The Rapid rise of eSports and its investment potential

by | Sep 21, 2017

Companies which are involved in hosting and promoting eSports (electronic sports) events are set to grow significantly over the next few years, if the growing rate of participation and interest is anything to go by. 

Goldman Sachs valued the eSports industry at $500 million in 2016, but the key metric is growth potential, in which they expect the market to grow by 22% over the next 3 years. 

More people than ever before are tuning in to watch competitive gaming events, where teams face off for cash prizes and prestige in front of Super Bowl sized crowds. Even major TV companies such as Time Warner started broadcasting games from EALEAGUE, the professional sports league last year. 

Newzoo, the company which provides market intelligence covering the global games, esports and mobile markets, predicted in its 2017 global eSports market report that the combination of sponsorship, media rights, game publisher fees, advertising and merchandise will add up to a total of $696m in revenues for the industry by the end of this year. 

Not only this, but prize money for competitive gaming last year reached $93.3 million, up from $61 million in 2015 or +52.9% year on year. In turn, interest across emerging markets is growing significantly, especially as Chinese players are some of the top performing across the most popular eSports titles like Dota 2 and League of Legends. Indeed, data from esportsearnings.com indicates that China-based eSports competitors have made over $46m in prize money from Dota 2 tournaments alone. 

One company that is set to benefit from this incredible growth is Activision Blizzard, the firm behind major game titles including Overwatch and the Call of Duty series. The company is nearing completion of a venue in LA that is fully dedicated to eSports which will host the first season of the highly anticipated Overwatch League. Overwatch surpassed 30 million users worldwide in April this year.

Massive player-bases are nothing new for Activision Blizzard. At the peak of its popularity, the monthly active user count for World of Warcraft hit 12 million globally, with every registered user paying a monthly subscription fee for the privilege of playing the MMORPG.

That was way back in 2010. Nowadays gaming is more mainstream than ever before, and major eSports events are likely become a meaningful driver of gaming company revenues long-term, therefore providing lucrative returns to investors! 

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ALL RIGHTS RESERVED © INVSTR LTD. 2017

Risk Disclosure:
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