As a kid the idea of finding a way to monetize your expertise at video games was outlandish. The general gist of adult sentiment was the hours spent in front of the screen steadily improving my gaming acumen would have been better spent outside learning to swing a bat or chasing friends playing tag.
But I didn’t care. I’d found something I enjoyed that I was good at and wanted to be the best. Now imagine if I could monetize it?
If you’re old enough you might remember the Shinobi arcade game.
During the weekends hanging out with my grandparents as a kid, when I wasn’t swimming in the pool or watching Chuck Norris movies I’d be shaking down my grandparents for quarters so I could go next door to the convenience store and play the dusty stand-up Shinobi arcade game.
I was a fairly high energy kid and they were more than happy to give me five bucks for an hour or two of peace and quiet, and over maybe two years I must have thrown hundreds of bucks worth of quarters into that machine—honing my skills down to a fine point—where I could finally get through the entire game on one quarter. And then one man.
Naturally I got zero recognition for this. Video games were going to rot my brain the way candy rotted other kids teeth. It wasn’t something I was ever going to need as an adult. Why was I wasting so much time playing that game?
It’s a hard bit of logic to defy at the time. Esports was decades away. The movie The Wizard where Nintendo unveiled Mario 3 amidst today what would have been an esports competition was a fantasy, and if I was lucky, I was going to end up working at the mill like my father and my grandfather’s before. The existential dread was thick even as a kid.
None of that came to pass. I’m thirty years and a little under 2,000 miles away from my hometown.
Also, esports arrived on the scene and with it a company with a platform that could have seriously (and still might) reward crazy kids like me who prefer to compete against themselves instead of other people. My life would have been substantially different if I had a way to monetize the games I loved as a kid. But it’s probably too late for me now.
If you’ve got kids and they’ve got that bloody-minded devotion to be the best at something and that something happens to be video games, then allow me to introduce you to Tiidal Gaming (TIDL.C).
They’re an esports and gaming platform company that buys and operates businesses focused on gaming media and technology in the game ecosystem. They have two subsidiaries: Sportsflare and Lazarus. We’re going to get into both in a moment. They’re providing our kids with the opportunities we never had as young gamers by enabling competitive gaming.
Let’s talk about SportsFlare.
SportsFlare
SportsFlare is their chief product. The company picked up Sportsflare NZ in December of 2020, including intellectual property and an esports betting platform.
It’s the one they rely on the most to bring in the bucks. It comes with three different features, including a way to bet on yourself following your own progress through a game. The second being access to micromarkets—allowing the customer to go and bet where the action is to enjoying live betting options.
Actually, this might need a little unpacking.
Micromarkets are a brand new phenomenon. They’ve been made possible by speedy computers using artificial intelligence that can break down a given three hour game into multiple little sub-games, based on actions, activities and events that take place during the game.
If you’re playing a shoot-em-up you have a chance to bet on the outcome of the next in-game event based on a predictive algorithm.
Let’s talk about the Bet On Yourself option.
This probably wouldn’t have gone over well with me as a kid, because there’s just something unsavoury about monetizing your own progress as a kid. With money that probably isn’t yours. But as an adult it represents a significant amount of fun.
I don’t know about you but I’m generally just okay at most strategy based games. I win more than I lose, but my average is probably around .500 for the games I practice the most. That’s adequate for a closed environment with a set group of competitors—who’s moves I’m familiar with. I don’t have the time and energy needed to get obsessive like I did as a kid and my percentage drops to nearly zero when anyone can drop in.
With Bet On Yourself, if I were playing Starcraft 2 which is all I play anymore because I’m old, I can place bets on my performance and get rewarded for incremental improvement. Not only do I get to enjoy the Starcraft game, but I stand a chance of seriously monetizing my improvements (or gaining points towards rewards and prizes) if I beat certain metrics.
That’s an entirely new level of gameplay and could serve as a gateway into professional play.
That’s a pass from me. Like I said earlier, I don’t have the time and energy to devote to improving that sub-set of skills, but for some, it could be lucrative and enticing.
Lazarus
The esports brand and competitive team was put together in 2010, and have grown to become one of the highest earning esports teams in Canada. They’re 15th in North America and 32nd in the world. This is the kind of thing I would have chased after if I were a kid and Shinobi (and later Street Fighter II and Mortal Kombat) were options.
