Investors Winning Big in Esports
Kids aren’t dreaming of becoming actors and actresses anymore. Everyone wants to be a professional esports player! Millionaire gamers are playing competitive video games in front of packed out arenas, while investors are playing the markets for their share of the spoils!
At over 5,000 esports tournaments worldwide, the average prize pot has grown to $30,000. However, with managers working behind the scenes, some gamers are walking away with even more than that. At the Fortnite World Cup final this year, a 23,000-seater stadium hosted 100 celebrity gamers hoping to win a $30 million prize pool. Now we’re talking!
Most of the money pumped into esports comes from advertisers, which range from Mercedes-Benz to Microsoft. Sponsoring players, teams, and tournaments, is a smart way to drive young males to your brand, but merchandise in the form of team jerseys and stickers, also bring in big money. The question is, how can a noob investor get in on the action?
Until now, the only answer was through private equity. That means picking up the phone and bartering directly with a company. Luckily, times have changed. Thematic exchange-traded funds (ETFs) are sprouting up left, right, and center. Essentially, a fund manager scans company filings for words like ‘competitive gaming’ and ‘esports’ before compiling a ready-made basket of every company involved in the business. It’s a bright idea, but done-for-you funds take away all the fun!
The bottom line is that esports has arrived on Wall Street, so expect to hear plenty more about it in the months to come!
