Esports have been growing in popularity, but they’re still a small part of the gaming industry. Learn more about how esports are becoming more mainstream.
There are a lot of mixed opinions on esports, competitive video game tournaments held in venues all over the world.
For the skeptics, you might be surprised to learn that there are 2.2 billion active gamers in the world and 1 billion of them spend money on consoles, games, digital subscriptions, and in-game and in-app purchases, according to market intelligence firm NewZoo’s 2017 Global Games Market Report. That means roughly 30% of the world’s population plays video games.
This week, the 2018 Game Developer’s Conference (GDC) kicked off, which brings together more than 26,000 industry professionals to “shape the future of the industry,” as GDC puts it.
All of this serves as a good reminder that esports and video games are big business, and the industry could warrant closer examination if you’re researching potential investment opportunities.
Esports are still a smaller sliver of the overall global games market, which Newzoo estimates will grow to $115.8 billion in 2018; whereas it estimates the global esports economy will reach $905.6 million in 2018, a 38% year-over-year increase. Esports revenue is comprised of sponsorships, advertising, media rights, game publisher fees, merchandise and tickets—similar to traditional sports.
Beyond the numbers, there are plenty of other signs that esports are becoming more mainstream. They will be included at the upcoming 2022 Asian Games and the International Olympic Committee (IOC) is evaluating them for potential addition to the Olympics. After a meeting in October, the IOC said “competitive esports could be considered as a sporting activity, and the players involved prepare and train with an intensity which may be comparable to athletes in traditional sports.”
Not only are esports being recognized by major sporting events, they’re also being recognized by overseas governments. Japan will grant athletic visas to esports competitors from foreign countries. And Hong Kong recently set aside HK$50 million ($6.37 million) to “create spaces for video game competitions,” according to the South China Morning Post. A small sum by government standards, but it’s significant that they’re investing in developing the city as a destination for the growing number of international tournaments.
There are many different events and conferences to consider keeping an eye on if you want to learn more about trends in esports and video games. This list includes some of the major ones in order of when they occur throughout the year:
If you’re optimistic about potential investment opportunities for esports and gaming in general, you may want to spend some time doing your research.
There are the obvious companies that are directly involved and generate almost all of their revenue from gaming:
You may also want to look into major companies that are involved in gaming to some degree, or that offer gaming-related products:
This is by no means an exhaustive list, but intended to highlight some of the many companies involved in the industry that could serve as starting points for your research. As you identify companies that meet your investment criteria, be sure to consider your risk tolerance. Along with the broader market, a lot of these companies are trading close to all-time highs, so it might be prudent to tread cautiously.
Learn more about the tools TD Ameritrade offers that can help you research potential investments.
for thinkMoney ®
Financial Communications Society 2016
for Ticker Tape
Content Marketing Awards 2016
TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other's policies or services.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.