The Investing News Network shares a year in review covering the top esports news stories in the emerging scene.
As we near the end of 2019, the Investing News Network (INN) is sharing a year in review for the biggest news stories in the emerging esports scene.
Throughout the year, esports continued to develop into an international gaming phenomenon as well as a growing investment opportunity.
With more and more esports-related companies entering the fray in the public markets, 2019 proved to be a critical year for the space. Read on for a look at some of the standout news stories for the blossoming esports industry.
To kick off our list, we have a talk with gaming information firm Enthusiast Gaming (TSXV:EGLX). Comscore, an analytics firm with tools for data tracking in media, indicated the company is one of the fastest growing in its category with 324 percent year-over-year growth in its total views for 2018.
INN got the chance to speak to Enthusiast Gaming CEO Menashe Kestenbaum about how his company was faring after merging with Aquilini Gameco and formerly public firm J55 Capital to become one of the world’s largest public esports companies.
“It gives us over 200 million gamers that we reach across both of our universes, so I think it’s the game of growth, of consolidation and kind of being the first to market in the largest way,” said Kestenbaum.
Next up, we have the popular Dota 2 The International 9 (TI9) tournament, which made history this year with a cash prize pool of US$34.3 million, representing the biggest award in the history of esports.
The winner, which was the five person team OG, took the championship for the second year in a row — the first team ever to do so — and walked away with a cool US$15.6 million from the tournament, which attracted over 66 million viewers.
In an interview with INN, Nick Mersch, associate portfolio manager at Purpose Investments, said that though Dota 2 is a non-franchised league, the size of its community has set it apart from its franchised contemporaries, such as Overwatch and League of Legends.
“These games grew pretty much from the ground up being supported by the community that plays the game,” said Mersch.
Our third story is the launch of Canada’s first esports exchange-traded fund (ETF) from Evolve ETFs.
The Evolve E-Gaming Index ETF (TSX:HERO) operates as a passive, index-based fund focused on companies that span the entire gaming industry, from software to game development.
The CEO of Evolve ETFs, Raj Lala, told INN that gone are the days when revenue generation stopped after customers purchased a game. Companies are now expanding their profits through downloadable content and advertising opportunities.
“In some cases, you could be spending hundreds, if not thousands of dollars on one specific game to continue to play it,” Lala added. “The revenue model has become more complicated, which obviously works out quite well for the companies.”
The sheer size of viewership attached to esports events continued to be a critical topic through the year. A report from Newzoo notes that esports accumulated 380 million viewers in 2018 and could end up reaching up to 557 million viewers by 2021.
INN spoke with Trevor Doerksen, CEO of ePlay Digital, about the firm’s NBA basketball league esports app and how it differentiates itself from other companies in the space. The company also discussed its previous partnerships with Intel (NASDAQ:INTC); ESPN, which is owned by The Walt Disney Company (NYSE:DIS); and Time Warner Cable, owned by AT&T (NYSE:T).
“I think what most technology companies do is we focus first on getting users and then we figure out how to monetize. I don’t think we’re probably that unique, but what we’re basically saying is let’s just do that all at once,” said Doerksen.
To cap off our list, we have a recent conversation with a collection of experts expressing their optimism for the investment trend in esports, based on renewed massive market appeal.
“The ability to monetize games is an order of magnitude larger than the ability to monetize traditional forms of content,” said Sean MacGillis, an investment banker at Haywood Securities.
The sentiment was echoed by Erik Dekker, senior vice president and portfolio manager with the Dekker Hewett Group at Canaccord Genuity, who noted that gaming is quickly outpacing other forms of entertainment in terms of sheer size.
“Gaming is bigger than film box offices, bigger than television, bigger than digital music. I think it’s about a US$116 billion market at this time,” Dekker told INN.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.