Why eSports start-ups are great for investors

Though the industry is still expanding, eSports have been around for several years. Some investors have already jumped on board, but it seems that the possibilities for growth are limitless. Judging by how the League of Legends championship sold out the Staples Center in 2013, and how LoL and similar tournaments receive millions of viewers online, it is safe to say that this huge market still has opportunities for investment.

What is most impressive about investment opportunities is that eSports are still in their infancy. While already boasting fan numbers in the hundred millions, eSports viewership is expected and projected to continue to grow, reaching nearly 150 million viewers before the end of the decade. While major companies like Coke, Nissan, and Red Bull have already joined as sponsors, the possibilities for investments are endless. In addition, Amazon purchased Twitch, an online community for gamers. The number of fans, the number of opportunities, and the number of gamers seem to be ever-growing.

And the market may be more diverse than some expect. According to ESPN, 44 percent of eSport athletes are parents, 38 percent are women, and 28 percent are over the age of 35. This does mean that the majority of eSport athletes are males younger than the age of 35; however, the opportunity for diversity, and expansion of said diversity, is still present.

The biggest concern for investors is profit. eSports gaining fans is a good sign, but perhaps more so are the players’ earnings. In ESPN’s report, the winner of the DOTA2 Champions won $5 million in 2014. The only champions earning more were from the Super Bowl, who are players already on million dollar salaries, and the World Series of Poker. In addition, of the top eight sport championship earners, four of them were from eSports.

If nothing else, eSports provide an enormously public platform. Because games are easily viewable online, the numbers grow much faster than other sports. In addition, one article from CNBC pointed out that the only thing eSports needs to do to grow is continue to play new games. While professional sports leagues institute rule changes or bring up new expansion teams to make the game seem newer, eSports simply need to play released games from an already profitable industry. The article also pointed out that the Internet has brought together an industry of gamers, who have been connected since gaming became a trend. Imagine the possibilities for people who live their whole lives with both video games and the internet.

What’s perhaps the best thing about eSports is that it truly requires a skillset. While people may find themselves beating their friends at video games, when one looks at the eSports world they can see how talented each professional gamer is. If nothing else, eSports is certainly an entertaining outlet for its audience.

References

  1. https://www.linkedin.com/pulse/five-esports-startups-you-should-know-alex-fletcher
  2. http://espn.go.com/espn/story/_/id/13059210/esports-massive-industry-growing
  3. http://www.cnbc.com/2015/06/04/esports-startups-are-good-game-for-investors-commentary.html

 

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