(Photo via Chris Yunker [CC BY 2.0]. Click image to enlarge)
Stockhouse investors keep their eyes on emerging markets to try and stay ahead of the curve. Over the past few years, buzz around one particular tech market
has continued to grow:
eSports.
So what are eSports and how do you invest in them? They’re what you get when you mix the booming video game industry with fandom and spectatorships, and the
resulting competitions are massive in scale. The top championship matches pull in more viewers than traditional sports with winning teams raking in millions of dollars.
You probably already know most of the hype, but the question is how to get a foot into the industry. Speaking as a former games journalist that has covered competitive gaming in the past, I can confidently say that there’s a lot of money to be made in eSports if you know where to look.
Like with traditional sports, high viewership and engagement means
a lot of the money comes from the fans. That makes sponsorships, merchandise, spectating, and betting some of the best avenues for revenues. The biggest games at this time include
Overwatch, League of Legends, Fortnite, and
Counter Strike, and they all have extremely dedicated fanbases.
(Image via Newzoo. Click image to enlarge)
The easiest entry points are with the major players that have grown the industry. Those include the game-makers behind the most popular eSports games,
Activision Blizzard Inc. (
NASDAQ:ATVI),
Tencent Holdings Ltd. (
OTC:TCEHY), and
Electronic Arts Inc. (
NASDAQ:EA), which are focused on increasingly growing the industry. The bigger and better their eSports offerings, the more they can entice players to spend money in their game or on future games.
The other simple entry is in viewership (and associated sponsorships), which has stayed predominantly online. The biggest services right now are Twitch and Mixer, owned by
Amazon.com Inc (
NASDAQ:AMZN) and
Microsoft Corp. (
NASDAQ:MSFT), respectively. Twitch is the king right now and pulls in millions of viewers, but Microsoft has been enticing a lot of big names to jump ship to Mixer and bring their viewers with them.
If you’re looking for a more direct and technical approach, you can get into the hardware. Companies which produce computer and gaming peripherals have made massive strides (and sunk a lot of money into eSports sponsorships). Think
Logitech International S.A. (
NADSAQ:LOGI),
Turtle Beach Corp. (
NASDAQ:HEAR),
NVIDIA Corp. (
NASDAQ:NVDA). If your company’s products become the go-to for star eSports athletes or a game at large, there’s a ravenous audience hoping to emulate their success.
Of course, since eSports is an emerging market, there are also a ton of further opportunities in the market. A lot of investment analysts have seen the potential of the market and started ETFs specifically geared at eSports. These include the Canada based
Evolve E-Gaming Index ETF (
TSX:HERO),
Roundhill BITKRAFT Esports & Digital Entertainment ETF (
NYSE:NERD), and
VanEck Vectors Video Gaming & eSports ETF (
NYSE:ESPO) to name a few.
And we haven’t touched on the outside services that are targeting eSports. Betting, data analysis, tournaments, and eSports-geared content all have a role to play in the emerging industry. If your opportunity can directly tap into the biggest games, stars, and fanbases, the sky’s the limit.