Personal Disclosure: Author is long several gaming related stocks. Do not buy or sell stocks based on what you read.
Sector: video game publishers, streaming network operators, video game tournament and league operators/owners, competitive team owners, and hardware developers
ESPO
Strategy: Cost average every quarter
Reasons to Buy:
1.) The video games market will more than double to become a $300bn-plus industry by 2025
2.) CAGR of 13%
3.) Positive Price Performance
4.) ESPO components may include developing video games and related software, streaming services, and/or those involved in eSports events. To be included in the index, companies must generate at least 50% of their revenues from video gaming or eSports, which allows ESPO to have the highest concentration, among U.S.-listed ETFs, of pure play names participating in this fast-growing space.
5.) Mobile gaming is expected to be a major driver of video game growth in the coming years.
6.) With the increased maturity of cloud gaming technology (supported by 5G), more gamers will shift towards mobile gaming platforms, driving the expansion of this market to over $100bn by 2022, up from $55bn in 2018.
7.) It also holds 25 stocks and charges 55 bps in fees (net). Nvidia Corp (8.40%), Tencent Holdings (7.55%) and Activision Blizzard (6.99%) are the top three stocks of the fund.
8.) United States (35.40%), Japan (22.26%), China (14.79%) and South Korea (11.44%) hold the top four spots in the fund. Communications (77.1%), Information Technology (18.5%) and Consumer Discretionary (4.4%) are the top three stocks of the fund.
9.) eSports will be included in the official programme of the 2022 Asian Games. “In the digital era, eSports will not just be established as a major sport, but also the most beloved sport
Jun Byung Hyun — the chairman of international esports foundation
Jun’s ambition is to make eSports as popular worldwide as they are in South Korea, and he sees little standing in his way. “Older people think games poison the youth and take time from their studies, but this is wrong,” he says. “It is like stopping the flow of a river. The support policy should be to help the water not to flood, and lead them in the right paths. By doing so, we can maximise the effectiveness of the regulations.”
eSports ‘fully embraced’
Korea’s eSports scene is reminiscent of Germany’s soccer culture, with grassroot talents nurtured from a young age, some of them making their way to amateur leagues and, after years of competition and effort, professional teams.
Many leading firms have their own eSports teams, with Faker believed to be paid at least 3 billion won ($2.6 million) a year by his sponsor SK Telecom, the South’s top wireless operator. “This is a country where eSports has been fully embraced as a type of sport among youth, and even college sports championships have eSport events,” said Kim Cheol-Hag, secretary general of the Korea eSports Association.
Last year, eSports was ranked the third most popular sport among South Koreans aged 15–29 after soccer and baseball, according to a survey by Nielsen Korea.
Specific Names
AfreecaTV — 35X since 2009
AfreecaTV is the Twitch of Korea (the home of the Esports fandom). This is why its been running and growing monstrously. Afreecatv is short for Any Free Broadcasting.
Esports League
AfreecaTV StarCraft League (ASL)
Global StarCraft II League (GSL)
Afreeca TV Battle Ground League (APL)
LoL ladies Battle
LoL Challengers Korea
Hearthstone battle royal
Esports broadcast relay station
Overwatch APEX relay
League of Legends Pro League Korean Relay
LoL Champions Korea Relay
Sudden Attack Champions League
African TV Tekken League (ATL)
Chinese League of Legend Pro League (LPL)
https://youtu.be/2FV_M6BHXgo
if anime equates japan, perhaps esports equates korea. cradle city of gamers.
Korean Schools Offer Professional Esports Courses — the PC Bang
Ahyeon polytechnic high school is the equivalent of a sixth-form college and takes students who have struggled in the mainstream. When the principal, Bang Seung-ho, realised many students were bunking off because they had spent all night playing games, he took radical action: he opened a PC bang in the school. So long as students studied regular subjects in the morning, they could play eSports to their hearts’ content in the afternoon and evening.
Bang, a charismatic man who could pass as a film star, believed having a PC bang on tap would prove an incentive for students to attend school. And so it did. The students were transformed. “It was incredible to see how good their attitudes towards the classes became,” he says. “Once you embraced those kids, recognising what they are good at, their mentality changed. They started studying as well.”
