Gaming / Partnerships / Sports

Here’s a closer look at Nerd Street Gamers’ deal with Five Below

Next year, the esports startup will install Localhost gaming locations in select retail stores. The inspiration for the deal came from a recent Take Your Kids to Work Day exercise.

Nerd Street Gamers' Localhost. (Photo courtesy of Nerd Street Gamers)

When Nerd Street Gamers announced last month that it had raised $12.5 million in a Series A lead by retail giant Five Below, it was the first time we’d heard of such a partnership.

The plan — that Nerd Street would build 3,000-square-foot Localhost esports facilities for select Five Below stores — kicks off next year. It’s another step forward in Philadelphia’s quickly rising esports industry: two Philly-based companies partnering to create physical spaces for gamers to gather in public spots across town.

So what does this Nerd Street-Five Below deal really look like?

Leaders from both companies laid out some of the specifics at Citizens Bank Park Wednesday during SeventySix Capital’s Sports Innovation Conference.

Dave Makuen, the executive VP of marketing and strategy for Center City-headquarted Five Below, and Rob Johnson, COO of Northern Liberties’ Nerd Street, were joined by Neil Duffy, the chief commercial officer of the World Gaming Network, for a lunchtime panel about the growing industry.

The three started the talk acknowledging that some people don’t consider esports or gaming to be “real sports.”

“It’s young men and women competing at a high level,” Makuen said. “In my mind it’s a sport.”

Johnson agreed, saying that Philly’s forthcoming Fusion Arena, which will sit adjacent to the city’s other sports arenas, will cement the industry’s place among sports fans.

The camaraderie among fans that Philly teams like the Flyers or Eagles have is something that gamers lacked until recent times, when folks started looking at it as an industry, Duffy said. And having places — such as Localhost facilities — to gather and game together has helped solidify fan bases.

Makuen said that desire to gather to game was one that was extremely appealing to Five Below, which already sells to younger consumers, many of whom are already interested in gaming.

Both parents and kids want to be somewhere “with high value and high energy,” Makuen said.

The idea for the collaboration came from Five Below’s Take Your Kids to Work Day this past spring when children were asked to write down who they look up to.

“There was an occasional Steph Curry or so, but mostly every kids’ sheet listed gamers or YouTubers,” Makuen said. “To us, that was a real ‘ah ha’ moment. It really started us on thinking about how can we extend our experience beyond traditional commerce.” To the retailer, it was worth the investment to build these gaming spaces for kids (and their parents) who were already in the stores.

Like other Localhost facilities, the Five Below locations will have state-of-the-art gaming equipment that most folks can’t afford to install in their homes.

The retailer will be happy to sell the affordable sound accessories and snacks that folks can easily take home, of course.

“We’re going to be super thrilled when they buy gummy bears and Powerades,” Makuen said. “But we’ll be extra thrilled when they join our clubs and have a blast at a Five Below store.”

Companies: Nerd Street / Five Below / SeventySix Capital

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