In the early morning of March 15, 2018, Drake tweeted a link to a Twitch livestream, where the hip-hop superstar was playing Fortnite with professional gamer Tyler Blevins, who goes by “Ninja.” Over the next few hours, the two would be joined by Travis Scott and Pittsburgh Steelers wide receiver Juju Smith-Schuster and attract over 625,000 concurrent viewers, breaking Twitch’s all-time record and making news on CNN and the BBC and in The Washington Post.
For Lee Trink, “That was the shot heard ’round the world.” The former label executive (Lava, Atlantic, Virgin and Capitol) and artist manager (Kid Rock) had spent the prior two years trying to convince his contacts in the entertainment world of the opportunities in gaming, largely without success. “That moment really forced people to reframe how they look at gaming in two ways,” he says. “The fact that somehow people playing video games had an audience of nearly 700,000 people at the same time watching; and the fact that these guys would think so highly of a gamer that they would publicly align themselves with him.”
While Trink saw an “aha” moment for gaming in general, he also recognized a more immediate opportunity to sell the story of FaZe Clan, the gaming and esports collective that he had been consulting and joined as co-owner/CEO in September 2018. FaZe Clan was founded in 2010 by a group of gamers who specialized in “trick-shotting,” or finding creative ways to shoot people in Call of Duty, which they would record and upload to YouTube branded as FaZe ILLCAMS. “It’s almost like skateboarding, but within Call of Duty, where you would jump off a building and do tricks as you were falling,” says Thomas “FaZe Temperrr” Oliveira, one of the organization’s core members. “We turned these videos into something like mixtapes — people would look forward to these every week — and they started getting tens of thousands, then hundreds of thousands, then millions of views early on.”
Over the past decade, FaZe Clan has grown from posting ILLCAMS on YouTube into a cultural phenomenon among the gaming set, which is fast becoming more than a network of teens in basements with nothing better to do. The gaming sector has ballooned so much that market-analytics firm NewZoo projects revenue to approach $160 billion globally in 2020 — up more than 9% over 2019, with 2.7 billion players worldwide — and $1 billion of that is esports. That’s larger than the combined value of the global film industry ($101 billion in 2019, according to the Motion Picture Association), the global recorded-music business ($20.2 billion in 2019, according to IFPI) and the global live-music market ($25 billion, according to Billboard estimates) — and given that gaming is already online and often stay-at-home, its value is largely pandemic-proof, too. By 2023, NewZoo projects revenue to surpass $200 billion and users to top 3 billion. The numbers are heady, though due to the relative youth of the online gaming and esports industry and the influencer-centric nature of collectives such as FaZe Clan — where all members are not equal — some potential investors aren’t fully sold on the business model.
FaZe Clan has grown from 30 members to around 85 in the past year. About half are professional gamers; the other half are content creators (streamers, vloggers and more), while celebrity members — athletes like Smith-Schuster and artists like Lil Yachty, who aren’t compensated — round out the roster. FaZe Clan streamers and content creators have individual contracts similar to a recording artist’s management deal, with the company taking a set percentage of revenue generated by brand partnerships or YouTube ad revenue, while its esports gamers have salaried contracts more akin to those of professional athletes. (Additionally, a small number of FaZe Clan members are shareholders in the company and receive a share of revenue that way.)
Iovine: ‘They Have All The Things That I Find Fun’
FaZe Clan is nevertheless working to capitalize on the industry’s robust growth, as gamers become superstars in the new livestreaming era. In December 2019, FaZe wrapped a $47 million Series A funding round — a combination of equity and a debt facility, which it announced in April — at a $250 million valuation led by Jimmy Iovine and ecommerce company NTWRK. The round also included music executives Troy Carter, Sylvia Rhone and Guy Oseary and artists Offset, Pitbull, Swae Lee and Yo Gotti among its investors — signaling a new focus on the music business as the FaZe Clan’s next frontier.
A combination of digital content hub, esports collective, sponsorship brand and apparel business (each of which accounts for about a quarter of revenue), FaZe Clan and its members have amassed over 230 million followers across their social media platforms, with the collective itself counting over 8 million subscribers to its YouTube account. Its lifestyle videos and gaming clips regularly rack up millions of views in a matter of days, while many of its members attract nearly that many subscribers apiece on their own individual pages.
“I see it, holistically, as a new idea,” says Iovine. “They’re content-makers, they’re personalities, they’re athletes in a certain way, they play live. They have all the things that I find fun.”
