 Welcome to the wide world of eSports, a show devoted to all things eSports. I'm your host, Katharine Noor. Today, my guest is Jason McIntosh of GG Circuit. Our topic is eSports venues. We have a problem. Welcome, Jason. Thank you, Katharine. It's nice to be here. Thanks for having me. So what is GG Circuit? Well, GG Circuit has been around since 2008. We started doing nationwide tournaments with gaming venues, land centers, cyber cafes, whatever you want to call them. And they would do their local tournament on Saturday. Then we bring everybody together online and in a little internet chat room, and we do tournaments over the years. Now since then and since about 2014, we started to build software. So currently we do software services and support for over 600 locations around the world. Wow, that's incredible. I bet you've learned a lot along the way. I understand that you're writing a book. Yeah. So, you know, I think like anybody in their careers, there's different divergent paths you go. I've been anything from a web developer to a teacher to a professional wrestling referee at one point. So, you know, I got involved in eSports in 2004 with the brick and mortar locations. And we've been in every eSports scenario, I think that you can possibly describe and some that blow our minds who we have worked with over the years. So we've taken that expertise of not only providing software, but also providing consulting for these eSports venues. And we're putting them into a book on how to open an eSports venue. Oh, terrific. And that gets us to the venues. Now that a lot of the facilities are returning to have live events. What are you doing to assist them? Well, I, you know, I, the eSports world is awesome. And we are behind eSports 100%. But I think we've kind of taken a look back at our data. And we have realized, and this is, I wouldn't know if I would necessarily call it a truth bomb, but we have realized that eSports by itself as a brick and mortar business is not sustainable. We've looked back, you know, in our years since 2016 and granted, different locations have come along across the years, but we have serviced over 1000 locations since 2016 with our software. And only about 40% are continuing. So 60% of those 1000 are failing. And so what we're trying to do is offer up different ways for a business to succeed with eSports. I think there's too much emphasis on casual gaming and competitive gaming as a business. And that's it. When I think eSports needs to be a piece of the overall business puzzle where you're providing food and beverage, maybe you're providing other attractions in conjunction with eSports to make money. Doing things like birthday parties, doing things like summer camps need to be a part of the whole picture for venues to succeed more in the eSports space. You know, that really makes sense because if you look at other industries like restaurants, they're going to make a lot of their profit from alcoholic beverages. If you look at a movie theater, they're going to make profits from soft drinks. You know, I can see where there needs to be kind of some refinement of this process. And you know, so I know that you mentioned in an email to me, you asked a question. Do you feel like eSports is a dirty word? Okay, I don't know what your answer to that is. So I'm sure. Well, when people come to us, and we again, we service all kinds of people, we service universities, casinos, businesses and the traditional land centers as just to name a few. And I think the problem is that eSports is such a hot buzzword that it gets thrown in with a lot of different things. It's kind of like if you are a programmer in IT and your parents when you come home, they expect you to fix your printer just because you know you're in IT. Because eSports, when people come and ask us and say, well, how do I do eSports? You don't really do eSports. You just do modern gaming with PCs and consoles. But eSports is part of the vernacular now. And when people say eSports, we hope that they understand the whole picture. But a lot of times they just focus on the competitive aspect. And when you're talking about the entire landscape of gamers, competition only stands for like 10 to 20% of the entire picture. And there's too much focus on competition. And when you do competition, you have a lot more losers than you do winners. And I think that that does not bode well for people to come back to your space when all they remember is being wiped off a Call of Duty map in the first round of the tournament. I think we really need to look beyond competition and serve the whole picture of gaming again for venues to succeed. Sure. That makes a lot of sense. And tell me, what has been your journey to this space? Yeah. So when we started in 2004, and again, we are one of the few locations that have survived as long as we have 16 years now. Our entry into eSports was, our founder, Zach Johnson, was a youth minister. And he used to be part of youth group. And they started bringing in their Xboxes to the youth group. They started doing land parties, pretty much a 10 person youth group, and it started being 70 every Sunday. So he's an entrepreneur, he's done internet service providers and a few other things. And so that's where his entry into eSports came to build a business of brick and mortar, land center, snacks and drinks, tournaments, and all kinds of different things. As we have grown, you know, we've tried to do other locations. And I think for a successful business owner with one location, it's hard to clone yourself