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Yousef Abdelfattah: It's all about flashy stuff. It was just freestyle, like tricks, and it was all skill. It was all trying to do things that people have never done before. So they were basically creating a new way to play the game.Speaker 4: Oh my God. I just did the neck almost hit the 1440. Woohoo.Speaker 4: Oh, oh, oh. Aah.
Ryan Knutson: Most team members had their own screen name that started with the word FaZe, FaZe Reign, FaZe Temper. And so Yousef started going by the name FaZe Apex. Over time FaZe Clan started making money, a lot of money. They reeled in advertisers, corporate sponsorships, and big prizes at eSports tournaments. And what started out as a handful of teens playing video games became a company that's now valued at over a billion dollars.
Ryan Knutson: But even then, at 14 years old, Apex knew that this had the potential to be more than just for fun. Ryan Knutson: And their views on YouTube grew really fast. In 2012, they reached 1 million subscribers. Around that time, Apex and other FaZe Clan members started making new kinds of videos that weren't just montages of different trick shots. They started being more personal and talking about their everyday lives.
Yousef Abdelfattah: Sponsorships kind of started pouring in around then too. We started getting random brands reaching out. Here's $5,000 for you to promote my website. And we're like, "Okay. We're 15, 16. We didn't know any better and we just kind of started learning as we went basically. Yousef Abdelfattah: It's hard to even call it a business. It was a business. It was generating money, money was coming in and out. We had people on salary. We had professional teams, but it was really just like we were learning as we went, basically. Everything I think is taken care of now, but there was probably years with tax stuff that we were probably getting penalized here and there. We didn't know anything.
Lee Trink: I am definitely not a Gen Z'er, although often I'm living the Gen Z lifestyle. No, I'm Gen X, but I'm certainly channeling my inner Gen Z. Lee Trink: And I thought, If there's something this big that I've never heard of," I consider myself a student of kind of pop culture and culture in general. I said, "Okay, let's try." I reached out to an agency that was working within eSports that I had relationship with. And eventually they connected me to FaZe Clan.Lee Trink: Well, what I realized is everybody's getting it wrong. Influencers and creators in general. That community of talent, totally undervalued.
Speaker 8: You know me and McDonald's go way back. Now, we're officially welcoming them into the FaZe family.Speaker 9: We're stoked to announce a partnership with Draft Kings, another trailblazer. Ryan Knutson: But in some ways, a lot of the real hard work starts now. FaZe brings in lots of money, but the company isn't profitable. In 2021 FaZe reported revenue of $52 million, but it spent way more. That same year, it also had a net loss of 37 million. So when do you think that this business can start turning a profit?
Yousef Abdelfattah: We've had that same reaction since 2014. It was the same feedback. "No, you guys are changing. You shouldn't do this. You should only make these videos." And it's just what happens when you have very passionate fans that really enjoy a chapter of what you're doing. They're not ready to see you expand sometimes and do other things.