Here are a few analogies to describe Motorsport Games (MSGM):

• They are like the Electronic Arts (EA) of racing video games, with a strong focus on esports.
• Imagine a niche video game developer and publisher, similar to Take-Two Interactive, but exclusively for racing games and their associated esports tournaments.

• Racing Video Games: Develops and publishes multi-platform racing video games for consoles, PC, and mobile, including full games and downloadable content.
• Esports Event Management: Organizes and facilitates esports tournaments, competitions, and events for its own licensed games and on behalf of third-party game developers.

Major Customers of Motorsport Games (MSGM)

Motorsport Games Inc. primarily sells its video games and related content to individual consumers through various retail and digital channels. Its esports segment also primarily caters to individuals who participate in or watch competitive gaming events.

The company serves the following categories of customers:

1. Racing Game Enthusiasts and Sim Racers: These are individuals who are deeply passionate about motorsports and seek immersive, authentic, and often highly competitive racing experiences through video games. They frequently follow specific racing series (such as NASCAR, Le Mans, or IndyCar) and are key purchasers of new titles, season passes, and downloadable content.
2. Casual Gamers: This category encompasses individuals who enjoy video games as a form of entertainment and may purchase racing titles for fun, accessibility, or due to an attraction to well-known racing licenses. While not as deeply invested in the simulation aspect as enthusiasts, they contribute to a broader market for the company's products.
3. Esports Participants and Viewers: This group consists of individuals who engage with the competitive dimension of racing games. It includes players who actively participate in esports tournaments and competitions organized by Motorsport Games, as well as the wider audience that watches and follows professional or amateur racing esports events.

Epic Games

NASCAR

Automobile Club de l'Ouest

TOCA Ltd.

Penske Entertainment Corp.

Stephen Hood, Chief Executive Officer

Stephen Hood has served as Chief Executive Officer and President of Motorsport Games Inc. since April 19, 2023. He previously held the position of President at Motorsport Games Inc. from April 2019 to January 2022. Hood is a BAFTA award-winning developer, recognized for his work on "The Movies" (Best Simulation) and "Formula One 2010" (Best Sports Game). His extensive background in the video game industry includes roles such as Creative Director and Chief Game Designer at Codemasters, where he was involved with the Formula 1 game series. He also served as Executive Producer and Creative Director at Dovetail Games, Design Manager at Ideaworks Game Studio, and Senior Designer at Lionhead Studios. Prior to his initial tenure at Motorsport Games, he was the Head of Esports for Autosport Media UK Limited, a subsidiary of Motorsport Network. Additionally, from October 2022 to April 2023, Mr. Hood worked as a business development consultant for Speed Capital Ltd.

Stanley Beckley, Chief Financial Officer

Stanley Beckley was permanently appointed Chief Financial Officer of Motorsport Games Inc. on May 16, 2024, after serving as Interim CFO from November 8, 2023. He holds Bachelor's and Master's degrees in Accounting from Florida International University and is a CPA in Florida and Virginia, as well as a Certified Fraud Examiner and Chartered Certified Accountant. Beckley has over two decades of experience leading finance and accounting teams. His previous roles include Corporate Controller for H.I.G. Capital, a global private equity firm, where he worked for almost four years. He also spent nine years at KPMG as a Senior Manager in its Audit Practice. Furthermore, Mr. Beckley served as Chief Accounting Officer of Driven Lifestyle Group LLC, the majority stockholder of Motorsport Games Inc., and as Chief Financial Officer for CDR Companies.

1. Financial Condition and Liquidity: Motorsport Games has a history of incurring losses and a recurring need for additional capital to meet its financial obligations. The company's 2025 annual report highlighted liquidity risks tied to capital needs and a secured credit facility, indicating a need for potential additional capital. In 2024, the company was actively seeking additional funding and exploring strategic alternatives to address liquidity challenges. An Altman Z-Score of -5.53 has placed the company in a "distress zone," suggesting a potential bankruptcy risk within two years. Although there was an indication in January 2026 that improved liquidity and positive operating cash flow allowed the removal of "going concern" language in 2025, more recent reports from March 2026 continue to emphasize significant liquidity and capital needs as ongoing risks.

2. Concentration Risk: A substantial portion of Motorsport Games' revenue is concentrated in a single product and a limited number of distribution channels. In 2025, approximately 78% of the company's revenue was generated from "Le Mans Ultimate," and roughly 64% of its revenue flowed through a single digital distribution channel. This heavy reliance on one game and one distribution platform makes the company highly vulnerable to any downturn in the performance or popularity of "Le Mans Ultimate" or issues with its primary distribution partner.

3. Dependence on Intellectual Property Licenses and Competitive Market: Motorsport Games' business model is built around developing and publishing racing video games based on licensed motorsport intellectual property. The company has a history of difficulties in managing its intellectual property portfolio, including having sold or terminated licenses for major series like NASCAR, BTCC, and IndyCar. The ability to secure and maintain these critical licenses, as well as successfully deliver popular products in the highly competitive interactive media industry, remains a significant ongoing risk to its operations and financial performance.

The following clear emerging threats have been identified for Motorsport Games (MSGM):

• The shift in consumer behavior towards subscription-based gaming services: The increasing popularity and market penetration of gaming subscription services like Xbox Game Pass and PlayStation Plus are fundamentally changing how consumers acquire and play games. As players increasingly expect access to a large library of games for a monthly fee, MSGM's traditional revenue model, heavily reliant on individual game sales, faces pressure. This could devalue their premium racing titles or force them into potentially less favorable revenue-sharing agreements to get their games onto these platforms, echoing the disruptive impact of Netflix on Blockbuster.