sometimes to do other locations. We've never had another location that's been a successful as the one that's in his hometown. And so going beyond that, you know, we used some management software for 10 years. And I won't name the competitor. But at the end of the day, we felt like we could do more and better things to engage the players through software, as well as provide quality management software, as well as provide what we would call diskless boot software, just to make a venue more efficient. And so we went from and we still do the land center to this day, but we went more from the land center experience to providing software. And now that we've been doing this for 16 years, we also have a dedicated team that's been involved in this for 10 years, that does everything from startup consulting to being on site and implementing it and daily updates of people's software so that they don't have to worry about it. You know, it takes us very special individual with a lot of skills to run one of these locations. And oftentimes it's a skeleton crew of the main owner and a handful of minimum wage employees. And so when you've got to be, you know, the accountant, the marketer, the web designer, the technologists, the hosts, and everything in between, I think that's why a lot of these folks fail because it's unforgiving. I think for a long period of time to be able to keep one of these going, sometimes it's just you and it's hard to find somebody as dedicated as you. Have you seen like eSports venues franchise in yet? And what would make for a successful franchise? Yeah, that's a good question. I think a lot of the things that I'm already saying in regards to, you know, adding in food and beverage, maybe making it a bar scenario, just these different things that I'm saying about not making it an eSports place, but making it so that you cater to a wider band of demographic versus just competitors. Just to name a few, there are there is contender eSports is out there. There's nerd street gaming that are doing locations. There's Vindex now with the belong model. I feel like there is there is Play Live Nation under the simplicity umbrella. All four of those are doing franchising, but I think it's too early in these franchise models for us to be able to pull numbers like we have in our overall history to know whether or not those are succeeding. Sure. Okay, so let's look at the prosperity part of this. What are the keys and how can GG Circuit help make that happen? Yeah, absolutely. So again, we're big believers in being transparent and we're big believers in evaluating what we have done and what works. So when I'm talking about catering to a wider demographic, we've come up with five categories of gamers and we call these the five C's. And why we have come up with this is this is for venues to get out of that just catering to competition and trying to find ways to cater to everybody across the gaming landscape. Those five C's are the consumers. So those are the casual gamers, the people that are on Twitch, the people that are watching YouTube videos. It's community. It's those people that like to be on Discord talking to other gamers on the Twitch chat talking to each other. And those are also the people that are going to build your gaming nights. Well, it's kind of like a gaming club around a specific game. We have the collectors. Those are those folks that just grind away on a game because they love badges. They love achievements. They love getting skins in a new game. Creators. Those are the streamers, the people that are build video content, are the influencers, are the game developers. And then finally, the competitors. So that's that small band of folks that want to come in for tournaments all the time. But we're hoping it's more of a, you know, a for fun activity or, you know, just a way to come in and get a little trinket that they, you know, a trophy, a medal, something like that versus trying to provide a big prize pool or something like that that might turn somebody off. So again, eSports needs to be the piece of the pie, not the focus, but we need to cater to the entire landscape of gaming versus just a small percentage. How can mainstream businesses get into eSports? Yeah, so I didn't go back and do the numbers before this interview, but we just reached our 100th university that uses our platform. So we've got a lot of data around universities and why they're getting into eSports. There's various reasons. You know, there's scholarships now, there's eSports teams. There's a few models out there that are charging students or they're opening it up to the public to get people in. And that's working, but I think more and more they're offering it up free as a way to get our life from tuition. So what we're trying to do from a mainstream business perspective is we're offering up two packages. Number one, we are going out and we're sourcing the PCs, the desks, the chairs, the server hardware, the software setup. We're sending our team to go and set it up and providing daily maintenance. And we've done the numbers there and it takes about 25% to 30% of daily work off of a manager's plate. And that's a huge boon for them because they can, a lot of these folks are business visionaries or they love the business part more than they love the technology. So if they can get that off of their plate, that's a huge way for them to focus on marketing, advertising, getting people in the door versus a fortnight patch dropped in the middle of Thursday and I got to focus all my attention on getting all my PCs up to