Investing in eSports: The Millennial Vice
The e-Sports-related stocks (also known as Gaming or simply video games) have been among the fastest-growing in recent years. Since the advent of console games in the 1970s, offering black and white 2D games, the video and entertainment console industry has grown dramatically. They involve cutting-edge technology and, many times, are the leading promoters of new technologies, such as motion detection, facial recognition, 3D graphics and virtual reality.
The growth and turnover of e-Sports companies have been so significant that some Blockbuster Games get larger development budgets than the most famous Hollywood movies. According to the ESAF (Entertainment Software Association Foundation), over the last five years, spending on video games in the United States has grown by an average of $ 1.38 billion annually, reaching $ 30.4 billion in 2016. The Video Games subsector Console represents 80% of this total.
In this industry, operate the different companies that develop consoles, games, online game apps, peripherals, and the firms that produce the hardware necessary to play games.
Financial Instruments of the eSports Market
Assuming that the eSports market will experience exponential growth over the next few years, the profit potential with investments in this area will also do so. Here are some investment options:
Buy Shares of Companies that operate in eSports: As an introduction, and without trying to give an investment recommendation, the most prominent companies listed on Stock Exchanges (many are private) and that in a better position in the Gaming market are: NVIDIA, Sony, Nintendo, Electronic Arts and Activision. We detail a few of the top ones following.
Buying an "eSports Index" provided on a Trading platform is one of the simplest options to gain financial exposure to the eSports market. By purchasing several shares or units in a financial instrument provided by a Trading platform, you get, on the one hand, exposure to the market, but at the same time, an essential diversification.
Top Stocks in the Gaming Segment
Google: No need to introduce this company.
Microsoft: Creator of the XBOX console.
Tencent: This Chinese Internet-based tech company is focused on social platforms and digital content and develops products such as social communication platforms, WeChat and QQ.
NVIDIA: This company designs and markets graphics processing units (GPUs) that serve professionals in the gaming industry.
Intel: This technology company is a semiconductor and chip maker that partners with manufacturers, including Apple, HP, Lenovo, Dell, and others. Company products include processors, chipsets, FPGAs and programmable devices, power solutions, memory and storage solutions, and more.
Sony: Creator of the PlayStation console.
Glu: Glu Mobile develops, markets, and publishes free-to-play mobile games for smartphone and tablet users.
Sea: In 2019, Sea launched Call of Duty®: Mobile, a mobile version of the classic action game.
Turtle Beach: The firm is known for its range of gaming headset solutions for various platforms, including video game and entertainment consoles and personal computers.
Bilibili: The company offers a platform for immersive entertainment experiences for the younger generation in China. Anime, comics and games inspire the content and cover various genres and media formats today, including videos, live broadcasting, mobile Gaming, and more.
Logitech: This technology company offers personal computers and mobile products. Logitech Brands include Logitech, Ultimate Ears, Jaybird, Blue Microphones, ASTRO Gaming and Logitech G.
Zynga: This company may have started as a Facebook app developer but has since proven itself to be quite the gaming empire after acquiring Challenge Games, Newtoy and Omgpop, among others.
NetEase: The company provides online games, web-based communication services, and interactive content in China.
Activision: Activision Blizzard's portfolio includes World of Warcraft®, StarCraft®, Diablo®, Hearthstone®, Heroes of the Storm™, Candy Crush®, and many other games.
Kingsoft: Kingsoft operates four subsidiaries: Seasun for video game development, Cheetah Mobile for mobile internet apps, Kingsoft Cloud for cloud storage platforms, and WPS for office software, including WPS Office.
AMD: Advanced Micro Devices Inc. (AMD) creates high-performance computing, graphics and visualisation technologies for Gaming, immersive platforms and the data centre.
EA: This global digital interactive entertainment company develops and delivers games, content and online services for internet-connected consoles, mobile devices and personal computers. Electronic Arts have more than 300 million registered players worldwide, and its portfolio includes games such as The Sims™, Madden NFL, EA SPORTS™ FIFA, Battlefield™, Need for Speed™, Dragon Age™ and Plants vs Zombies™.
Corsair: Corsair Gaming Inc is a technology company developing and manufacturing various products aimed at gamers, content creators, and PC users. The company provides PC components, streaming equipment, peripherals, and equipment to a global customer base, including gaming headsets, USB flash drives, DDR3 memory upgrades, speakers, and keyboards.
How to Invest in eSports in 6 Steps
But if the eSports market is consolidated and is supposed to grow in the future, how do I invest? Here we summarise the steps.
Learn about the eSports Market and choose the Financial Instrument you will operate. If you select a Gaming stock, select the one you think has the most significant growth potential.
Choose the Online Broker with which you will trade the chosen financial asset. The Broker will be the intermediary you will use to invest in the shares.
Open a Trading Account with the Online Broker. In general terms, the account opening process with a Trading platform is online and completed in a few days. However, using a Demo account to test how to use the Broker's platform is a quick process, requiring just a few clicks.
Deposit Money in the Account. Many of the Brokers (almost all of them) do not have minimum deposit amounts. You can start investing in eSports Assets with a few dollars or euros. In turn, many platforms allow deposits with credit cards.
Purchase the Instrument with exposure to the eSports market. Besides trading platforms designed for professionals, most allow buying a financial asset straightforwardly and intuitively.
Review your investments. Periodically check the status of the assets.
Investors looking to invest in esports stocks must do their due diligence and carefully research the companies and trends in the industry before making any investment decisions. This includes looking at companies' financials, competitive landscape, and growth prospects and considering factors such as regulatory risk, market trends, and the broader economic environment.
With the right approach and a solid understanding of the risks involved, investing in esports stocks can offer an exciting opportunity for investors to tap into one of the world's fastest-growing and most dynamic industries.
InTheGame: A diversified Gaming Portfolio by eToro
Trading Platforms offer structured products that invest in a basket of Shares and function as an investment fund. The individual investor trades this financial asset as a unique asset and effectively invested in a basket of Gaming shares. This option can be exciting for those investors who do not want to learn about each company but rather invest in a good portion of this group of firms as a whole. A worthwhile asset is eToro's "InTheGame" share portfolio, which uses Stocks that trade on the United States, Hong Kong and Japan Stock Exchanges, and includes the top Gaming companies.
eToro: Online Broker to invest in eSports
As mentioned, the eToro platform is a quick alternative to start investing in e-Sports stocks. On the one hand, it offers a free DEMO account to practice with 100,000 virtual dollars. On the other hand, it is not the only option, but it is a platform that provides an appealing graphic quality and is very easy to use.
Within the Entertainment Industry, the e-Sports/Gaming segment profits so that some Blockbuster Game Developments have a larger budget than most Hollywood Tank Films. eSports stocks can offer attractive investment opportunities for Filipino investors looking to tap into the growing global trend of competitive video gaming. Some leading eSports stocks include game development, tournament organizing, streaming companies, and hardware companies that produce gaming equipment.
This article will explain how to invest in this global market.