• The growing dominance of free-to-play (F2P) live service models in competitive and esports-focused genres: The gaming industry, particularly in competitive and multiplayer segments relevant to racing games and esports, has seen a strong shift towards F2P models combined with continuous live service content and monetization through battle passes or cosmetics. If MSGM continues to primarily focus on premium, paid-up-front racing titles, they may struggle to compete for player attention, engagement, and spending against F2P alternatives that offer ongoing content updates and a lower barrier to entry, especially in the growing esports landscape.

Motorsport Games Inc. (NASDAQ: MSGM) operates in two primary addressable markets: multi-platform racing video games and esports tournaments.

Racing Video Games Market

The global racing games market was valued at approximately USD 5.55 billion in 2025 and is projected to grow to USD 9.84 billion by 2031. Another estimate for the global car racing games market indicates a size of approximately USD 5.6 billion in 2023, with a projection to reach about USD 10.2 billion by 2032.

In North America, the racing games market is valued at USD 7.5 billion. North America holds a dominant position in the global racing games market.

Esports Market

The global esports market size was estimated at USD 2.13 billion in 2024 and is projected to reach USD 7.46 billion by 2030. Another report valued the global esports market at USD 1.75 billion in 2024, expecting it to grow to USD 2.12 billion in 2025 and reach USD 9.85 billion by 2033.

The U.S. esports market is valued at approximately USD 1.01 billion or over $1.07 billion. The U.S. esports market generated revenue of USD 555.4 million in 2024 and is expected to grow to USD 1,843.8 million by 2030.

Expected Drivers of Future Revenue Growth for Motorsport Games (MSGM)

Over the next 2-3 years, Motorsport Games (MSGM) is expected to drive revenue growth through several key initiatives and market trends:

1. Continued Growth of Le Mans Ultimate and Downloadable Content (DLC): The company's "Le Mans Ultimate" racing title, released in February 2024, has already been a significant revenue driver, including strong sales of downloadable content (DLC). Motorsport Games anticipates further growth from this title, capitalizing on its established community and ongoing content updates.
2. Expansion into Console Markets with Le Mans Ultimate: Motorsport Games is actively working on bringing "Le Mans Ultimate" to PlayStation and Xbox gaming consoles, with an estimated delivery between late 2026 and early 2027. This console expansion is expected to significantly broaden the game's reach and introduce it to a new, larger player base, thereby driving substantial revenue growth.
3. Growth of the RaceControl Subscription Service: The "RaceControl" subscription service has demonstrated robust growth in net monthly recurring revenue (MRR) and registered accounts. Motorsport Games is investing in its Software as a Service (SaaS) infrastructure and expertise to further strengthen game content and subscription monetization efforts, indicating a strategic focus on expanding this recurring revenue stream.
4. Strategic Investment in Owned Technology and Product Portfolio Expansion: Motorsport Games has articulated a strategy to scale its existing platform, invest in its proprietary technology, and explore opportunities to expand its product portfolio. This suggests a commitment to developing new titles or significant enhancements that leverage their in-house technology, contributing to future revenue streams beyond current offerings.
5. Leveraging the Growing Esports Market: As a company that organizes and facilitates esports tournaments for its licensed racing games, Motorsport Games is well-positioned to benefit from the overall growth in the racing games esports market. The increasing popularity of competitive racing leagues and virtual motorsport events can attract a larger audience, drive player engagement, and open new revenue opportunities through sponsorships, advertising, and increased game and subscription sales.

Capital Allocation Decisions for Motorsport Games (MSGM)

Share Issuance

• Motorsport Games completed its Initial Public Offering (IPO) in January 2021, pricing 3,000,000 shares of its Class A common stock at $20.00 per share, which generated approximately $60.0 million in gross proceeds.
• In April 2025, the company secured approximately $2.5 million in gross proceeds from a private placement offering, led by an affiliate of Pimax Innovation Inc. This investment was made at a premium of approximately 33% over the stock's closing price before the announcement.
• Motorsport Games' 2025 annual report noted that future issuances of equity or convertible debt could affect existing stockholders.

Inbound Investments

• Pimax Innovation Inc. made a strategic investment of approximately $2.5 million in Motorsport Games in April 2025 through a private placement offering.
• In February 2026, Motorsport Games secured a $3 million revolving line of credit from Citibank N.A., which currently has no balance drawn.

Outbound Investments

• In October 2023, Motorsport Games sold its NASCAR licensed rights to iRacing.com Motorsport Simulations, LLC, and consequently ceased selling NASCAR titles from the beginning of 2025.
• The company has contributed approximately $8.8 million towards its commitment of up to €8,000,000 for its Le Mans license and joint venture with ACO.

Capital Expenditures

• Motorsport Gaming Us LLC (Motorsport Games Inc.) saw its capital expenditures average $248.034 thousand from fiscal years 2020 to 2024.
• Capital expenditures for the company peaked in December 2021 at $754.302 thousand and reached a five-year low of $25.015 thousand in December 2024.
• The company is focused on continuing to invest in its technology and bringing its "Le Mans Ultimate" title to console platforms, such as PlayStation and Xbox, with a release expected in late 2026 or early 2027.