The esports industry has gained much traction amid the pandemic due to online sports tournaments' rising popularity and increasing investments to grow user bases. So, we think fundamentally strong stocks in this space, Activision Blizzard (NASDAQ:ATVI) and Electronic Arts (EA), which are witnessing increasing demand for their new and attractive gaming features, could be solid bets now. Conversely, Esports Entertainment Group (GMBL) and Super League Gaming (NASDAQ:SLGG) are best avoided because of their declining financials and poor fundamentals. Read on.Thanks to the continued remote lifestyle, the esports industry has been gaining popularity with substantial increases in its user base. In addition, the efforts of e-sports companies to expand audiences by hosting live gameplay have helped fuel the growth of the esports market.
The global esports market is expected to reach $1,860.2 million by 2026, registering a 15.1% CAGR from 2021. Furthermore, Insider Intelligence estimates that monthly esports viewers will be around 26.6 million in the United States this year. Given this backdrop, we think it could be wise to scoop up shares of famous players in this space Activision Blizzard, Inc. (ATVI) and Electronic Arts Inc . (NASDAQ:EA), because they have robust growth potential.
However, with the rapid rollout of vaccines and easing restrictions, consumer spending is increasingly shifting toward outdoor recreation. So, we think fundamentally weak stocks in this space, Esports Entertainment Group, Inc. (GMBL) and Super League Gaming, Inc. (SLGG), might struggle to advance.