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GameStop is doubling down on its investment in surging esports industry

Key Points
  • GameStop announces a series of esports partnerships that deepen its foray into an industry projected to exceed $1 billion in revenue by the end of 2019.
  • GameStop wants to foster the Dallas-area esports community as well as to become the "Pop Warner" or the "local YMCA" for esports, GameStop CMO Frank Hamlin says.
  • GameStop's push coincides with the company's attempts to reinvent itself in light of the changing gaming retail landscape.

GameStop is leveling up its esports game.

The North American gaming retailer announced a series of esports partnerships Wednesday that deepened its foray into an industry projected to exceed $1 billion in revenue by the end of 2019.

The initiatives include gaming clinics for amateur players seeking a competitive experience as well as partnerships with some of the biggest esports teams in North America. Among them is the establishment of the GameStop Performance Center in Frisco, Texas, which will serve as the headquarters of Complexity Gaming, an esports team owned by Jerry Jones of the Dallas Cowboys and real estate investor John Goff. The 11,000-square-foot center will open in May and will share a location with the Dallas Cowboys headquarters.

GameStop wants to foster the Dallas-area esports community as well as to become the "Pop Warner" or the "local YMCA" for esports, said Frank Hamlin, GameStop's chief marketing officer.

"It's no secret that esports has evolved into a cultural phenomenon within the gaming community," he told CNBC. "As the place where video game culture comes to life in every neighborhood, GameStop is entering the space in a meaningful way to empower the amateur community."

A GameStop location with sign "We Buy Your Games and More"
Scott Mlyn | CNBC

The latest partnerships are hardly the gaming retailer's first foray into esports. In 2006, GameStop signed a multiyear deal with esports league Major League Gaming and partnered with Warner Bros. Interactive Entertainment more recently in 2017 for a fighting game tournament featuring the latter's "Injustice 2" title.

This time, GameStop's esports push coincides with the company's attempts to reinvent itself in light of the changing gaming retail landscape. Before GameStop concluded efforts to sell the company in January, the retailer had already been forced to close stores after being hit hard by digital sales.

The company last week named retail veteran George Sherman chief executive, the fifth CEO in just over a year. And despite focusing more on gaming accessories and boosting its rewards program, over half of the analysts on the Street who cover the company's stock rate it as a hold.

Nevertheless, Hamlin stresses that GameStop still has a footprint that allows it to grow the esports community and forge ahead with partnerships.

"Domestically, we have 3,800 retail stores for gamers that are within a skateboard ride of 85 percent of the U.S. population," he said. "We believe that by hosting esports gaming clinics and tournaments across our retail stores will give us an advantage with the amateur community. That's our role for our partners and our specialty retail advantage in the video game ecosystem."

Complexity Gaming founder and CEO Jason Lake also commented on GameStop's significance for the gaming community, emphasizing that the kind of exposure that GameStop can offer "can't be given by other corporate partners."

"I think GameStop is synonymous with gaming in North America, … and they're looking to modernize what they're doing across the industry," he said. "From our perspective, they're a better corporate partner as they're a partner that's been synonymous with gaming for so long."

GameStop will also be partnering with the Collegiate Star League to promote and establish college-level esports tournaments and events.

Shares of GameStop are down 20 percent year to date after the stock plummeted in late January when the company ended efforts to sell itself. The company is set to report earnings on Tuesday.