In today’s world of social distancing, eSports are a great way for people around the world to connect with each other. eSports have been slowly growing more popular over the last decade. This industry is now worth over a billion dollars and provides employment for thousands of professional gamers. Now could be the time to jump into some of the best esports stocks.
The eSports market is expected to continue growing steadily. This makes eSports stocks a potentially good investment for your portfolio. We’ve rounded up some of the best eSports stocks currently on the market. We’ll also take a look at what eSports are and why they’re a good investment.
What Are eSports?
eSports is the industry of competitive video gaming. Professional players and teams compete to win titles as well as cash prizes.
eSports events can happen both in-person and virtually. They are streamed all over the world so millions of fans can tune in. The professional players often have the opportunity to win large cash prizes.
These competitions generate money in a few different ways. Many gaming channels will charge viewers fees to access the streams. Sponsorships and ad placement can also generate large amounts of revenue.
eSports leagues play the same video games that are popular with consumers at home. These include League of Legends, Call of Duty, Fortnite, and much more. Traditional sports games like Madden NFL and NBA 2K are also played as eSports.
Why Invest In eSports?
The world of eSports has a bright future. These video game competitions are easy to access and watch online. They’re also very popular with young people.
eSports viewership has grown significantly over the past few years. If viewership continues to follow year-on-year growth, we can expect to see over 495 million viewers of eSports in 2020.
The challenges brought on by the global COVID-19 crisis may make the gaming industry even more profitable. Many people are turning to the video game market for entertainment as traditional sports have been canceled or modified. Video games also provide a way for people to connect around the world, even when they can’t interact in person.
Many traditional sports have cultural barriers to accessibility. They can be expensive for kids to learn how to play. However, anyone with an internet connection and the right hardware can play eSports. This accessibility is not only going to draw in a huge number of players globally, but will also create a passionate viewer base.
Additionally, the gaming and eSports market will continue to innovate and grow. We’ve already seen significant innovation in the mobile eSports sector just over the past few years.
Best Video Game eSports Stocks
These eSports companies produce some of the most popular video games in the world. These stocks consistently release new games and host eSport events.
Electronic Arts (NASDAQ:EA)
Electronic Arts is one of the leaders in the eSports space. One of the things that makes them stand out is their presence in the world of traditional sports. Two of their leading games are Madden NFL and FIFA, which allow users to play American football and soccer virtually.
Electronic Arts has a long history of producing successful game franchises such as The Sims and more recently, Apex Legends. Their games appeal to both casual players and professionals. Recently, EA made its first foray into TV with Sims Spark’d, which was designed to appeal to a broader audience outside of the gaming world.
One of the things that makes Electronic Arts unique is that they don’t exclude amateur players from their eSports leagues. Many of their tournaments are open to anyone who wants to play.
This provides a more diverse range of income opportunities for them. This inclusive approach is also a great way to generate a huge number of loyal fans.
Moving forward, Electronic Arts is in the process of developing their own streaming platform for competitive video games. While there are already ways for gamers to connect while playing EA’s titles, this platform will make things even more inclusive.
This new streaming platform will use cloud technology to make gaming more efficient and accessible. Gamers will be able to participate from many different types of devices.
EA’s stock has steadily gone up in price over the past several years. There’s still room for growth, and the company has a strong balance sheet with plenty of cash and minimal debt. They’re also appropriately valued right now.
Electronic Arts has differentiated themselves from other eSports providers by focusing on accessibility and appealing to a wide range of demographics. This approach will be key as video game tournaments become even more popular.
Activision Blizzard (NASDAQ:ATVI)
Activision Blizzard is another one of the best eSports stocks out there right now. Out of all the video game companies in the industry right now, they are arguably making the largest push towards competitive eSports.
One of Activision Blizzard’s most popular games is Overwatch. With Overwatch, this company has been able to build a franchise with 20 different teams all over the world.
The Overwatch league is one of the most similar to those of traditional sports. This means it has incredible marketing potential. Activision recently reached a deal with Disney to broadcast Overwatch matches on ESPN, which will reach a much larger audience.
