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What ways can you invest into the lucrative esports world?

esports


Competitive gaming is now a multibillion-dollar industry and it has enormous growth potential in the years ahead.

The global fanbase is set to increase from 454 million this year to 645 million by 2022, according to research from NewZoo, and exciting commercial opportunities are opening up all the time.

Leading brand owners are keen to reach this young and tech-savvy audience. Sponsors of esports teams and tournaments include Intel, MasterCard, Coca-Cola, McDonald’s, Audi and many more. All manner of billionaires, celebrities, rappers and traditional sports stars are investing heavily in esports teams, as they recognise the sector’s phenomenal growth potential.

However, the esports scene is still in its infancy. The big franchises and tournament organizers like ESL are not listed companies, and that can make it difficult for the majority of investors to back the flourishing esports sector.

We have therefore identified four big firms that offer a degree of stability for investors, but also grant them solid exposure to the competitive gaming industry:

Activision Blizzard (NASDAQ: ATVI)

Activision Blizzard is one of the world’s most famous video game companies and it has a market cap of around $43 billion. This S&P 500 stock also accounts for many of the biggest esports on the planet.

The Blizzard portfolio is totally unrivalled in the competitive gaming sector. It boasts titles like StarCraft II, Overwatch, Hearthstone and the Warcraft series, games that are beloved by millions of esports fans across the world.

StarCraft is a real-time strategy game and it is absolutely huge in Korea, where matches are broadcast on primetime TV and the leading players are revered as celebrities. It is arguably the most influential competitive game of all time, and its sequel remains one of the biggest esports around.

Overwatch is a first-person shooter that is absolutely soaring in popularity. It began in 2018 and offered a total prize pool of $3.5 million to the leading teams. London Spitfire beat Philadelphia Fusion in the Overwatch League Grand Final, which took place at the Barclays Center in New York last year.

This year’s event is even bigger and the winning team will take home a cool $1.1 million when the grand finals unravel at the Wells Fargo Center in Philadelphia. Overwatch League is broadcast on ABC, Disney and ESPN, interest is massive and it is also huge from an esports betting perspective.

Along with these popular titles, the Activision side of the business also boasts the Call of Duty series, which is another of the world’s biggest esports, along with being a massive seller to casual gamers.

Tencent Holdings (OTC: TCEHY)

Tencent is a Chinese multinational investment holding conglomerate, founded in 1998. It pulled off a significant coup when it purchased League of Legends developer Riot Games for $230 million. Nowadays, Riot is worth billions of dollars thanks to LoL’s enduring popularity.

It is the world’s most popular esport and it made $3.5 billion in 2017 and 2018 combined. Riot has 2,500 people working around the clock to refine LoL’s offering and ensure it remains the most exciting video game in the world.

It is now 10 years old, but it recently overtook Fortnite to regain its crown as the most watched game on Twitch. Speaking of Fortnite, Tencent bought a minority stake in its developer, Epic Games, back in 2012. Fortnite earned $2.4 billion in 2018, the highest revenue for any game in history. Epic is channelling $100 million into prize pools this year in order to provide Fortnite with a strong competitive scene.

Tencent has also developed an extremely popular mobile MOBA game called Arena of Valor, which is similar to LoL, but a little simpler. It has already become one of the most important esports in the world, particularly in China, Taiwan and Korea.

It also owns Player Unknown’s Battlegrounds, which is another massive battle arena game, with a thriving competitive scene. Additionally, Tencent operates streaming and social media platforms that could boost its chances of success within esports.

Electronic Arts (NASDAQ: EA)

EA is the leader in the sports game genre and the FIFA series is the crown in its jewel. For the past couple of years, it has held a FIFA eWorld Cup tournament, and more than 40 million gamers enter the qualifying stages.

This leads to a great deal of media coverage, as the winner gets to rub shoulders with some of the world’s greatest soccer stars at the Best FIFA Football Awards. The competitive FIFA scene is hugely popular, and EA is constantly ramping up the number of tournaments that take place each year.

It also owns Madden, the market leading NFL simulator. This does not have as big of a footprint in the esports sector, but its potential is huge.

Outside of its sports department, EA launched Apex Legends earlier this year. It immediately became a credible challenger to Fortnite and PUBG in the flourishing battle royale genre, a competitive scene has sprung up and many of the world’s top franchise now have Apex teams.

An alternative to EA would be Take-Two Interactive (NASDAQ: TTWO), which publishes NBA 2K. It also has massive AAA games like Grand Theft Auto and Red Dead Redemption in its roster.

Logitech International (NASDAY: LOGI)

A few esports can be played on consoles like the PS4 or the Xbox One, but the vast majority of esports stars use high-powered gaming PCs. Aspiring professional gamers are putting themselves at a considerable disadvantage if they do not own the best keyboards, mice and other hardware.

That is where a company like Logitech comes in. The firm was founded in Switzerland back in 1981, and it now has offices in Silicon Valley, Hong Kong, Tokyo, Taiwan and mainland China. It employs more than 7,000 people across the globe and its products are distributed in more than 100 countries.

It sells a huge range of highly rated mice, keyboards, speakers and webcams, all of which are crucial for pro gamers and streamers.

Microsoft and Intel are also major players within esports, but investing in a company like Logitech gives you much more direct exposure to the industry.

Photo by Anthony Brolin on Unsplash



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