3 Big Esports Stocks to Watch

- February 20th, 2019

What’s the best place for esports investors to put their money? These three major esports stocks are a starting point.

After a long time growing steadily on the sidelines, esports is now beginning to come into the limelight as a potential investment opportunity.

Investors are beginning to see more institutional money enter the gaming industry, while the esports fanbase seems to grow exponentially and at a rapid pace month by month.

From gaming facilities being built in Canada and around the world, to merchandise vendors and advertising companies, stakeholders the world over are clamoring to claim their piece of the esports pie.

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Who could blame them? With esports market revenue estimated to be worth US$1.65 billion by 2020, there’s a lot to go around. So how can investors and speculators get in on the next big thing?

For starters, let’s take a look at some of the major stocks to watch out there in the esports space. These publicly traded esports stocks have ties to video games and gaming, and all had market caps above US$10 billion at the time of publication. They are listed in alphabetical order.

1. Activision Blizzard (NASDAQ:ATVI)

Current share price: US$42.78; market cap: US$32.64 billion

First on our list of large esports stocks is Activision Blizzard. This California-based interactive entertainment company has an impressive portfolio of popular games, including the ubiquitous and lucrative Candy Crush Saga, as well as World of Warcraft, Diablo, StarCraft, the Overwatch League, Call of Duty and many more well-known games.

The company has five operating units: Activision, Blizzard Entertainment, King Digital Entertainment, Major League Gaming and Activision Blizzard Studios. Both the Activision and Blizzard Entertainment departments create, publish and distribute video games, but they have different streams.

For instance, Activision works on games like Call of Duty, whereas Blizzard works on the likes of World of Warcraft and its related franchises. King Digital Entertainment is the department related to mobile games like Candy Crush Saga, and Major League Gaming works on community building and user experience. And finally, Activision Blizzard Studios is in charge of creating content for film and television.

The company covers a lot of ground and produces a huge number of video games that are played by both professional gamers on esports teams and casual gamers. It’s no wonder that this brand has gained a lot of recognition for being an industry standout and a video game stock with investing potential.

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2. Take-Two Interactive Software (NASDAQ:TTWO)

Current share price: US$88.67; market cap: US$10.03 billion

Take-Two Interactive is another company involved in esports that’s making waves. This stock to watch owns the labels Rockstar Games and 2K, both of which develop and publish products, plus its Private Division label and mobile game developer, Social Point. The company’s reach spans smart phones, tablets, consoles and desktop computers.

Its video game offerings covers many genres, from sports to action/adventure to role playing to family games. Among others, the New York-headquartered company owns titles such as the Red Dead franchise, the WWE 2K series, Grand Theft Auto and sports titles like the NBA 2K series.

The company is reportedly working with the NBA to launch an eleague for its NBA game, a move that could boost its esports footprint and involvement in the gaming industry.

3. Tencent Holdings (OTC Pink:TCEHY,HKEX:0700)

Current share price: US$43.42; market cap: US$411.17 billion

Unlike the other two companies listed, Tencent Holdings is a holding company as its name suggests. Its holdings are related to online games, software development, online advertising, applications on many different platforms, online music and fintech services.

As can be seen, the Chinese firm is not a pure-play esports company, but it has a massive footprint in the space via its ownership of Riot Games. Through Riot the company owns a stake one of the most popular video games in the world today, League of Legends.

League of Legends popular not only with players, but also with viewers. Esports tournaments all over the world are centered on it, and it has an enormous following from video game enthusiasts. Case in point: the League of Legends World Championship event pulled in 86 million hours of live viewership on Twitch, a subsidiary of Amazon (NASDAQ:AMZN) and one of the world’s biggest live-streaming video platforms for gamers. Riot Games is reportedly the most-watched channel on Twitch.

All that said, it goes without saying that Tencent has a great deal of influence when it comes to esports gaming viewership and the online gaming community, which could be the equivalent to the keys to the castle in terms of profits.

Which large esports stock would make a good investment, and why? Tell us in the comments if and how you’d make the leap into esports stocks investing and the gaming industry.

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

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