Five Below in pilot to open gaming centers in stores

Marianne Wilson
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Five Below is getting on board the fast-growing esports craze.

The tween and teen discounter retailer is partnering with Nerd Street Gamers, a developer of training and competition facilities for esports. Nerd Street has completed a $12 million financing round led by Five Below to build esports facilities (Localhost) that house leagues, training camps, tournaments, and showcases equipment. (Existing investors Comcast, SeventySix Capital, Elevate Capital, and angel investor George Miller also joined in the round).

As part of the deal, Five Below and Nerd Street will build 3,000-sq.-ft. Localhost esports gaming centers connected to select Five Below stores, beginning with a multi-store pilot in 2020. Future rollout plans will be based on the results of the pilot. But they could include 70 or more locations during the next several years. 

“The partnership with gaming expert Nerd Street Gamers is a unique opportunity to engage with an important and growing community of gamers in many of our locations across the country,” said Joel Anderson, CEO of Five Below, which has more than 750 stores. “Gaming is a trend our younger customers are actively enjoying, and working with Nerd Street Gamers will help us to provide an exciting gaming experience that appeals to our core customers and beyond, while also showcasing our extreme value technology-related products and accessories.”

Anderson told The Philadelphia Inquirer that about 100 Five Below stores have excess space for the 3,000-sq-ft. gaming centers with 30 to 50 personal computers for video gaming. “Entertainment and making a store a place where you can have fun is what we are all about,” he noted. 

In addition to the Localhosts connected to Five Below stores, Nerd Street plans to build 50 larger regional and university-based facilities. In September, Nerd Street opened a 32,000-sq.-ft. Localhost facility in Huntington Beach, Calif., along with one at the Wells Fargo Center in Philadelphia, the first public gaming facility in a pro sports arena.

“This round of funding led by Five Below and the opportunity of Localhost locations connected to Five Below stores empowers our vision of a world where esports is accessible and inclusive for everyone,” said John Fazio, founder and CEO of Nerd Street Gamers. “Too few have access to the type of equipment and internet connections required to compete at the top levels, and by addressing that at a national scale we can increase real-life opportunities for millions of people.”

Fazio continued: “Having one of the fastest-growing and most successful retailers support our mission takes us one step closer to making it a reality, This funding will accelerate our technology platform growth, and by working with Five Below, we will be in a position to open venues in every major city in the country, bringing esports to a whole new segment of gamers.”