3 Australian Esports Stocks

- June 6th, 2019

Emerge, Esports Mogul and iCandy Interactive are Australian esports stocks that are making moves in the gaming space.

With major esports tournaments garnering sponsorships from multinational companies, including Samsung (KRX:005930), Mercedes-Benz (ETR:DAI) and Coca-Cola (NYSE:KO), the esports market and gaming industry continue to gain traction. 

Esports Earnings reports that prize earnings worth over US$611 million have been won within the esports industry over two decades, based on available public records. The largest prize pool was worth over US$25.53 million for DotA 2 in 2018.

Overwatch League (OWL), the largest esports league, has US$5 million in its prize pool, according to Android Authority. OWL is Blizzard-Activision’s (NASDAQGS:ATVI) official esports league for its hit first-person hero shooter Overwatch. In 2018, it was the most watched esports league, mostly because of the sheer number of hours the league was broadcast.

Down in Australia, the Australian Esports Association notes that research on the esports industry in the country is fairly difficult to obtain. The University of Melbourne’s esports viewership study comes as an exception. In September 2018, the school estimated in a report that world esports championships attracted at least 300,000 Australian spectators in 2016 and 2017.

It further highlighted that seven of the most popular esports games were Fortnite Battle Royale, Hearthstone, Overwatch, PlayerUnknown’s Battlegrounds, Counter-Strike: Global Offensive, DotA 2 and League of Legends.

Below the Investing News Network looks at three Australian esports stocks listed on the Australian Stock Exchange (ASX) for investors to watch within the industry. All are publicly traded companies that had market capitalizations of over AU$10 million at the time of publication, as shown through Investing.com’s stock screener. Companies are listed in alphabetical order.

1. Emerge Gaming (ASX:EM1)

Market capitalization: AU$14.42 million

Emerge Gaming launched ArcadeX, its esports platform, in 2016. ArcadeX has now hosted over 10,000 online tournaments. The platform allows users to compete to earn rewards and prizes, including digital assets and merchandise, and enables users to develop rankings through sponsored tournaments.

The ArcadeX platform has been extended through a number of markets since launching. In March 2019, Emerge Gaming partnered with Digital Circus to bridge its esports platform into North America. In April 2019, the company reached an agreement with distribution agent Netsport Media to broaden its platform to Africa and the Middle East. Netsport Media currently has a network reach in over 49 countries across these markets.

In addition, Emerge Gaming established an agreement with iCandy Interactive’s (ASX:ICI) global network of 350 million gamers. ICandy Interactive will provide content while Emerge plans to develop a customized league platform that will be promoted to iCandy’s extensive user base, called iLeague. The companies plan to split revenues from the proposal equally.

In March, Emerge raised AU$1.8 million to launch ArcadeX across Australia and Africa, in addition to GameCloud, its mobile game streaming technology.

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2. Esports Mogul (ASX:ESH)

Market capitalization: AU$19.11 million

Esports Mogul has developed a tournament platform that focuses on the Australian and Southeast Asian markets. Mogul Spotlight allows users to watch esports players compete and gives them the opportunity to bet on matches; in February 2019, the company’s user base reached 1.5 million gamers.

That same month, Esports Mogul launched its esports wallet, called Mogul Wallet, which allows users to store virtual rewards from competitions and withdraw and deposit funds.

The company further projects partnerships with Malaysia-based eplatform provider Razer. A proposed epayment platform will be able to accept over 130 currencies and numerous deposit forms, including methods for those who do not have traditional banking accounts.

In April, Mogul announced plans to launch the first Apex Legends tournament for Australia with AU$35,000 in prize money.

3. iCandy Interactive

Market capitalization: AU$15.07 million

Originally founded as an investment holding company in 2015, iCandy Interactive develops and publishes games that have a combined audience of over 350 million players. Some games in its portfolio include Garfield Games, Astro Boy Games, Ancient Secrets of the Mummy and Dark Dot.

As mentioned, in conjunction with Emerge Gaming, iCandy is developing a new esports league entitled iLeague. The iLeague tournament will be hosted on Emerge Gamings’ ArcadeX entertainment platform. In addition, iCandy will have the ability to employ its mobile game developers to create new games for the iLeague platform.

In 2018, Germany-based eSports.com subscribed to over AU$1.3 million in iCandy shares as part of an investment agreement in which it purchased 16.5 million shares at AU$0.08 each.

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Securities Disclosure: I, Dorothy Neufeld, currently hold no direct investment interest in any company mentioned in this article.

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