• Gamesquare then becomes a good option for players/streamers as they need not concern themselves with figuring out how to earn more

• All OPEX is recovered in short order, as advertising revenue, sponsorship payments, etc., pay out monthly, thus creating a low risk level

Operational Team

Aktang AbdykerimCEO

Dimitry BukrieievPresident

Theo Van Der LindeChief Financial Officer

Pavel TsynHead of Marketing

Neil SaidLegal Counsel

Thank you for your time!

Appendix

Financial Projections ResearchStreamer viewership of 100,000 is allocated between YouTube (40,000), Twitch (40,000), and “Other” (20,000).

PPC/PPV Advertising Revenue

One German study uses $1 per 1,000 views as a benchmark for YouTube earnings1. A 2018 study shows that YouTube stars with 1.4 MM views per month earn less than $17,000 per year2. Taking $17,000 and dividing it by 16.8 MM views per year (12 * 1.4 MM/mo = 16.8 MM), a similar figure of $1 per 1,000 views is reached.

To avoid overestimation, this figure was handicapped at $0.75 per 1,000 views, and applied to all three viewership categories, resulting in a conservative estimation of $75 USD earned per month for 100,000 views.

Product Placement/Sponsored Posts

Data about the amounts paid for product placement was admittedly very limited, however a Shopify article provided some helpful insights about what influencers can expect to be paid for sponsored postings, or postings with product placements3:

Instagram: $10 per 1,000 followers, generally with a $150 minimum for a “static”/regular Instagram post, or about 20% of this figure for a “story” post.Snapchat: $500 for 1,000 to 3,000 unique views on a given postingYouTube: $20 per 1,000 subscribers

Using Ninja’s online presence information4, it was determined that Ninja had 19,492,440 monthly views on Twitch, and 12 MM followers, which is a ratio of 0.615 Twitch followers per view. His Instagram following is also 12 MM. The 0.615 ratio was applied to the projected 100,000 monthly views of Gamesquare’s example streamer, leading to an assumed 61,500 Instagram followers.

On YouTube, Ninja has 21 MM subscribers, which is 75% more than his Twitch following. The 61,500 figure for our example was then increased by 75% to 107,625 assumed YouTube followers.

As the primary metric utilized for Snapchat is post/story views, Snapchat’s assumed figure was calculated based on the same baseamount of Twitch views (100,000 per month), and reduced to 19,100 based on the size of Snapchat’s user base5 compared to Instagram’s6 (191 MM vs 1 B).

Financial Projections Research (cont’d)These figures were then handicapped by 30% each to account for Ninja’s “premium” as a celebrity and that, in kind, the example eSports streamer will not have the same magnitude of fame or notoriety. This resulted in the following assumptions:

Instagram: 43,050 followersYouTube: 75,338 subscribersSnapchat: 13,370 unique views per month

The Shopify benchmark data was then applied to these figures, with the assumption that there would be one sponsored posting on each platform per month. This translated to $430 per posting on Instagram, $1,500 per video on YouTube, and $500 per Snapchat story, for a total gross figure of $2,430 per month.

This figure at was reduced to $1,215 being handicapped at 50% to account for “vacancy”, on the assumption that sponsored postings would only be had every other month, not every month. It was then handicapped by another 50% to $607.50 to account for many of the follower bases overlapping between Instagram/YouTube/Snapchat, meaning that sponsors would likely not duplicate their promotional expenses across platforms to reach the same individual users, and have the possible effect of over-promotion which can negatively affect a campaign’s outcome.

Accordingly, it is predicted that product placement and sponsored posts will earn $607.50 USD per month.

Facebook is specifically excluded from this analysis as it has relatively low engagement levels among the younger audience that comprises the majority of the eSports fan base.

Twitch Paid Subscriptions

With it being known that Ninja has 19,492,440 views on Twitch per month4, and 160,000 paid Twitch subscribers7, it can be established that he has a ratio of 121.82 monthly views for each paid subscriber.

It was also determined that out of the $5.00 USD monthly fee for a Twitch streamer subscription, $2.50 USD is paid to the streamer, making the projected value of Twitch subscription earnings easy to determine8.

Financial Projections Research (cont’d)This was then scaled downward to the predicted monthly Twitch viewership of 40,000 views, by applying the 121.81 views:1 paid subscriber ratio, resulting in $820 USD per month in forecasted earnings (40,000 views / 121.82 – 328… 328 * $2.50 per subscription = $820).

The $820 figure was then handicapped by 30% accounting for Ninja’s fame as a factor that causes him to likely have a higher rate of subscribership than the average eSports streamer would. It was then concluded that the example eSports streamer would earn $574 USD per month from Twitch subscriptions.

References:

1 - http://fortune.com/2018/02/27/youtube-success-poverty-wages/2 - https://www.inc.com/minda-zetlin/even-youtube-stars-with-14-million-monthly-viewers-earn-less-than-17000-a-year-research-shows.html3 - https://www.shopify.ca/blog/macro-micro-influencer-marketing4 - https://socialblade.com/twitch/user/ninja (data collected Jan 17, 2019)5 - https://www.businessinsider.com/instagram-stories-400-million-daily-active-users-snapchat-2018-66 - https://techcrunch.com/2018/06/20/instagram-1-billion-users/7 - https://www.businessinsider.com/ninja-tyler-blevins-twitch-subscribers-fortnite-drake-youtube-2018-3#ninja-is-one-of-the-highest-paid-personalities-among-twitch-streamers-youtubers-and-esports-players-18 - https://www.forbes.com/sites/insertcoin/2018/03/09/fortnite-god-ninja-is-making-at-least-350000-a-month-from-twitch-subscriptions/#72300871140c