Esports Could not Only Outperform Traditional Sports; it Could Help Keep them Alive

Alessandro Bruno
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Given the human predisposition for competition – and the need for distraction and entertainment – it was inevitable that someone would organize the consumption of videogames into a competitive sport. It even more inevitable that savvy entrepreneurial-minded individuals would find a way to profit, and handsomely at that, from it.

 

And there you have it: eSports, nothing less and nothing more than the combination of competition, videogames, and greed. Fans, spectators, and even everyday old investors, who couldn’t care less about the activity, all have a chance to share in the fruit of that greed.

The main risk is that in a rush to create teams to compete in video games, there will be many kids left to their own devices, avoiding homework and physical activity, suffering the unpleasant consequences of the sedentary, postural, and eyesight tendency of electronic games.

But, it seems inevitable that given the explosive potential of eSports that traditional sports clubs may find it necessary to expand by including an eSports ‘component’ and gamers to their organization. Accordingly, Samsung bought a League Of Legends team (Samsung Galaxy), itself acquired by KSV, an esports team company in 2017; while the Philadelphia 76ers were among the first to buy an eSports team, the ‘76ers Gaming Club’, which is one of 17 teams competing in the NBA2K. New, specially dedicated companies such as newly listed New Wave Esports Corp. (NWES.WT) are operating on a business model involving the investment and support of the eSports industry as a whole. The Toronto and Los Angeles based company acquires or invests in eSport-based businesses to improve operations and boost profitability. New Wave is betting on the growth of e-sports, and its goal is to speed up its development by supporting related technologies and the enhancement of experiences for players, fans, and investors alike. New Wave is likely the first of a ‘new wave’ of companies that will serve as catalysts for eSports growth.

It’s also likely, if not inevitable that the software companies behind the most popular games will organize competitions. Moreover, the former may end up competing with the latter (sports team vs. software firm). In other words, eSports will serve both as a tool to generate more revenue and sell more seats in the stadiums. Video games, which draw youth and their parents, can be used to fill stadiums (empty seats at sporting events are one of the trends of our time) by hosting-related eSports events in the sports arenas themselves before, after, and during a significant event.

ESports are older than most people expect: Atari organized a Space Invaders tournament in…1980. Today, however, the games are radically different. Technological evolution (the development of internet and gaming platforms) and the idea of ‘video game’ as general entertainment, fueled by the YouTube player, i.e., YouTuber, thanks to streaming platforms (Youtube and Twitch ), have allowed, or induced, the gathering of players, and competitions, from all over the world.

Esports has become so alluring that, in a short period, a massive number of followers have become drawn to it, fueling the ‘circus’ and the money that it produces. Simply put, eSports is a multi-million-dollar business, well on the way to becoming a multi-billion dollar one. Indeed, eSports is a global phenomenon, which could soon surpass the popularity of traditional sports against which it competes through streaming services. The one shortcoming that eSports has compared to its ‘analog’ cousin is there are so many possibilities that its course of development is unclear.

What is clear is that there are multiple ‘streams’ or themes around which eSports are evolving. Some of the most popular genres are e-versions of popular sports such as FIFA soccer or NBA-2K series, First Person Shooter, such as ‘Call of Duty,’ Third Person Shooter such as ‘Gears of War,’ cooperative shooter survival multiplayer online battle arenas. Each has individual characteristics, and each has its own dedicated tournaments. The various ‘disciplines’ of the eSports Olympic universe have the ‘playing field,’ or rather the ‘platform’ in common; traditionally, the PC but also the ‘console’ (PS4, Xbox One, and Nintendo WiiU, Nintendo Switch).  The choice of one over the other comes down to the individual level of performance: certain games work better when the player uses a keyboard and a mouse rather than a joystick. Until recently, the way to profit from video games and their popularity was to invest in the companies creating the games (for example, Electronic Arts NASDAQ: EA) or the console makers.

But, that was before the eSports phenomenon emerged.

The numbers of viewers on social media and in live events have established eSports as a driver of revenue generation. For example, while the actual, ‘real-life’, NBA finals Race 7 between Cleveland Cavaliers and Golden State in 2016 were followed by 31 million spectators, the League of Legends World Finals in Berlin attracted 36 million spectators. And the phenomenon is growing fastest in the area of the world with the highest population: Asia. South Korea leads the standings, but the esports phenomenon is expanding in Europe and, of course, in North America. ESports may soon gain Olympic credibility and credentials, as it will be part of the sports in the Asian Games in 2022. (Source: gamesindustrybiz)

Alessandro Bruno

Alessandro Bruno

Alessandro Bruno, born in Naples, (BA and MA in International Relations, University of Toronto). Alessandro is a research analyst and writer in various business sectors and international politics. He was a Programme Officer for the UN in North Africa and a senior for one of the first international sustainable investment...
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