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Nerd Street Gamers first esports campus opens in Center City Philly

The start-up, funded initially by SeventySix Capital, is riding the gamer trend.

Nerd Street Gamers' new headquarters and esports arena opens Nov. 13 to the public at 401 N. Broad Street.
Nerd Street Gamers' new headquarters and esports arena opens Nov. 13 to the public at 401 N. Broad Street.Read moreNerd Street

Philadelphia’s video gamers finally have a place to call their own — a 35,000-square-foot campus with a public space for 780 people, corporate headquarters, a broadcast studio, and gaming space.

On Saturday, Nov. 6, Nerd Street Gamers formally opened The Block, its esports and gaming campus at 401 N. Broad St., with a major tournament starting at 11 a.m. About 400 people preregistered, and an additional 200 are expected. The public is invited on Saturday, Nov. 13., and can walk in or sign up ahead of time online.

The Northeast Championship marks a return to offline tournaments — that’s gamerspeak for in-person — at Nerd Street’s new spot in Center City, with competitions in Guilty Gear -Strive-, Soulcalibur VI, Street Fighter V, Tekken 7, Mortal Kombat 11, and more. The Soniqs, a pro team from central Pennsylvania, will also be playing at the space.

If you’re a video gamer — or the parent of a gamer — you’ll likely have heard of Nerd Street, led by Philly entrepreneur and CEO John Fazio. Founded in 2016, Nerd Street Gamers is aiming to capitalize on the growth of esports, watching highly skilled gamers compete for titles or prize money in stadiums, which has soared in popularity worldwide. The company has grown to about 100 employees and is about to open its ninth facility this year.

Behind Nerd Street are investors Wayne Kimmel and the venture firm SeventySix Capital, a Conshohocken-based sport betting, esports, and sports tech investment firm, that he cofounded. It has invested in VSiN, the sports betting media network, which was sold to Draftkings (Nasdaq: DKNG) and in Vigtory, a next-generation sportsbook betting firm sold to FuboTV (NYSE: FUBO).

Other investors in Nerd Street are Comcast Spectacor, owners of the Flyers, Wells Fargo Center, Philadelphia Fusion, and T1 Entertainment and Sports, an esports partnership between Comcast and SK Telecom in South Korea; Five Below (NASDAQ: FIVE), the high-growth value retailer for tweens and teens with 1,100 stores in 39 states; and Founders Fund, the venture capital fund that invested in PayPal, SpaceX, Palantir, Airbnb, Stripe, and Facebook.

Comcast Spectacor formed a partnership in 2019 with the Cordish Group and announced plans to build a 3,500-seat arena in South Philadelphia for the Fusion. A ceremonial groundbreaking was held, but Comcast Spectacor put the $50 million project on hold after the Overwatch League suspended live competition during the pandemic.

For those who aren’t familiar with SeventySix Capital, the venture capital firm invests in sports betting, esports, and sports tech start-ups. Other public companies that have acquired SeventySix Capital’s portfolio companies include Aramark, Intel, IBM, Walgreens, and Yahoo.

SeventySix Capital was one of Nerd Street’s first investors.

So how does Nerd Street plan to make money? Kimmel wouldn’t disclose any revenue or subscription numbers.

“There are several revenue streams,” said Kimmel. “This campus not only serves walk-ins to play games and compete, but also houses professional teams, collegiate teams, a home base to train, and offices of Nerd Street on the fifth floor.”

For tournaments, player fees cost $80 to $100, spectator fees $50, and prize pots start around $1,000 per game, depending on how many players enter. “Fragadelphia” Major and Super Smash Brothers tournaments will take place at The Block later this month. Nerd Street also conducts summer camps and coaching sessions.

Video game publishers, such as Riot and Activision Blizzard, pay Nerd Street to put on tournaments around the country. Not unlike racing cars, gamer chairs are sponsored by companies like BMW, Tumi, and the U.S. Army. “They pay to have their chairs in our facilities,” Kimmel said, bringing in advertising and sponsorship revenue.

The endgame for Nerd Street?

“The dream is for us to be a public company,” Kimmel said. “That’s not the end all-be all. It’s to be gaming and esports accessible to all, and also to allow anyone to play on the best equipment the pros play on, along with having the fastest internet connection.”

He wouldn’t comment on when Nerd Street will be cash-flow positive or profitable.

“We’re in high-growth phase,” he said. Nerd Street wants to expand to major sports cities, with its next facility set to open in Los Angeles.

Does this mean Comcast’s gamer arena, long delayed, might not open? Comcast Spectactor owns the Overwatch franchise Fusion. The company, part of Comcast Corp., planned to invest tens of millions of dollars in esports and announced construction of a $50 million esports arena near the Wells Fargo Center. But the company hasn’t disclosed whether the arena is a go.

“My understanding is that the arena is currently on hold,” Kimmel said, although he declined to comment on specifics. A spokesperson for Comcast didn’t immediately return requests for comment.

For SeventySix Capital, the Nerd Street investment is just the latest in its evolution as an early-stage investor in electronic sports, typically a “few hundred thousand to one million dollars,” he said.

“What’s happening in esports is similar to what happened in the 1990s with consumer internet start-ups. Will DraftKings be the Google of sports betting? Or a company we haven’t even heard of yet?”