Can I Invest In Esports?
Contents
Can I Invest In Esports? is a comprehensive resource for those interested in learning more about investing in the esports industry.
Introduction
The world of competitive gaming, or esports, has seen explosive growth in recent years. With large prize pools and millions of spectators, esports has begun to rival traditional sports in terms of popularity. This has led some investors to ask: can I invest in esports?
The short answer is yes, but it’s not as simple as buying shares in a team or investing in a game developer. The esports industry is still young and relatively unregulated, which means there are a number of risks to consider before investing. In this article, we’ll explore the different ways you can invest in esports, as well as the risks and potential rewards associated with each option.
What is esports?
Esports, also known as electronic sports, is a form of competitive video gaming. Unlike traditional sports, esports are not governed by any one particular body or organization. Esports tournaments are organized by game publishers, third-party organizers, or collegiate leagues.
The competitive landscape
The global esports market is still in its infancy, but it’s already begun to take shape. Here’s a look at the competitive landscape of this burgeoning industry, from the biggest tournaments to the most influential organizations.
The International
The biggest annual tournament in esports is Dota 2’s The International, hosted by developer Valve. Held since 2011, The International features a massive prize pool that has grown to over $25 million in 2017. The tournament attractes the best Dota 2 teams from around the world and is widely considered to be the pinnacle of competitive Dota 2 play.
League of Legends World Championship
While Dota 2 may have the biggest prize pool, League of Legends boasts the largest esports audience. Riot Games’ MOBA is regularly watched by millions of people around the world, and its annual world championship is a must-see event for any esports fan. The 2017 League of Legends World Championship had a prize pool of over $4 million and attracted over 60 million unique viewers.
Overwatch World Cup
Blizzard’s Overwatch has only been out for two years, but it’s already made a huge impact on the competitive scene. The game’s first official world championship was held in 2016, and featured a $300,000 prize pool. The next Overwatch World Cup will be held in 2018, and it’s sure to be even bigger and better than before.
Call of Duty World League
Call of Duty is one of the longest-running shooter franchises in gaming history, and its competitive scene is just as storied. The Call of Duty World League is Activision’s official esports tournament circuit for Call of Duty: WWII, with a prize pool of $1.5 million up for grabs in 2018. The league features some of the best CoD teams from around the world battling it out for supremacy.
The business of esports
The esports industry is still in its infancy but is growing rapidly. According to a report by Goldman Sachs, the industry is on track to generate $3 billion in revenue by 2022.
There are a number of ways to generate revenue in esports. The most common are tournament fees, sponsorship, advertising, and merchandise sales. Some esports organizations are also beginning to explore new revenue streams such as broadcast rights and betting.
Tournament fees are the largest source of revenue for esports organizations. The fees are used to cover the cost of organizing and running the event, as well as prize money for the winning teams. Sponsorship is another important source of revenue for esports organizations. Brands pay to have their name associated with an organization or players on a team. Advertising is another way that brands can get involved in esports. Many brands have begun to sponsor tournaments or individual teams in order to get their name out there. Merchandise sales are also a big part of the esports industry. Organizations sell branded clothing and other products to their fans.
The business of esports is still young but it is growing quickly. There are a number of ways to generate revenue from esports, and more organizations are beginning to explore new ways to generate income.
Why invest in esports?
The worldwide esports market is growing rapidly with more people watching and playing than ever before. This presents a great opportunity for investors who are looking to get involved in a growing industry. Esports is still in its early stages, which means there is a lot of potential for growth. This makes it a great time to invest in esports.
The potential for growth
The gaming industry is booming, with nearly 2.5 billion gamers worldwide and revenue reaching $159 billion in 2020. The esports industry is a rapidly growing subset of the gaming industry, with global revenues expected to reach $1.1 billion by 2022.
There are several reasons for the rapid growth of esports. First, there is a large and growing base of gamers worldwide. In addition, the popularity of live streaming platforms like Twitch has made it easier than ever for people to watch esports competitions. Finally, many traditional sports organizations are investing in esports, which has helped to legitimize the industry and attract even more viewers.
Investors are taking notice of the potential for growth in the esports industry. Many big companies have already invested in esports teams or leagues, and venture capitalists have poured millions of dollars into start-ups focused on gaming and live streaming.
If you’re thinking about investing in esports, there are several things you should consider. First, it’s important to understand the different business models that are being used by companies in the industry. Second, you need to be aware of the risks involved in investing in a relatively new industry. Finally, it’s important to choose an investment that aligns with your own goals and risk tolerance.
The global appeal
Esports is a global phenomenon with a massive and dedicated following. The ability to watch professional gamers compete at the highest level is something that appeals to people of all ages and backgrounds. And with the industry growing at an incredible rate, there are plenty of opportunities for those looking to invest in esports.
