The Investing News Network outlines four major reasons why investors should get excited about the esports sector, which is poised to be a US$1-billion industry.
With the esports market poised to become a US$1 billion industry and outpace traditional forms of entertainment, there are four key reasons that investors should be interested in esports.
While attending a StableView TECH conference in Toronto, industry insiders were given a glimpse into the ever-growing world of esports and how it has shifted from a platform for amateur gamers to one that has bred a profession.
The Investing News Network attended the “Esports, Sports and Entertainment: The Investment Opportunity” panel. Here, we outline the four major reasons why you should get excited about the esports and entertainment sector.
4 Reasons You Should Be Interested in Esports: The industry is new with growth potential
While the gaming industry has been around for decades, the concept of investing in a sector that gives gamers a global reach in terms of what they play, who they play with and how those things come together for an overall experience is relatively new.
Pushing the industry along further is the fact that it is breeding professionals who are fast becoming global legends on par with athletes and movie stars and thus causing its demand to grow and attract financial support from larger institutions.
“The fact is that the institutions, the bigger players, the bigger money, the support that the industry really needs is finally coming and recognizing how this (sector) has matured,” stated Menashe Kestenbaum, founder and CEO of Enthusiast Gaming (TSXV:EGLX).
“The mature sectors — the institutions and players coming down, there is amazing chemistry right now of a new industry I think we are seeing being born right in front of us,” he added.
Kestenbaum also added that market interest and financial backing has put the sector more firmly on the proverbial map, continuing to increase the amount of people participating in the gaming world and thus creating greater value for future investors.
4 Reasons You Should Be Interested in Esports: It is more accessible than standard sports
The esports and competition entertainment world has been attracting a growing number of users turned video game players due to its lower participation costs and easier physical access than the standard sporting industry.
“I really do think that this (industry) is going to far eclipse standard sports,” Kestenbaum explained.
“Especially because you don’t have to go buy US$500 worth of hockey gear and dress up,” he added.
If a growing industry can surpass the long-term, multi-billion dollar professional sports industry, that means that there is money to be made from it.
4 Reasons You Should Be Interested in Esports: People aren’t outgrowing the industry
While competitive gaming was once seen as something attributed to one’s youth, with images of video game competitions between college students, today’s esports and entertainment industry is not losing its consumers with age.
“People aren’t growing out of gaming as they get older,” Kestenbaum explained.
“Same as film, television, you don’t get out of the 90s and say you don’t like television anymore – you may like it more, so what we are finding is that this [gaming] is actually a predominant form of entertainment in North America right now…and it’s only going to continue,” he added.
Kestenbaum elaborates that there has been a shift and the esports games sector has become more mainstream and it is now considered major league gaming. This means that it will continue to attract more and more new users and increase the industry’s value on a whole.
4 Reasons You Should Be Interested in Esports: Low-risk investment due to constant evolution
One of the items that was stressed many times throughout the panel was the fact that this sector is never stagnant and will constantly be in a state of evolvement.
Scott Burton, CEO of Askott Entertainment, broached the subject by using the popular game Fortnite as an example of the esports and entertainment world’s ability to change and adapt to the needs of its community.
“I’m sure that everyone has heard about Fortnite and that has really come about because of technology. Suddenly Fortnite came out and because you could have one hundred people play at once and that created an entirely new excitement,” Burton explained.
“In terms of a risk perspective, as long as you are agnostic or you are with a company like Activision Blizzard (NASDAQ:ATVI), which is at the forefront of technology, they will always be adapting, they will always be cognizant of that,” he added.
In addition to the that attract both and , has picked up on the recent hype that surrounds the . YouTube is known for hosting a wide variety of videos that feature an individual gamer or , some of the most popular games for across the globe.
Chris Overholt, CEO of OverActive Media, added to the conversation saying that the top players in the industry have built enduring leagues and franchises that rest on the pillar of constant innovation and possess the ability to adapt with changing times, allowing for an industry that does not have room to falter.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.