date. So we're providing that as a way to, I mean, it's also a ramp up, like it takes six to eight months to get comfortable with this type of business. So for us to have 16 years of experience and drop that time factor of getting ramped up and being able to have someone to answer your questions immediately, I think that's another huge positive for these folks. The other thing that we're doing, and this is inside baseball, Catherine, you're getting the scoop here is November 15th, we are announcing a, what we're calling an arcade eSports attraction. And so this is going to be a lot like a pop a shot or a ski ball that can be dropped into 500 square feet in a bowling alley or a movie theater or a co-working space, you name it. And we are piloting this in multiple locations right now where it will be self-service. The only thing you have to do is monitor that the hardware doesn't walk away. It will be an hourly competition just based on on game participation. There will be lighting and visual guides for on the tables pointing out the player who has won. And they'll be able to redeem that for digital gift cards for popular brands up to about 75 brands. And basically we want to change the model from focusing on competitors to just those kids that want to come in and do a quick play blank while mom is shopping. And so it's a brand new, I would call it a paradigm shift in the way that venues are looked at just to have a fun way to participate and be rewarded just for playing about an hour. Oh, that sounds terrific and exciting. Well, you know, everyone in businesses, their experience has been pre-pandemic. And then now we recently have people who have experienced with pandemic business. What will be the differences that you foresee post-pandemic, if any? Well, what I see especially in the eSports venue space is that there are a lot more companies coming to us than mom and pop independent locations. I think there is going to be a large amount of big brands. I don't want to specifically say but family entertainment chains, electronic stores, telecom giants that are wanting to put eSports in in this small footprint of what we're talking about here, just as an added attraction to their overall revenue-generating business. From a pandemic standpoint, we survived. I mean, a lot of people didn't and obviously we're providing software for entertainment-based locations. So movie theaters were hit hard, we were hit hard. What we did was we did a quick pivot to do an at-home version of our software in that you had to download a client, but it was a way for our locations to still stay connected with their gamers. But what we found out was these gamers are coming to their locations because they don't have a high-end end setup. And although we did get decent participation in our at-home client, we were surprised at the lower numbers. So I think if you're in a pandemic and in a situation where you can't get out, it's very hard to convert gamers to download a client and install something that tracks stats or whatever. And so it will be very interesting because some of our locations are still having to social distance. They can't have a PC up against another PC in their square footage, so maybe their PC usage is half of what it could be. But with the companies being able to bankroll this, with social distancing and hopefully more people being vaccinated and social distancing waning a little bit, we'll see with any new variants is still a risk. But I can tell you we're seeing about 20 to 30 demos a week of our software. And so there's no lack of people wanting to get in this business and try their hand at having eSports in a physical location with people being next to each other playing. And you can say what you want about people wanting to be in their rooms playing online with their headsets, but it's just like, why would I drink a beer at home when I can go to the bar with my friends and hang out? eSports and gaming, it's the same thing. Like I can play with my friends, but there's nothing quite like the substitution of being able to punch a friend in the arm because he did something stupid during your match and you're sitting right next as well as teams that want to develop and practice together, learn body language and subtle cues and there's no substitute for that. Sure. And so we have some images and I'd like to kind of go through them and have you tell us about these particular venues because it's, we've been talking about venues, but it's kind of fun to see what they look like. So we'll start with the blue one. I can't remember what it is. Yeah, so I think Bendix Arena. Bendix Arena is a brand new, well it used to be the college football hall of fame in South Bend, Indiana that is the home of Notre Dame football and that closed down probably about five years ago and so the city of South Bend took it upon themselves to embrace esports. So they hired our team to come out and set up everything from soup to nuts and they have two facilities. One is a land center like you see in this picture and the other they have an actual auditorium where they're going to do a lot of larger scale tournaments that will bring in a crowd. So it's a very interesting setup and the city of South Bend is one of the cities that we have supported, one of the few that we have supported that's been like the, you know, the board of the city has passed this as a way to embrace gaming and esports for the future. Yeah, Bethel College also plays there as their practice facility. All right, let's look at the high school one that I guess