Esports became popular with live streaming services like YouTube and Twitch. Multiplayer competitions entered the video game culture across various genres. They include multiplayer online battle arena (MOBA) and first-person shooter (FPS) games.
In 2019, there were nearly 200 million esports enthusiasts (players) worldwide, with almost 400 million viewers.
In 2021, the worldwide esports market grew to a $1 billion industry. The industry comprised $641 million of that total for advertisements and sponsorships.
The esports market may skyrocket to $1.6 billion by 2024—with over 285 million enthusiasts and more than 577 million followers.
Let’s look at the investment potential of esports gaming stocks.
Activision Blizzard (ATVI)
The merger of Activision and Blizzard in 2008 might have been one of the earliest signs that investing in esports could be worthwhile. Activision Blizzard (ATVI) became an industry behemoth with popular titles like World of Warcraft, Call of Duty, Overwatch, and StarCraft.
As of September 2023, Microsoft may capture a significant portion of the esports market by acquiring Activision Blizzard for $68.7 billion. For the deal to gain approval from the U.K. Competition and Markets Authority, Microsoft must sell most of its streaming rights for Activision’s games to Ubisoft.
Publicly traded on the NASDAQ stock exchange and S&P 500 Index, ATVI maintains a market cap above $70 billion. It generated $8.71 billion in revenue in 2022.
ATVI began 2023 at $76.50, peaking at just under $94 in July.
The stock saw steady growth between 2013 and 2018 after a flat period between 2009 and 2012.
With a current price of around $92 and an all-time high of about $102 in February 2021, analysts suggest that rather than buy or sell, investors should hold ATVI.
There’s an October deadline for Microsoft’s acquisition of ATVI and an earnings report in early November. That might provide a solid entry point for long-term investors.
Electronic Arts (EA)
With more than 450 million registered players worldwide, as of 2021, Electronic Arts (EA) represents one of the top companies in the esports market. With the EA Sports moniker, its most prominent titles include Madden and FIFA.
The FIFA Global Series includes solo-play and team-based competitions. EA Sports FC 24 features HyperMotionV and a Frostbite Engine to mimic the movements and playing styles of over 19,000 professional players.
The 2024 Madden Championship Series (MCS24) offers a total prize pool of $1.7 million. Broadcasts began at the start of the 2023 – 2024 NFL season.
MCS24 permits online players 16 and older from the U.S., U.K., Canada, Mexico, and Germany with a valid EA account to compete in 1v1 tournaments for cash prizes.
EA on the NASDAQ reached all-time highs above $140 in 2018, 2020, and 2021. It touched the previous ATH in 2022 and again in July 2023.
While it hovers around $120, analysts predict EA might break through its ATH within the following year.
Casino Stocks
Online sportsbooks and casinos were typically separate entities. However, the rise of legal sports betting in the U.S. gave new incentives for gambling companies to seek revenue from the gaming industry overall.
Today, dozens of online casino reviews help newcomers find their niche.
While offshore gambling sites offer players legitimate platforms from reputable companies, investors looking for casino stocks must choose from regulated exchanges.
Top casino stocks include MGM Resorts (MGM), Las Vegas Sands (LVS), and Wynn Resorts (WYNN).
Market analysts continually predict a profitable future for the worldwide gambling market, with sports betting and online wagering revolutionizing the industry.
By 2032, the global gambling industry might be worth almost $850 billion, nearly double its value of $450 billion in 2022.
While considered “sin stocks,” holding equity in casinos may help to diversify a portfolio balanced with esports investments.
Esports in China and the Rest of Asia
Investors looking for beneficial gains in esports stocks must consider the world’s top market—China. With 488 million esports users in 2022, the country of more than 1.4 billion people maintains the most prominent active players and gaming revenue market.
Tencent Holdings (OCT: TCEHY) is a tech giant serving over 1 billion users worldwide, including the popular social communication platform WeChat.
With over 100 million daily players, Tencent Games published and released Honor of Kings in 2015. As the most-played mobile MOBA, the Honor of Kings International Championship is scheduled for late 2023 in Shanghai—with a whopping prize pool of $10 million.
Players in the Honor of Kings International Championship will include those from Thailand, Vietnam, Taiwan, and elsewhere in Asia and worldwide.
Released in 2009, League of Legends (Riot Games) is another popular MOBA Tencent title. Another team-based competition, the League of Legends World Championship (Worlds), is scheduled for October-November in Seoul and Busan in South Korea.
The Worlds tournament in 2023 will feature 22 teams in three stages, with ticket sales open to the public.
Is China the Future of Esports?
VALORANT, the 5v5 tactical shooter game from Riot Games, launched in China in July after a freeze on game releases and overall gaming restrictions placed on minors. Even with the bureaucratic roadblocks, China may still represent the future of esports.
In 2003, China recognized esports as an official sport. By 2019, the Chinese government began recognizing esports as an official profession. The country is now home to dozens of esports leagues and organizations.
Elsewhere, gambling sites have also started to include categories for esports. Bettors can wager on virtual sports, too.
Investors wary of China should monitor exchanges in Hong Kong and New York for a well-balanced investment strategy in esports stocks.
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