Bang became something of a star in the process. He had always considered himself a singer-songwriter, sidetracked from his destiny, so he wrote a song about eSports addiction. Don’t Worry became a hit in South Korea.
Meanwhile, at his school, the youngsters became better and better at games as they trained with a talented peer group. Before long, Bang realised the school was becoming a training ground for future professionals.
He takes me to the PC bang where the students (all boys) are too absorbed to look up. How many want to become professionals? Now they look up. Everybody raises their hand instantly. How many hours a day do they need to dedicate to games to succeed? The very minimum, they agree, is 10 hours a day. So far, seven or eight of Bang’s students have turned professional. “I always say: ‘You have to give me a percentage of your earnings,’ but they never do!” He grins.
Top esports stocks
1.) Activision Blizzard (NASDAQ:ATVI) — 8X from 2013
Has one of the strongest overall franchise catalogs in the video game industry
Impressive history of creating new intellectual properties
At the forefront of creating organized esports leagues that attract professional ownership, broadcast partners, and advertisers
Overwatch, Call of Duty, Starcraft, World of Warcraft, Hearthstone, Diablo
2.) Tencent Holdings (NASDAQOTH:TCEHY)
Strong catalog of video game franchises
Investments in (and partnerships with) many gaming companies
Owns and operates streaming and social media platforms that could help bolster its esports efforts and overall business
League of Legends, Honor of Kings, Player Unknown’s Battlegrounds, Fortnite
Tencent: 9X since 2013 and still going strong
3.) Take-Two Interactive (NASDAQ:TTWO) -11X since 2013
Impressive history of extending the life of its franchises
Development teams with great track records and have created some of the biggest properties in the gaming industry
Grand Theft Auto, NBA 2K, Red Dead Redemption, WWE 2K
4.) Electronic Arts (NASDAQ:EA) -10X since 2013
Leader in the sports-game genre
Strength in licensed content creates the potential to bridge fans of established franchises and sporting leagues into the esports space
FIFA, Madden, Battlefront, Star Wars, Apex Legends
5.) Huya (NYSE:HUYA)
Leading gaming video streaming company in the Chinese market
China will likely be one of the biggest growth markets for esports
Benefits from the success of other company’s video game franchises
Over the last few years, watching people play video games online has become a big business. Between the four major players, Twitch, YouTube, Facebook Gaming, and Mixer, it’s estimated that viewers watched 3.7 billion hours of live footage in the second quarter of 2019 alone. Twitch, which launched in 2011 and was acquired by Amazon for $970 million in 2014, practically invented the format. Today, the service enjoys a near-monopoly on game streaming — Twitch accounts for 72% of all live video hours watched across the entire industry. By comparison, Mixer, which launched in 2016 as Beam and was snatched up and renamed by Microsoft later that year for an undisclosed amount, accounts for just 3%.
That market discrepancy is why Blevins jumping ship to Mixer is so unexpected. Until yesterday, he was Twitch’s most popular streamer with 14 million followers. (The next most popular streamer, Mike “Shroud” Grzesiek, commands a relatively small 6.7 million followers.) Last year, Blevins brought streaming into the public eye by convincing Drake to play a few rounds of Fortnite on stream, breaking Twitch’s concurrent viewer record and arguably cementing Blevins as the face of video game streaming. Whenever he plays, he draws in between 20,000 and 40,000 viewers.
Superstars
- ) EA reportedly paid Blevins $1 million to stream Apex Legends, a Fortnite competitor, on its opening weekend, and Mixer pays to exclusively stream the SMITE pro league.
- ) Blevins confirmed to CNBC that he pulls in $500,000 a month from streaming, a large portion of that coming from subscriptions.
How fast is esports growing?
Research firm Newzoo reports that the worldwide esports audience hit 380 million viewers in 2018, and it projects that the total viewer base will hit 557 million by the end of 2021. A report from Goldman Sachs suggests that esports revenue could climb from $869 million in 2018 to $2.96 billion in 2022.
