Night Light | Why Faze Failed
Reed of the Week
It's been a rough few weeks for FaZe Clan. They've been dealing with mass layoffs, plummeting stock prices, and unrest from creators and fans. Only a few months ago things were looking good, they were the first Esports org to go public on the NASDAQ. In hindsight, we now know the company is incredibly overvalued, as it just closed its first financial year with a $53.2 million net loss.
FaZe's steady decline since their IPO brings about the question of creator ownership and the value of public listing to organizations like FaZe, whose brand value is linked to the talent that founded the organization. Jimmy's tweet from last week criticized the change in leadership that came with the merger. The original members of FaZe (and those whose authenticity built the brand's fanbase in the first place) were no longer the decision-makers. I couldn't agree more with Jimmy, the new leadership didn't understand what their community wanted.
There's a lesson in all of this. Any business in the creator economy relies on the notion that creators have authentic connections with their fans and communities. When you forget this unique relationship and only focus on corporate financing and investor control, you risk losing the very thing that made you successful in the first place. Your community.
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