The rise of esports investments

William Davis Published 17/07/2021

The rise of the esports and gaming industry has reached incredible heights over the past two decades.

Researchers and analysis has found that esports will reach $3.5 billion by 2025. And as a multi-billion industry, it offers tons of business opportunities. But how well is this industry ranking on the public market? Is investing in esports a smart thing to do? Let’s find out more about it!

Esports stocks

Publicly traded companies on the public market are helping the industry gain exposure. Some of these companies have expressed their feelings about the esports market by investing in it. Tencent decided to invest in the sector and now own Riot Games, which is responsible for the creation of one of the most popular esports titles, League of Legends.

Moreover, YouTube recognized the potential of its streaming services combined with esports and signed a broadcasting contract with FACEIT. By partnering with this gaming platform, YouTube gets to stream one of the biggest esports events, the Esports Championship Series (ECS) pro gaming league.

Sony also has a partnership with ESL to power Sony Playstation Vue. The IT giant partnered up with the gaming tournament organization to create a 24 hours esports TV network.

These partnerships and investments contribute only a small portion to these IT giant’s revenues, leading to the conclusion that public market investing is not the best way to gain exposure to the sector.

Investing in private markets

Private investing is one of the most common types of investment when it comes to esports. It seems that more and more people are gaining interest in esports.

Even esport betting is on the rise and many people have started placing wagers on competitive gaming. Many games are available to bet on at different online betting platforms. Stake.com offers a huge variety of online games, including Dota 2, League of Legends, and Counter-Strike: Global Offensive. This is part of the reason esports investments have become more popular.

Still, this sector seems to lack conventional, professional investors. The main concern of the conventional investors is often the risks that come with the action including deal volume in particular. Most of them are worried about whether there is sufficient deal flow in the sector to validate resources and time spent.

Numbers say that esports and game streaming startups manage to get to the $714 million via such deals and some say that the number might be even higher than that. The lack of knowledge surrounding the esports industry makes some investors hesitant.

Should you invest in esports?

The esports industry went from niche industry to mainstream pretty quickly the last few years. Would it be smart to invest in it now?

While some think that now is the perfect time to invest in esports, other investors find this too complicated. Yes, there is a range of investment opportunities when speaking about this sector but this is precisely why some investors might be holding back from making a move.

However, with the advancements in the industry, different monetization strategies for the community base are emerging. This can make the doubting investors question whether they will be better off investing at this moment.

William Davis

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