How does esports make money?
Esports content can make money through broadcast licensing deals, merchandise, live-event ticket sales, sponsorships, advertising, and other channels. Companies can also sell exclusive rights to esports teams, just as Activision Blizzard did with its Overwatch League and Call of Duty League. The company reportedly netted $20 million per team for the first seven teams in the Overwatch League, and ESPN reported that rights for expansion slots in the league went for between $30 million and $60 million per team. ESPN also reported that Activision Blizzard likely received $25 million per team for the first five slots sold in its recently launched Call of Duty esports league. All together, the company has brought in roughly $500 million just from selling team rights across these two esports leagues.
The eSports gamer base is expected to expand from 229m in 2017 to 537m by 2022. On top of the expanding eSports gamer base, eSports tournaments are gaining popularity among non-gamers. LoL flagship tournament LPL recorded 118m viewers in 2017. This compares with 52m viewers for the 2017 NBA finals.
As this space continues to expand and companies begin moving out from their home countries, there will be increased competition in different areas of the world.
Overseas Expansion:
China isn’t the only country currently embracing game live streaming. In the US, Twitch was introduced in the US in 2011. Amazon (AMZN) purchased Twitch in August 2014, when Twitch claims it had 15m DAU. Twitch has continued to expand to other English-speaking countries, such as the UK and Canada.
On the other side of the globe, Huya launched its overseas streaming arm, Nimo TV, in Indonesia in May 2018. A huge win for Huya and Nimo TV was signing an agreement with Tencent (OTCPK:TCEHY) in June 2018 to help promote cooperation in overseas gaming and live streaming. Nimo TV is currently opened to the Philippines, Malaysia, Indonesia, Thailand, and Vietnam.
Non Gaming Companies Betting on Esports
McDonald’s is betting big on esports as a marketing opportunity. PepsiCo has a range of esports sponsorship projects across its drink and snack portfolio. Sneaker and sports apparel giant Nike also has a line of esports sponsorships. Comcast is building a $50 million esports stadium in Philadelphia. And that’s just a small slice of what non-gaming companies are up to in the space.
Nearly a billion people already watch gaming video content, presenting a huge audience that’s yet to be reached, and businesses are still working out the best ways to establish and expand their esports ventures
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https://thetakeout.com/budweiser-official-beer-esports-gaming-trademark-1835910069
That’s where Xbox excelled. There was a ton of impressively diverse stuff from chunky blockbusters like Gears 5, interesting indie titles like timeloop mystery 12 Minutes (perfect for chinstrokers like me to proclaim highlight of the show) and family-friendly games like Minecraft Dungeons and Legend of Write. We got the From Software and Game of Thrones author George RR Martin’s fantasy collaboration Elden Ring and even a new Microsoft Flight Simulator.
CDProjekt — 73X in 7 years— Witcher Series, Cyberpunk 2077
https://www.youtube.com/watch?v=uNZkTk5gLuo
The Story of CDPR
Watch this Keanu Reeves for Cyberpunk 2077
eSports oldest teams Fnatic.
Set up by Sam Mathews when he was merely nineteen years old. Fnatic is now recognised as one of the world’s biggest teams, winning tournaments all across the globe. It has been fifteen years since his team were formed and it is closing in on their anniversary.
SE — 2.5X
AMD 18X since 2015
The 10X names this year and last 2 years are
1.) CDR (CDProjekt) made Witcher and Cyberpunk2077
2.) SE (Garena) — we build stages for gamers to pursue their passion for competitive gaming. League of Legends.
3.) afreecatv — the twitch of Korea
4.) mongodb — open sourced database
5.) twilio — chatbots and develop kits for communications
6.) zscaler — cybersecurity
7.) mercado libre — payments gateway — think wechat and amazon of Brazil
8.) PAGS- same- payment gateway of Brazil
9.) Roku — enables all streaming platforms to watch thru their app
10.) Amd — game processors for better game experience
Many other names in the strong trends
Example of super trends
1.) robotics -> Ocado
2.) payments-> Visa PayPal
3.) online education -> BFAM,EDU
