Want to Invest in eSports? Here’s What Stocks to Buy
Back in the 1990s, “competitive gaming” meant either a hot-seat game in front of a gaming console with siblings trying to break each other’s records or LAN parties, with teens (and their computers) gathering at one of their garages, building a makeshift network, and spending a weekend playing multiplayer games. Now, three decades later, “competitive gaming” means something completely different: a discipline where professional teams are facing each other in tournaments backed by big brands, followed by hundreds of millions of people around the world.
A billion-dollar business
Competitive gaming or eSports is a billion-dollar business. Literally – according to gaming specialist Newzoo, the total revenue generated by eSports will exceed $1 billion in 2020, with the number of enthusiasts and occasional viewers growing beyond 500 million worldwide. Only $1 billion, though, because the growth of eSports in 2020 is held back by the social distancing measures that have led to the cancellation of several high-profile live events.
Almost like “proper” sports
Many argue that eSports is not a “proper” sport – but it’s surely organized as one. There are teams competing in various disciplines, complete with managers, trainers, and sponsorship deals. There are leagues where teams from all over the world compete, with prize pools that quote often exceed millions. And the biggest competitions in eSports have supporters and sponsors from all areas – brands ranging from Coca Cola and Red Bull to Honda and BMW.
How can I invest in eSports?
Right now, there is a single eSports team that has gone public: Denmark-based Astralis Group has completed its IPO in December. While there are not many options right now to invest in eSports directly, there are several stocks tied to companies very active in the eSports scene.
Activision Blizzard (NASDAQ:ATVI) is a major game development and distribution company on the forefront of the eSports scene. There are several major eSports titles (and their respective leagues) under its umbrella, including games like the Call of Duty franchise, Starcraft, World of Warcraft, and Hearthstone.
Tencent Holdings (OTC:TCEHY) is a far-reaching telecom and entertainment conglomerate that runs some of the best-known and most popular eSports titles, including League of Legends. Besides, it has interests in the companies behind titles like PlayerUnknown’s Battlegrounds and Epic Games’ popular battle royale title Fortnite.
Take-Two Interactive (NASDAQ:TTWO) is the brand behind a series of major sports simulators that are played competitively, including the NBA 2K League officially sanctioned by the best-known basketball league in the world.
Finally, let’s not forget Electronic Arts (NASDAQ:EA) that, through its EA Sports division, is behind a series of massive – and official – eSports leagues, including the FIFA eWorld Cup and Madden NFL, along with the increasingly popular Apex Legends.
Disclaimer: This post is sponsored content and is not an endorsement or recommendation to buy, sell trade or transact in securities or other investment products.