After reaching the highest trading exchange in Canada, Enthusiast Gaming examines what’s ahead for esports in the capital markets.
After joining Canada’s senior exchange, the team at Enthusiast Gaming Holdings (TSX:EGLX,OTCQB:ENGMF) is confident it can now reach institutional money at a global level.
As esports expands on its path of growth, the capital markets are racing to meet investment interest from a sector that’s expected to reach a value of US$1.79 billion by 2022.
The Investing News Network (INN) caught up with Julia Becker, head of investor relations and marketing with Enthusiast Gaming, following the company’s uplisting to the Toronto Stock Exchange (TSX).
Becker said the graduation may encourage more institutional investors take an interest in the company and the esports scene as a whole. While it has been tricky to crack down on revenues and profitability paths in the esports market due to the immense hype, Enthusiast Gaming feels confident in its position thanks to the number of gamers it reaches.
Becker told INN the company, through its many platforms, interacts with 200 million gamers per month.
Enthusiast Gaming operates on a variety of levels across the esports sector since it owns a network across North America and the UK, including websites and YouTube channels related to gaming. In a more active sense, the firm manages seven professional esports teams, including the Vancouver Titans from the Overwatch League and the Seattle Surge from the Call of Duty League.
The following interview has been edited for clarity and brevity. Continue reading for more of Becker’s thoughts.
INN: Can you explain how institutional investors view the esports space at the moment?
Julia Becker: I think with any industry in any sector, as it starts to mature you start to gain more visibility and attraction from large institutions. Certainly, some institutions like to take a more high-risk approach to their portfolio and come in early days.
But the fact is it’s still quite early in terms of growth and where it’s going. But I can say that over the last year, year and a half, the interest from institutions … has grown significantly, both in Canada and the US.
Certainly being listed on the TSX now provides us with credibility, more so on a global level, and we’re starting to have conversations with institutions. Globally, we’re more recognized as a legitimate business and a more credible investment.
INN: What are some of the questions you still get from investors trying to understand the space and get involved with esports names?
JB: We look at the industry in four main buckets: there are the publishers that make the game, there are the teams that actually play the game, there are the in-person events and there are the platforms.
A lot of the questions that we’re still getting are very high level and (relate to the) general landscape about gaming and esports. And about differentiating what is esports and what is video gaming, and why the sectors are so large and growing at a significant rate.
The question that we continue to get is, “How do you make money in this sector?” I think a lot of the teams and esports are still trying to figure that out. The reason Enthusiast Gaming is positioned so well in the industry is because we’ve figured that out. When I look at the four buckets, platforms are the real moneymaker right now, like Enthusiast Gaming or a Twitch [owned by Amazon (NASDAQ:AMZN)] or a Discord, because they can provide the most scale and reach.
Another key question we get asked is, “Where is the sector going and what direction?” I mean, there are many opportunities for growth … I don’t think we really know that quite yet.
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Securities Disclosure: I, Bryan Mc Govern, 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.