(Courtesy Nerd Street Gamers)
When John Fazio, founder and CEO of Nerd Street Gamers, began throwing gaming parties at his software engineering firm in the early 2010s, the concept of a solid esports industry was mostly just a dream.
Fazio grew up an athlete, playing semi-pro soccer around the world during school, thanks to his parents (and a healthy dose of privilege, he said). He learned to code early, and along with Chris Alfano in 2006, created a business plan for a digital arena to bring their hobby, gaming, to a place where gamers could compete, watch and cheer.
“We failed to raise capital there, but it catalyzed me to start Jarvus,” the founder said.
Fazio and Alfano bootstrapped the Northern Liberties-based dev shop Jarvus Innovations, on North 3rd street in Northern Liberties, part of the affectionately called “N3rd Street” — a community and collection of Philly’s tech scene stretching from NoLibs to Old City.
In the early 2010s, Fazio and Alfano started inviting friends and members of the local tech scene to the Jarvus HQ for gaming parties.
“We just drank and hung out and played video games,” Fazio said. “Basically we were doing a version of what I pitched in 2006.”
After seeing the scene play out in real life, the founder decided to incubate the idea at Jarvus, stepping up the gaming parties and ensuring that the model and economics for the startup made sense, Fazio said. The location became a Localhost arena, a space for gaming competitions to thrive and a scalable model for locations around the country.
In 2017, SeventySix Capital invested in the startup, making those scaling plans possible. They wanted a leader, Fazio said, so he decided to step in as the company’s CEO.
“It was a tough transition to go from software, where you’re working with a million different businesses, to becoming CEO of a video game company,” he said. “But it became obvious that it could be much bigger than just video gaming. We could become a platform for modernized retail.”
Shortly after, investments from Comcast Spectacor and Five Below followed. Nerd Street Gamers expanded its presence with Localhost, its brand of facilities in Philadelphia, Denver and Huntington Beach, California, for competitions, gaming boot camps and streaming events. The company recently added facilities in the Wells Fargo Center. Then came a deal to add Localhost facilities, and the state-of-the-art gaming equipment that most can’t afford to install at home, into select Five Below stores.
In the last two years, Fazio said, the company added about 30 full-time employees. In just the last few months, it added about 20 more, bringing the headcount to about 50 full-time and about 100 contracted employees.
Eventually, Nerd Street Gamers went from taking up a portion of the Jarvus office to taking over the office, and some space at the adjacent WeWork Northern Liberties. Pretty naturally, Alfano said, Jarvus moved to a remote workplace, which was in the DNA of the software company from the start.
Alfano said there’s been a handful of times over the years that he’s realized Nerd Street Gamers had legitimate clout.
“For me personally, it’s really interesting, it’s exactly what my dream and obsession was in high school come to life,” Alfano said.
One of Nerd Street Gamers’ major hiring decisions came in Matthew Johnson, the company’s lead designer. Johnson revamped some of the company’s look when he came on in January 2018, adjusting the brand’s signature green and giving the overall look a bit more professionalism.
At the time, he said, things were busy like any other startup.
“We couldn’t even imagine what could be bigger,” Johnson said. “When I joined, we didn’t really have an office. People would show up in jeans or sweats. But less than a year later we were wearing suits to go to meetings at Wells Fargo.”
As the company expands its Localhost locations, one of Johnson’s main tasks is making sure that each Localhost feels true to the brand. And as the brand extends throughout the country, the company is also focusing on bringing in a wider range of gamers, he said.
To Fazio, a competitive gamer has always been a type of athlete. But it was getting others on board with that mentality that was the hard part. Luckily, he wasn’t the only one to feel this way.
Big brands, like Comcast Spectacor added legitimacy to the industry over the last few years, creating the Philadelphia Fusion, Philly’s pro Overwatch league, and breaking ground on an actual esports arena, coming to the Philadelphia Sports Complex in 2021.
Those competing in esports tournaments are now earning more in prize money than some traditional athletic competitive competitions, like the Tour de France, or the Kentucky Derby, the Washington Post reported in 2018.
In September, Philly hosted the international Overwatch League Grand Finals. Dave Scott, chairman and CEO of Comcast Spectacor, which owns the Wells Fargo Center, called it a “Super Bowl moment” for the city. A few weeks later, the Comcast Spectacor launched a joint esports venture, T1 Entertainment & Sports, that operates in Philadelphia, Los Angeles and Seoul.
At the end of last year, NBC Sports Philadelphia jumped on the promotion wagon, running a 10-episode series on the rise of the industry, featuring the Philly Fusion and Nerd Street Gamers, who produced it.
And, oh yeah — literal pro athletes are turning into pro gamers. A few weeks ago, Jay Ajayi, who joined the Philadelphia Eagles in 2017 and helped take the team to Super Bowl LII, signed with the Philadelphia Union as a pro gamer for eMLS, the esports and gaming property of Major League Soccer.
“When you see pro athletes saying to skinny little gamer kids that they are just as much an athlete as them, this industry gets even more real,” Fazio said.
In conversations with Johnson and Fazio, and in the general discourse about the esports industry, accessibility has been brought up over and over again. Traditionally, those who become expert gamers have the time and resources to purchase equipment, travel and practice, practice, practice.
“It’s a privileged industry,” Fazio said. “I think the reality is there’s a lot of folks who would love to get involved but they can’t afford consoles.”
With Localhost facilities in places like the Wells Fargo Center, its bases in Philly, Colorado and California, and facilities heading to Five Below stores across the country, Nerd Street Gamers is aiming to fix that, Fazio said.
Instead of spending thousands on buying your own equipment, you can head to an esports facility to connect with other players and get experience on top-tier equipment. It’s also a way to transform the traditionally siloed activity of gaming into a social network, Fazio said.
“Our vision is one where Nerd Street Gamers is the gaming platform and the place to go as gamer,” he said. “It’s one that expands between digital and physical.”
Fazio said that while other esports facilities and offerings are popping up, he feels Nerd Street got in on the industry at exactly the right time. The team has spent the last year or so on growing a global company, and is pulling talent from the world of athletics, like the National Football League, National Hockey League and execs from media giants like NBC and Fox to do so.
This year will likely be another of growth, Fazio said, as influencers around the world and in Philadelphia continue to invest time and dollars into making gaming a legitimate industry.
“This is the tech giant I’ve always wanted to run,” Fazio said. “The company that I believe could change the world.”
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