They’re also content creators and hosts themselves, producing the first ever North American esports gold tournament, hosting Fortnight, Forza, NHL and Call of Duty tournaments, to producing a Twitch live show called “Hot Wings Live.” This connected Canadian musicians, athletes and entertainers to their fans and communities.
Then there’s the progressive angle. My biggest competition when I was figuring out how to play Shinobi (and other games) was a girl named Carly. She was about three years older than I was and showed me a great many tricks on how to pass some of the stickier parts of the game. Anyone who blabs on about how girls are no good at video games gets either a laugh, eye roll and sometimes if I’m feeling jaunty, the sharp side of my tongue.
That being said Lazarus sports a strong metric for inclusion, with over a quarter of their team being female. They have an exclusive partnership with Shels—an initiative involved in getting more women involved in esports, sports and business, they’re aiming to grow that number.
What have they been doing lately?
Lately they’ve been all about expansion. They’re getting out to bigger boards but also applying for licenses so they can expand into more jurisdictions, and give betters a chance to get in the action.
Tiidal recently pushed their shares out to the OTCQB Venture Market under the symbol SIIDF as of April 11. They’re also applying for eligibility for book entry delivery and depository services from the Depository Trust Company (DTC) to be able to transfer their shares in the United States. The DTC makes the transition and sale of stock and cash easier and faster for investors. DTC eligibility will give the company’s investor base more convenience.
“Today’s news is an important milestone towards broadening our market presence across the United States as we engage with our increasingly global investor base,” said Tom Hearne, chief executive officer of Tiidal Gaming. “Listing on the OTCQB positions Tiidal Gaming with increased visibility among the American investment community and improved liquidity for our current and prospective shareholders.”
Essentially that’s a standard step towards functional growth, getting their shares out there on as many boards as possible to boost trading volume and enhance liquidity.
Before that, though, their Canadian subsidiary, Tiidal Gaming Canada, applied to the Alcohol and Gaming Commission of Ontario (AGCO) for their gaming-related supplier-manufacturer’s license, which would give Sportsflare the go-ahead to supply AGCO-approved sportsbooks in Ontario with their e-sports betting solutions.
This market is heating up.
Technically single-game sports betting has been legal in Canada since last summer, but it didn’t really launch in Ontario until April 4. A total of 16 gaming operators were up and running in the province according to Ontariobets.com, and more have since registered with the AGCO but haven’t yet pulled in agreements with iGaming Ontario.
The Numbers
With companies at this level there really aren’t a boatload of metrics to go on. There’s no price to earnings ratio (yet), no dividends to speak of, and there’s really only the question of whether or not company is going to grow in the future. If you get in at this stage to a company that’s in the early development part of its life cycle, then there’s a significant chance of monetizing a successful exit at a substantial profit.
The three big things to note about this company are their cash position, their relationship of assets to liabilities and their debt. Their cash position is strong at $1.6 million, showing off enough runway not only to keep the lights on but maybe look around and see if there’s anything else in the space worth picking up.
The assets and liability distribution favours assets considerably. Here’s the image from their financials with the appropriate metrics circled.
Note the timeframe. There’s only a handful of months between the column on the right and the most recent on the left. That suggests this company hasn’t been sitting on their laurels but have been setting goals and benchmarks for growth and beating them. That’s to be commended. It’s definitely a positive.
As the fourth metric to look for? Debt? Almost completely gone.
Overall the esports space has been kind of a disappointment. Equity Guru’s own Chris Parry turned me onto esports as the next big thing back in the early months of 2019. I was supposed to learn all there was to know at the time about the movers and shakers and brace for impact when all of the enthusiasm from the esports craze in Asia blew up here.
I’m skeptical by nature and this wasn’t any different. It never materialized. I remember my grandparents (and my parents) and the sentiment that video games were going to rot my mind and figured some of that would spill over and dampen the potential, and by and large, that’s what I think happened. But there’s still a huge contingent of people over here who are absolutely chuffed to get in on the ground floor of something like this
And while esports might only be a niche market, there’s still tons of money to be made here for the right person with the obsessive mindset.
—Joseph Morton
Full disclosure: Tiidal Gaming is an equity guru marketing client.
Leave a Reply