Esports started out as an underground culture, with video game tournaments held in various hobby shops and shopping malls. Now, CNBC reports that esports has entered the mainstream industry thanks to a growing digital native audience, who are typically around the ages of 18 to 25. This demographic also tends to watch more esports than traditional sports at times. Esports has been made popular as well due to platforms like Twitch and YouTube where you can stream and playback games. These factors have contributed to esports being worth around $1 billion in 2019, and it’s expected to reach $4.28 billion by 2027. With at least 2.7 billion gamers worldwide and a continuously growing audience, esports is a great opportunity for those looking for a good investment. Below are a few reasons why you should consider investing in esports:
It has a large earning potential
The most obvious reason to invest in anything is profit. And esports has a bright outlook. Statista shows that most of the market’s revenue, which is now at $641 million, comes from sponsorships and advertising. Its next highest source of revenue is media rights, which is around $192 million. It’s also worth noting that North America is one of the largest esport markets in terms of revenue. Another factor that can increase earning potential is that the number of esports viewers worldwide is expected to grow to at least 577 million in 2024, from 474 million in 2021.
Since gaming is now one of the major forms of entertainment in the U.S., it’s also unlikely that people will outgrow the industry. This means that the industry isn’t losing consumers as they age. If you invest now that it’s still fairly accessible to buy in, your capital is almost guaranteed to grow exponentially.
It has many investment options
Esports tournaments have evolved to the point of being major global events, such as the League of Legends World Championship and DOTA 2 The International, with millions of viewers and dollars in the prize pools as well. There are also well-backed teams, such as the Netherlands’ Team Liquid, which is known for their success in League of Legends and Starcraft II. As AskMoney points out in one of their trending articles, the esports leagues and tournaments are attracting more players and viewers. And if you’re looking to invest in this industry, there are various options available, too.
For instance, you can choose to hedge your bets on individual stocks like Logitech, which makes professional-grade gaming equipment. Alternatively, you can invest in exchange-traded funds (ETFs), which track certain collections of esports stocks for a lower price than individual stocks. For example, HERO invests in companies that stream or distribute esport content, produce esports hardware, and back competitive esports leagues. Among the many companies they have stocks of include Nintendo and Zynga. For businesses, another way of investing in esports is by sponsoring a player, team, or event, and partnering with a tournament platform like ESPL.
It may be a low-risk investment
The esports industry is new compared to the traditional sports industry, so there’s a lot of room for innovation. For your investment to be low-risk, it would be ideal to go for something that you’re sure is constantly adapting — and that’s exactly what the esports industry is known for. For example, Sony is known for its consoles and games. But even if they’re not releasing a new console or game, they work on updates that improve user experience, such as the recent first major update on the PS5 that allows PS5 games to be stored on a USB drive.
If you have a business, offering sponsorships for esport products can boost your brand visibility, which can help you reach sales goals. You also benefit from association; you can send out your products to esports players or events and have them be featured or at least mentioned, which can lead the legions of esports fans to be curious about and likely avail of what you offer. This is largely the case for brands like Razer and Corsair, which are two brands often seen used by popular esports gamers.
Esports is a relatively new industry. But there are already many low-risk and high-return options you can invest in, making it a worthwhile consideration. For more news on all things tech, finance, business, and marketing, check out the newest posts on Tech Tuskers.
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