Video games are no longer reserved for teenage boys. In fact, the booming eSports industry attracts hundreds of millions of viewers across the globe of all ages.
By 2022, the eSports audience is expected to reach 300 million and surpass the viewership of most US professional sports.
What's more, the burgeoning eSports market could reach a whopping $3 trillion USD by 2025, representing a CAGR of 18.58%.
Savvy investors who are looking for the next big thing after the crypto and cannabis booms may want to consider investing in stocks that are involved in this growing industry.
From video game developers to gaming platforms to eSports tournaments, there are endless opportunities to gain a slice of the eSports market.
How to Invest in the eSports Industry
For those who don't know, eSports are video games played competitively by professional gamers for an audience.
To give you an idea of just how big this industry is becoming, let's look at the numbers.
The 2018 Mid-Season League of Legends Invitational tournament had a record 60 million unique viewers and boasted a prize pool of $6.4 million. Meanwhile, Valve's Dota 2 world championship offered a massive prize pool of $25.5 million.
At present, the industry is dominated by industry giants like Electronic Arts (NASDAQ:EA), Sony (NYSE:SNE) and Tencent Holdings Ltd. (OTCPK:TCTZF). However, there are a number of small-cap companies that offer promise to the market.
One way investors can gain access to eSports stocks is through exchange-traded funds. There are a few out there that already cater to the eSports market.
One of which is the PureFunds Video Game Tech (NYSE:GAMR), the first dedicated video game ETF listed in the US.
The fund has been successful in its first three years, with $100 million in assets under management, and is now home to nearly 80 stocks.
The VanEck Vectors Video Gaming and eSports (NYSE:ESPO) is another great option. The fund includes a group of globally diversified eSports and video game companies from game development to related gaming hardware.
A third dedicated eSports ETF is expected to arrive in Canada in the coming months, as well. Evolve Funds Group Inc. filed a preliminary prospectus in May for the Evolve E-Gaming Index ETF., which will be trading under the ticker "HERO" and will track the Solactive Electronic Gaming Index—a group of stocks involved in software, hardware, and services directly connected to the eSports industry.
Investing in eSports Stocks
If you prefer to invest in individual stocks, there are some great options out there to choose from.
One of which is Take-Two Interactive Software Inc (NASDAQ:TTWO), a company that develops and publishes games through its wholly-owned labels Rockstar Games and 2K.
Then there isGlu Mobile Inc (NASDAQ:GLUU), a US mobile games developer and publisher. Glu's portfolio includes award-winning IP titles like Cooking DASH, Deer Hunter, MLB Tap Sports Baseball and Kim Kardashian: Hollywood.
You can also opt for digital media companies that work in the eSports space like Enthusiast Gaming Holdings Inc (TSXV:EGLX). Enthusiast has created an online platform with over 80 gaming contest websites and boasts more than 75 million active users every month.
The company also hosts Canada's largest video gaming expo, EGLX, which had over 55,000 attendees in 2018.
Fandom Sports Media (CSE:FDM) is another company that creates platforms for fans. The entertainment company is focused on curating and creating fan-focused content and created the FANDOM sports app to allow fans to share their passions, pick fights with other users and even earn rewards.
In short, there are a number of ways investors can gain a piece of the growing eSports market.
If you are interested in the eSports industry, now is definitely the time to get in on the action.