With esports events for games like DotA 2 selling out arenas in minutes, the esports industry is blossoming in Canada.
Canada’s role in the esports industry is on the rise. According to the Entertainment Software Association of Canada, 23 million Canadians were considered gamers in 2018, and the industry adds C$3.7 billion annually to the country’s GDP, including 21,700 full-time jobs.
As a whole, the Canadian esports industry is showing considerable magnitude and impact. Case in point: a study by Mintel entitled Attitudes Toward Gaming, Canada, released in February 2019, indicates that 22 percent of Canadians reported that they see traditional sports and esports as equally important.
In Newzoo’s fifth Global Esports Market Report, the firms projects that the global esports industry will reach US$1.8 billion by 2022. Revenues for the North American esports industry are expected to reach US$691.1 million by that time.
This growth will come as audience interest continues to grow. The game DotA 2, for example, has 10 million players. In August 2018, DotA 2 held a live tournament called The International 2018 at Rogers Arena in Vancouver. In a matter of minutes, the tournament sold out the stadium (which seats an audience of over 18,900). The prize pool for the tournament was C$27 million.
While the US and Asian esports industries are among the largest worldwide, the impact of Canadian esports stocks and the country’s esports industry are far from insignificant.
Here, the Investing News Network looks at nine Canadian stocks to watch within the esports industry. All are publicly traded companies in Canada and had market capitalizations of over C$5 million at the time of publication. Companies are listed in alphabetical order.
1. Axion Ventures (TSXV:AXV)
Market capitalization: C$213.27 million, share price: C$0.87
Axion Ventures, listed on the TSX Venture Exchange, released its first esports game, INVICTUS: Lost Soul, in May 2019. The mobile-focused game was released by True Axion Interactive, a joint venture between Axion Ventures and True, a company that is based in Thailand.
According to a release, retention rates after launch were above the mobile games industry average, with a 14 day retention rate of 12.3 percent versus the industry average of 7.8 percent. In addition, INVICTUS: Lost Soul ranked eighth in Google Play’s “Free Games” category on its opening weekend.
INVICTUS: Lost Soul is a sword fighting game that is played with a deck of cards. Each card represents a different skill at varying degrees of speed and customizable effects.
2. Enthusiast Gaming (TSXV:EGLX)
Market capitalization: C$80.05 million, share price: C$1.65
Founded in 2014, Enthusiast Gaming is a digital media company for the online gaming community. The company receives 1 billion ad requests weekly across its 80 video gaming websites. Enthusiast Gaming has over 150 million monthly visitors and an extensive social media audience; its audience spends an average of over 10 hours gaming weekly. In addition, the company hosts tournaments, including the largest live gaming expo in Canada, which attracts over 25,000 visitors.
In May 2019, Enthusiast Gaming announced plans to merge with J55 Capital (TSXV:FIVE) and Aquilini GameCo. Together, the companies will aim to develop a greater market share in the esports and gaming industries. The companies will have C$22 million combined in pro forma revenue and C$36 million in cash after the acquisition is completed.
3. EPlay Digital (CSE:EPY)
Market capitalization: C$5.78 million, share price: C$0.10
EPlay Digital creates mobile games, esports, sports and augmented reality (AR) games. The company has also developed Big Shot, an esports and sports game platform that brings together sports fans and lets users create fantasy teams, customize avatars and take AR selfies.
Mobovivo esports, a subsidiary of ePlay Digital, is designed to promote user engagement via broadcast integration and live streams while connecting advertisers with players on mobile platforms.
4. FANDOM SPORTS Media (CSE:FDM)
Market capitalization: C$10.15 million, share price: C$0.07
With over 12 years in operation, FANDOM SPORTS Media has created a mobile app that combines both traditional sports and esports. Fandom also has developed Fancoins for users, which can be used to earn rewards such as live events and experiences in addition to exclusive content.
FANDOM is currently developing a superfan campaign for its Arctic Invitation, taking place in Finland in September 2019. The Finnish Counter Strike: Global Offensive tournament will have players compete with individuals around the world as part of the event at the Hartwall Arena in Finland.
5. Global Gaming Technologies (CSE:GGAM)
Market capitalization: C$6.46 million, share price: C$0.06
Esports and gaming investment company Global Gaming Technologies has acquired a portfolio of assets extending from Videre Esports to X2 Games and St. Noire. It has minority interests in Millennial Esports (TSXV:GAME) and Game Galaxy.
Global Gaming’s Videre Esports is a source of odds, betting algorithms and statistics, and also has a proprietary betting platform. Videre Esports has live betting capabilities, along with player statistics and standings. It plans to launch its mobile and desktop website and apps in 2019.
6. Millennial Esports
Market capitalization: C$8.25 million, share price: C$0.05
Founded in 2011, Millennial Esports describes itself as a vertically integrated mobile gaming publisher. It has a number of different assets under its umbrella, including Eden Games, which publishes the racing game Gear.Club. Eden Games is using Amazon’s (NASDAQ:AMZN) global GameOn portal to scale the size of the competitions it runs in Gear.Club.
Millennial also offers both virtual and live tournament platforms, and the company’s thE Arena, located in Las Vegas, Nevada, is its first esports arena. It serves major clients like Amazon.
In addition, the company produces industry analytics through StreamHatchet, which it acquired in 2017.
7. Versus Systems (CSE:VS)
Market capitalization: C$24.85 million, share price: C$0.24
With headquarters in Vancouver, Versus Systems has created a platform called Winfinite that connects advertisers and players. Launched in June 2018, Winfinite allows players to compete for prizes awarded by advertisers to promote greater engagement. Versus Systems has since partnered with NASCAR Heat Mobile, Rockstar Energy and Tier1.
8. Victory Square Technologies (TSXV:VST)
Market capitalization: C$20.55 million, share price: C$0.28
The company’s management team focuses on accelerating growth, revenue and liquidity for its holdings, including the first publicly listed blockchain company, Interbit (TSXV:IBIT).
V2 Games, one of Victory Square’s holdings, is an investment company that puts money into in esports and video game companies. In early 2018, V2 Games announced that it built a C$10 million seed fund designed for investment in esports and video game ventures. Half of the fund is designated for Canadian gaming companies, while the other half has a global focus.
9. YDX Innovation (TSXV:YDX)
Market capitalization: C$8.86 million, share price: C$0.10
YDX Innovation, formerly YDreams, has over 18 years in business with a focus on esports, virtual reality and AR. It has three main divisions: YDreams Global, Arkave VR and Game On Festival.
The company announced the creation of Game On Festival early in 2019. Under the initiative, YDX Innovation will aim to organize a number of esports events across North America focused on creating an engaging and immersive experience for all ages, including parents. Game On Festival will also incorporate the history of esports as part of the event.
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Securities Disclosure: I, Dorothy Neufeld, currently hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: FANDOM SPORTS Media, Millennial Esports and YDX Innovation are clients of the Investing News Network. This article is not paid-for content.