There are a few key reasons why investing in esports makes sense. Firstly, the audience for esports is huge and onlygetting bigger. According to a report from Newzoo, the global esports audience will reach 455 million people in 2021 – that’s an increase of nearly 10% from 2020. And what’s more, 57% of these viewers are between the ages of 21 and 35, which is a highly coveted demographic for advertisers and sponsors.
Secondly, the prize money up for grabs in esports tournaments is becoming increasingly large. In 2019, the total prize money awarded across all esports was $335 million – a year-on-year increase of 26.7%. And with more and more brands and organizations getting involved in sponsoring tournaments, this figure is only going to continue to rise.
Finally, as the industry continues to grow, there will be more opportunities for investment. This could be in the form of traditional investments such as buying shares in an esports organization or investing in an esport-related startup. Or it could be more creative investments such as backing a specific player or team. Whichever route you choose, there are plenty of opportunities for those looking to invest in esports.
The engaged audience
While the overall number of people who watch or play video games has stayed relatively steady over the past few years, the number of people watching other people play video games (esports) has skyrocketed. In 2012, an estimated 71.5 million people watched esports. By 2017, that number had increased to about 335 million people. And by 2019, the esports audience is expected to grow to about 443 million people.
One of the reasons for this growth is that there are now more ways to watch than ever before. In 2012, esports were mostly watched on television or through online streaming services like Twitch. But by 2019, there will be a proliferation of new platforms for watching esports, including traditional television networks like ESPN, dedicated esports channels like TBS’s Eleague, and social media platforms like Facebook and YouTube.
This growth in viewership has been accompanied by a corresponding growth in investment in esports. In 2012, global investments in esports totaled $130 million. By 2017, that number had grown to $696 million. And by 2019, investments are expected to total $1.5 billion.
There are a variety of reasons why investors are interested in esports. First and foremost is the engaged audience. Esports fans are some of the most passionate and engaged fans in all of sports and entertainment. They are also young and affluent: two demographics that are highly coveted by advertisers and sponsors
How to invest in esports
Esports is a form of competition that is facilitated by electronic systems, particularly video games; the input of players and teams as well as the output of the Esports system is mediated by human-computer interface. Esports often take the form of organized, multiplayer video game competitions, particularly between professional players.
A quick and easy way to invest in the esports industry is to buy shares in one of the publicly traded companies involved in the scene. Here are a few companies to consider:
Activision Blizzard (ATVI)
Activision Blizzard is one of the largest video game publishers in the world and owns some of the most popular esports franchises, including Call of Duty and Overwatch. The company also operates its own esports leagues, the Overwatch League and Call of Duty World League, and has partnerships with several traditional sports leagues, including the NBA and NHL.
Electronic Arts (EA)
Electronic Arts is another major video game publisher with a number of popular esports franchises, including FIFA, Madden NFL, and Battlefield. The company also operates its own esports league, the EA Sports FIFA Global Series.
Take-Two Interactive (TTWO)
Take-Two Interactive is a publisher best known for its Grand Theft Auto franchise but also owns a number of other popular gaming franchises, including NBA 2K and Red Dead Redemption. The company has been investing more heavily in esports in recent years and now operates its own league, the NBA 2K League.
Will these companies be good investments? Only time will tell. But if you believe that esports will continue to grow in popularity around the world, then these could be worth considering.
Investing in an esports team
The most common way to invest in esports is to buy shares in an existing team. Esports teams are usually set up as companies, so buying shares means becoming a part-owner of the business.
As with any investment, there are risks involved. Esports is a relatively new industry and it is not yet clear which teams will be successful in the long term. However, investing in esports could be a good way to make money if the industry continues to grow.
If you’re interested in investing in esports, you’ll need to research the different teams and decide which one you think has the best chance of success. You can then buy shares in that team through an online broker.
Sponsoring an esports event
If you’re interested in getting involved with esports but don’t necessarily want to invest in a team or player, another option is to sponsor an esports event. There are plenty of big events happening throughout the year, so if you choose this route you’ll have plenty of options to choose from.
The benefits of sponsoring an esports event are that you’ll be able to reach a large audience of potential customers, and you’ll also be able to form partnerships with some of the biggest names in the industry. However, it should be noted that sponsoring an esports event can be a significant financial investment, so make sure you do your research before making any commitments.
Conclusion
In conclusion, there is a lot of potential for investing in esports, but it is important to do your research and understand the risks involved before making any decisions. The industry is still young and growing, so there are plenty of opportunities for those who are willing to take the time to learn about it.