Gamers are also increasingly proud of their hobby and no longer keeping their gamer identities secret, helping fuel the group’s popularity. “At first it might have been kind of nerdy for certain rappers to talk about it or showcase it, but more and more every day rappers are starting to come out playing games,” says Lil Yachty, who was officially inducted into FaZe Clan in December 2018 during his set at the Rolling Loud festival in Los Angeles, at which FaZe members threw limited-edition FaZe Boat T-shirts into the crowd. “I guess they saw how lucrative and how popular the gaming world is. I haven’t made much money off of gaming, to be honest, but I game regardless. It’s just all I do. I don’t club, I don’t drink, I don’t smoke, I just play games. It’s just my life. It’s always been that way.”
Describing FaZe Clan in simple terms leads to a variety of different answers. Trink often refers to it as a hybrid of the Los Angeles Lakers and hypebeast apparel brand Supreme, with the cultural cachet among devotees of MTV at its height. Iovine says “they’re somewhere between a basketball team and a rock group”; Carter says it reminded him of the “Wu-Tang Clan or the A$AP Mob, and what they were able to do culturally.”
In some ways FaZe Clan is also what today’s major record companies aspire to be: a global entertainment behemoth with superstar artists on its roster, a massive marketing apparatus and an arbiter of cool that extends into music, film, TV, merchandise and live events. With platforms like Twitch — which essentially has made music a second vertical on its platform — and Steam playing the roles of streaming services, and games like Fortnite serving as the concert hall, the gaming world begins to look a lot like the music business as whole.
“We’re all influencers,” says Offset, who was first announced as an investor in August 2019. “Before [the coronavirus], a gaming competition was selling out a whole arena — 18,000 or 20,000 people with more still outside. It’s up there with music when it comes to success and numbers.”
FaZe Clan’s connection to music dates back to its early days, when members would find music on YouTube or mixtape sites like Datpiff and seek permission from the artists to use their songs in their trick-shot videos. The group put Macklemore & Ryan Lewis’ “Thrift Shop” in an early clip well before the duo’s Grammy Award-winning apex, and played an early role in the career of Def Jam rapper Logic, who wore a FaZe Clan hoodie in the music video for his 2012 song “The Spotlight.” “We put some of the scenes where he was wearing the hoodie into our next ILLCAMS, which was our bread and butter series at the time, and fans went crazy,” recalls FaZe member Temperrr. “They saw this crossover that had never been done before, and it was just special. No other gaming team was doing this.”
A $30-Million Hollywood Hills Clubhouse
Two years later, FaZe Clan’s collaborations include partnerships with the NFL, the Los Angeles Kings hockey team, England’s Manchester City soccer club, Burger King and Nissan. Those deals have brought increased attention — and helped finance a $30 million mansion in L.A.’s Hollywood Hills, where several members live and game. Capsule and merch collaborations with Supreme, Champion, Offset and Juice WRLD have become sought-after collections, selling millions of dollars worth of items in hours. And new deals with the likes of Verizon and Beats, among others, has FaZe Clan on track to boost its revenue 50% year over year in 2020, even amid the pandemic.
Musicians and actors have traditionally ranked at or near the top of the entertainment food chain, while gamers and social media stars have been viewed as bottom feeders. The success of Faze Clan and the growth of the gaming industry threatens to upend that hierarchy. “Rappers can shoot a $50,000 professional music video and not clock 3 million views in three months. But these kids can do that in six hours,” says Peter Jidenowo, who managed Juice WRLD before the young star’s sudden death in 2019 and worked with FaZe Clan on an apparel collaboration in support of Juice’s July 10 posthumous album, Legends Never Die. That is why, he adds, “it’s also important that gaming and music culture bond.” The way that gamers like FaZe Clan were using music in their YouTube videos “was TikTok before TikTok.”
While it’s not possible to make a direct correlation between FaZe Clan’s use of Macklemore’s “Thrift Shop” in one of its ILLCAMS videos and the song’s chart, sales and streaming performance, it’s worth noting that the single, which debuted on the Billboard Hot 100 at No. 96 on Sept. 15, 2012, had fallen off the chart by Oct. 12 when the ILLCAMS clip that featured the song was posted. For the week ending Oct. 14, “Thrift Shop” generated 308,000 on-demand streams — a 100% increase from the week prior — and reentered the Hot 100 at No. 96 for the week ending Oct. 27. (The single went on to spend four consecutive weeks at No. 1 beginning Feb. 2, 2013.)
And the marketing possibilities of FaZe Clan for artists are also beginning to materialize. On July 6, Interscope revealed that the new Juice WRLD album would be released that week, an announcement that arrived alongside the unveiling of FaZe Clan’s merch collaboration, which was bundled with the album. Legends Never Die debuted at No. 1 on the Billboard 200 with 497,000 equivalent album units, according to Nielsen Music/MRC Data — the biggest week of 2020 so far — including 209,000 in sales, powered by over 100 merch bundles, including the FaZe Clan offering.