CBC High School. Yeah, this is Christian Brothers College High School in St. Louis, Missouri and we installed them I think February of 2020. So right before the shutdown and they are a private school. They did a survey of their students or potential students, junior high students and 70% of them came back and said if esports was offered at the high school they would want to come to CBC. So they are using it as a casual space but mainly for their esports teams and at the time we installed this, this was the largest high school esports installation in the country. Wow, okay, let's look at Bendix, I believe. Yeah, we just did that one. Oh, we did. Okay, the next one then, Helix? Yeah, Helix Esports. So I failed to mention they'll kill me for this but in June we were acquired by a publicly listed company called Esports Entertainment Group. Helix was a partner of ours before we were acquired and Esports Entertainment Group acquired us along with Helix Esports. So Helix has three main locations right now on the east coast, one's in North Bergen, New Jersey just over the bridge in New York. Another one is in Patriot Place outside of Gillette Stadium in Boston and the third they're going to be opening up at UCLA's campus and they have two of the largest locations for an esports venue both with 100 PCs as well as a bar as well as a restaurant offers. Oh, wow, that's terrific and then the next one maybe one we haven't looked at. Yeah, so this was GenCon I believe 2017. For five years we were the esports room at GenCon and this was the last year we did it and we saw 10,000 people in four days. We had 250 stations for people to play games at. We garnered about 50 grand in revenue in those four days as well as we ran 5,000 events. Now a lot of these weren't your bracketed tournaments they were you know impromptu tournaments like we were talking about there are a lot of random we'll grab five random people here and five random people here and put them in a League of Legends match together and we gave out trophies and medals and it seemed like every year the same people would come want to come back because they wanted to get that year's model of medals and trophies and competitions and so that's what we've catered this esports attraction I'm talking about after is our experience at GenCon. Okay so we've talked about challenges with esports and the venues but do you are you optimistic about esports or do you feel pessimistic about the business at this point? I feel absolutely optimistic even though I just want to call out the issue of those thinking that hey I'll just set up a bunch of PCs and I'm going to make a bunch of money and I want I just want to warn businesses that they need to think beyond just gaming when they're thinking about a business because it's been proven not to work. I think that one day we hopefully will be there where people can just you know do computers and have tournaments all the time and esports can be sustainable but it's not ready yet so until it is ready they need to do more things to bring in revenue outside of just gaming. I have no doubt in my mind that esports is going to be the next big thing because of the companies that are coming to us the universities that are coming to us we're now getting into the casino space and there's a lot of opportunity for those businesses that haven't yet tapped into esports but I just want more people to know that A we exist we can help them ramp up and get their doors open faster, B esports by itself is not going to work you got to do do do something else and then and then three you know don't just look at the end of your nose and think that that's it make sure to make connections in this industry with other land centers with other gamers be open to communities coming into your space don't try to be elitist just because it says esports on the door because a lot of times players will get turned off because it says esports because they think it's only competition make sure to open yourself up to the video game demographic. You know that's really wise advice and let's look at how people can find you let's look at your website and I think that that's a wealth of information. Yeah so I don't know like when this will be out but ggcircuit.com is the website where it's kind of the the launching point of all of our stuff related to our software and our consulting services. We will be doing a university based webinar on November 9th for a group called ACUI which is the College Union Association. We will be you know I was talking about the esports attraction we will be at IAPA which is the amusement convention in in Orlando it's an awesome place people like video games virtual reality acts throwing they even have like roller coasters in there that's where we will be announcing our esports attraction and then as you mentioned at the beginning of the video there's a website that we have out there called that esportsbook.com and we will be shipping out books December 1st once we finalize the book and get them out all printed but it's all about how to start an esports venue and taking our 16 years of experience putting it into a book and hoping that it helps someone along the way. Fantastic well Jason you've provided a lot of great information to us today and I hope people will look for a ggcircuit and get find your expertise from your book and in person. Awesome thank you Catherine for having me it's been a pleasure. All right thank you and thank you to our viewers for joining us today next week. My guest will be Steffi Bauev in it esports see you then.