If you’re looking for the next disruptive technology to invest in, then eSports could make for a solid investment opportunity.
Investing in this industry is growing exponentially with the growing audience for watching eSports and the rising number of successful games in the genre.
In March 2021 alone, about $4.06 billion of disclosed investment relating to eSports was reported, according to Esports Insider.
The vast majority of that money — about $4 billion — was used by Nuverse to acquire Moonton, the game developer behind Mobile Legends: Bang Bang — one of the most popular new eSports titles in the world.
Other significant investments include: Bitkraft Ventures, a worldwide esports venture capital firm, raised $165 million in August 2020 for investing in eSports, gaming, and interactive entertainment; the Mobile Premier League (MPL), Asia’s largest mobile gaming and esports platform, raised $90 million in September 2020; and VSPN, which uses content creation and organizes eSports tournaments, and has partnered with more than 70 percent of Chinese eSports tournaments, drew $100 million in funding in October 2020.
It’s clear that eSports will continue to grow as an industry. But should you invest in it? That’s always an impossible question to answer definitively, but many industry experts have grown more bullish on investing in this sector of the economy.
Over at The Motley Fool, one of the top investing sites, the prognosis is measured. The site’s investing experts noted that while the video game industry is “typically riskier than the market at large,” many companies have the potential for substantial long-term growth.
“Still, the gaming industry has a promising outlook, and a multitude of favorable trends benefit the industry’s leading participants,” The Motley Fool wrote. “Most top companies in the space have recorded heightened player engagement amid social distancing initiatives spurred by the coronavirus pandemic, and global demand for gaming and esports content will likely continue to rise long after the pandemic subsides.”
A Canadian investor in disruptive industries, Sheldon Inwentash, was recently interviewed on the subject of why his company, ThreeD Capital, has remained bullish on investing in the eSports industry.
“This isn’t something that’s a trade or is a short-term phenomenon,” Inwentash said to Agoracom. “We are in a secular, major transformation in technology. There’s been a shakeout and it shook a lot of people’s confidence.”
Inwentash said his company has a “rock solid” view of the future of disruptive technology, especially eSports.
“What’s interesting is that things are snowballing because of the visibility of some of our companies,” Inwentash said. “Our deal flow in the eSports arena has just catapulted. We’re seeing a lot of great projects.”
There are even signs that the industry is overtaking conventional sports.
The lockdowns caused by the pandemic dealt a devastating blow to traditional sports like football and basketball, while eSports continued to enjoy skyrocketing growth.
That was evidenced by the decision from Spain’s top football division to hire an eSports star with little experience in “real” sports as a commentator for its first actual football match to be shown live on Twitch – which usually only broadcasts eSports competitions.
That decision “was the latest sign that sports leagues are increasingly worried about losing the next generation of fans; they know that many kids today are more interested in professional gaming than football,” the UK’s Investor Chronicle wrote. “Although watching other people play computer games may not seem entertaining to most, there is a rapidly expanding market for esports.”
The eSports sector’s growth gained even more momentum during quarantine. Although even eSports tournaments have in the past taken place in stadiums filled with thousands of fans, there has been a seamless transition to streaming services like Twitch and YouTube.
The market share will likely shift back to real sports once the pandemic ends, Investor Chronicle reported.
“But as the younger generation comes of age, the sports establishment is likely to continue investing and fuelling growth in esports for years to come,” the article said.
