Investing in Esports: Unleashing the Potential for Profits in 2023

As video games have become an integral part of everyday life for millions of people, esports has emerged as a thriving global market. With an audience of over 530 million in 2022, according to market research firm Newzoo, esports has captured the attention of investors seeking significant profits. If you’re considering investing in esports, here’s everything you need to know.

Fast facts about esports

In its early years, esports may have seemed unusual to non-gaming enthusiasts, but it has quickly gained a substantial following. Newzoo projects that the global esports audience reached a staggering 532 million in 2022, with half of them being “esports enthusiasts” who regularly consume esports content. The Asia-Pacific region, North America, and Europe currently dominate the esports market, with Asia-Pacific alone accounting for over half of the global audience. Latin America is also expected to experience significant growth in this sector.

Notably, several companies have already made substantial investments in esports. Microsoft’s pending $68.7 billion deal for Activision Blizzard, which owns popular games such as Call of Duty, StarCraft, and Overwatch, could be the largest investment yet. While the deal faces regulatory challenges, both companies are confident about winning in court, asserting that the acquisition will not harm competition.

Expansion of esports platforms

As esports has grown, various platforms have emerged to cater to the ever-increasing demand for interactive content. Twitch, owned by Amazon, gained popularity early on and remains one of the largest platforms today. At any given moment, Twitch has approximately 2.5 million viewers, and in April 2023 alone, Twitch users consumed over 1.7 billion hours of content. Meta Platforms, with its Facebook Gaming platform, and Alphabet’s YouTube are also experiencing success in the gaming industry. However, it’s worth noting that certain platforms, including Twitch, are inaccessible in China, where esports has a massive following. Chinese users rely on platforms such as iQiyi, Tencent Video, and Youku.

Top live streaming platforms in Q1 2023

1. Twitch – 4.26 billion hours
2. YouTube Gaming Live – 1.38 billion hours
3. NimoTV – 347.5 million hours

Source: Streams Charts

How to invest in esports

If you’re interested in investing in the flourishing esports market, there are several options available.

• Individual stocks: By purchasing shares of a company, you become a stakeholder. Investing in individual stocks requires more research and carries higher risks compared to investing in funds. However, it also offers the potential for significant profits.
• Dedicated funds: Investing in mutual funds or exchange-traded funds (ETFs) that focus on esports companies provides a less risky approach. With a diversified portfolio, these funds reduce the risk associated with individual stock investments. Pay attention to the fund’s fees, as lower fees improve overall returns.

Before you can invest in any security, you’ll need to open a brokerage account and deposit funds. Opt for online brokers that offer reliable research tools to help you make informed investment decisions. Once you’ve made your decision, executing trades can be done in just a few seconds.

Celebrity investments in esports

Esports has attracted investments from well-known celebrities, including basketball legends Michael Jordan and Magic Johnson, as well as music star Drake. Jordan and Johnson are both investors in aXiomatic Gaming, the parent company of Team Liquid. Drake invested in the esports organization 100 Thieves in 2018, alongside producer Scooter Braun. Other celebrities reportedly investing in the esports industry include Stephen Curry and Andre Iguodala, Steve Young, Sean Combs, Kevin Durant, and Odell Beckham Jr.

Types of esports stocks

As the esports industry continues to evolve, there are various avenues for investors to capitalize on its growth. Here are a few options to consider:

• Game developers: Investing in companies involved in game development, such as Activision Blizzard, Electronic Arts, or Take-Two Interactive Software, offers a straightforward entry point into the esports and video game industry.
• Esports teams: While investing in esports teams can be challenging due to many of them being private companies, some teams, such as AFC Ajax, are publicly traded. Media giant Comcast also owns an esports team.
• Gaming hardware: Companies like Microsoft, Sony, and Meta, with their respective gaming consoles and virtual reality technology, present investment opportunities in the gaming hardware sector.
• Esports gambling: As gambling gains popularity in the sports world, esports is no exception. DraftKings, a leader in sports betting, also offers esports options.

Esports stocks to consider

*Note: Market cap data as of May 31, 2023.

Esports ETFs to consider

*Note: AUM data as of May 30, 2023.

The future of the esports industry

Despite its rapid growth, esports is still in its early stages of development. Only time will tell whether it will become a mainstream sport alongside more traditional ones like baseball, basketball, and football. Mobile gaming and live esports betting offer promising opportunities for pushing esports to new heights.

While we may currently be in a “golden age” for esports, it accounts for less than 1 percent of the overall gaming market. This statistic highlights the immense potential for future growth and the challenges that lie ahead.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.

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