Carter, whose son introduced him to FaZe Clan after consulting for the company, agrees that music and gaming “go hand in hand,” he says. “But I don’t necessarily think gaming needs music as much as music needs gaming.
“I just feel like the market opportunity [in gaming] is so much bigger; the fans are much stickier,” he continues. “It’s something that people come back to on a daily basis. Artists will put out albums and they’ll reach anywhere from 15 to 20 percent of their core audience, and that’s with some of the biggest superstars out there.”
‘Imagine If The Entire World Of Music Fandom Were Musicians’
It’s a concept that Trink hits on repeatedly when trying to explain the appeal of the gaming fan base to outsiders: Almost every single person who consumes gaming content — who tunes in to a livestream, watches a YouTube video, sports a hoodie or buys a ticket to an event — is a gamer too. So they’re likely to be more invested than a nongamer would be. “Imagine if the entire world of music fandom were musicians,” says Trink. “How much more energy would that put into every single thing that the music industry does?”
It becomes, then, a case of two complementary verticals trying to find ways to learn from, and build off, each other. The gaming community has a level of engagement and passion that the music industry covets, as well as a monetization model — built on free-to-play access and in-game purchasing — that continues to grow over time. The music business has the global reach, resources and superstar-making apparatus that a company like FaZe Clan needs to get to the next level. Gamers are using music to enhance their videos and streams, supporting artists and labels along the way; artists are increasingly showing their love for gaming in a variety of ways, breaking stereotypes and helping elevate the term “gamer” to the level of “artist” in mainstream esteem.
“Music is the one entertainment vertical that most naturally has interplay with every other part of the entertainment mix, and gaming feels the same way,” says Trink. “So the script tends to write itself once you put yourself in a position to collaborate.”
That has helped to bring the music business to the table. While deals between FaZe Clan and the labels have thus far been one-off collaborations — Interscope is part of the Juice WRLD merch deal, for example — conversations surrounding live events, virtual reality content, films and documentaries, and additional merch collaborations are ongoing. FaZe Clan recently inked two film/TV deals, for instance, including one with film/TV producer Michael Sugar’s Sugar23 outfit (13 Reasons Why) to create FaZe Studios, a production house aimed at making films and shows that can compete with traditional studios. Trink sees the sweet spot as “joint IP creation” — or, as he puts it, “showing up to the party, looking at each other’s assets and saying, ‘How do we collaborate with these in a way that’s powerful to our respective fan bases?’”
FaZe Clan isn’t the only gaming collective looking to bridge the gap between gaming and culture and bring the music business into the fold. In October 2018, Drake and Scooter Braun bought into esports/lifestyle brand 100 Thieves, with an eye toward occupying a similar space as FaZe Clan, though at the moment its footprint is much smaller. Twitch recently announced that early FaZe Clan fan Logic had signed a reported seven-figure exclusive deal to stream both music and gaming content for a set number of hours per week.
But for all the excitement around gaming and esports, there are some open questions. Gaming’s influencer model, which lives and dies with the popularity of individual gamers and celebrity acolytes, makes some investors wary. And NewZoo CEO Peter Warman said in 2018 that profitability in the sector represented “a challenge,” with the amount of return on investment that those underwriting gaming collectives and esports teams can expect remains unclear, given gaming’s big budgets.
Unconscious Bias Training, Diversity And Inclusion
FaZe Clan is also busy developing its internal culture as it grows. In July, when former FaZe president Greg Selkoe (who left the company months prior) announced the launch of a new gaming collective, XSET, aimed at an inclusive roster and culture, he told The New York Times that many gaming collectives “sort of resemble a frat house.” (FaZe head of business development and top musician dot-connector Clinton Sparks and president of apparel and special projects Wil Eddins left to join XSET.) FaZe Clan, says Trink, welcomed its first female member in 2019, formed a diversity council earlier this year, put its gamers and employees through unconscious bias training, created programs for underrepresented youth and has “moved diversity and inclusion to the forefront of our priorities,” including focusing on recruiting diverse talent.
During the pandemic, FaZe Clan has led a series of Call of Duty tournaments under the banner #FIGHT2FUND, bringing together such artists as Luke Combs, ScHoolboy Q, Alesso and Nav with athletes JD Martinez, Ben Simmons and members of the Los Angeles Kings to raise over $100,000 for organizations like Save the Children and UNICEF in four weeks. In May, Atlantic Records signed 21-year-old rapper Rozei after his song “Ooo La La” was featured in a number of Fortnite gamers’ YouTube videos. Members of FaZe Clan produced, directed and starred in the subsequent official music video for the song.
“A lot of times I think about it as manifest destiny,” says Trink. “What other entertainment properties can we bring to our vast audience? Where can we go?”