Activision Blizzard is also known for Call of Duty, a genre-defining first person shooter game. This year, Activision opted to set up a global Call of Duty league that is very similar to its Overwatch league.
Other games under Activision’s label include World of Warcraft, Starcraft, Diablo, and Tony Hawk. Activision Blizzard also has a presence in the mobile gaming world, as they own the Candy Crush franchise.
Activision Blizzard has some of the most streamed video game competitions in the world. They are very successful on Twitch, which is a video game streaming platform owned by Amazon.
They also have their own video game streaming platform called Major League Gaming. Activision has invested heavily in eSports and has a very strong established fan base.
Activision stands out as one of the largest video game companies in the world. They also have a very engaged fanbase for their games that keep coming back for new releases.
Despite the challenges of 2020, Activision managed to deliver excellent earnings reports through the second half of the year and moving into 2021. Activision is also one of the only video game stocks to pay a dividend.
As a leader in the gaming and eSports space, Activision is likely to keep delivering. This makes it one of the best stocks in the gaming industry to add to your portfolio.
Tencent Holdings (OTC:TCEHY)
eSports are particularly popular in China right now. It’s no surprise that many of the best eSports stocks are coming out of this country. Tencent Holdings is a Chinese media conglomerate with plenty of potential in this area.
Most notably, Tencent Holdings owns Riot Games. Riot Games is an American media company that is best known for the League of Legends series.
League of Legends is arguably the most popular eSport in the world. Riot Games hosts both professional and collegiate tournaments around the world. In 2019, the World Championships had over 100 million viewers.
Tencent Holdings also has a strong portfolio of other video gaming and tech investments. They’ve invested in popular North American publishers like Ubisoft and Epic Games, which produces Fortnite.
Notably, Tencent also owns WeChat. This is the largest messenging app in China and is a very important part of their global infrastructure. They also have their own cloud infrastructure in China.
Tencent has a diverse and successful portfolio that goes beyond eSports. It’s one of our favorite stocks in the sector for this reason.
Allied Esports Entertainment (NASDAQ: AESE)
Allied Esports Entertainment is based in Irvine, California. They are an up-and-coming esports company that currently trades as a penny stock.
The company runs esports arenas and produces esports content. They currently run the HyperX Esports Arena in Las Vegas as well as 11 other properties.
Many esports events have been happening online this year as a result of the pandemic. However, it’s likely that they will eventually start happening in person again, and they’ll require venues like the ones Allied Esports runs.
As with any penny stock, investors should be careful when buying Allied Esports. While there’s plenty of potential with this company, it doesn’t have a proven track record yet. Penny stocks can also be quite volatile. However, if you’re willing to take a risk, this esports stock could be an interesting pick.
Super League Gaming (NASDAQ: SLGG)
Super League Gaming is another esports company based in southern California. They initially caught the attention of investors through the Reddit WallStreetBest forum, but they have huge potential to make a name for themselves in the esports industry.
Right now, Super League runs a popular online gaming community. They create gaming content, and users can connect with each other to discover new games.
They also frequently host tournaments for popular games, sometimes with major sponsors. These sponsorships bode well for the company in the future, as they can create a very steady source of revenue.
Right now, this stock is trading for around $6 per share. However, if the company can maintain the hype around their events moving forward, they have plenty of potential for the future.
Best Technology and Media eSports Stocks
These stocks do not focus on game production directly. Instead, they produce software and hardware that are essential for eSports players.
Huya is another one of the many Chinese eSports stocks with potential. This company makes a software platform that gamers can use to broadcast as they are playing.
This company is already a huge presence in China, where the eSport market is based. As gaming becomes even more popular, they could have the potential to expand globally. They have a subsidiary called Nimo TV, which offers streaming in other countries.
Huya has a feature that allows viewers to tip streamers. They make money by taking a portion of those tips. They also make money using advertising.
Huya also owns two professional eSports teams, one for League of Legends and one for Overwatch. Their League team, Royal Never Give Up, has been particularly successful.
Huya’s streaming platform has the potential for global appeal as eSports expand.
The top gamers in the industry need reliable hardware to succeed. Logitech is a company that creates essential hardware for gaming.
Some of the hardware that Logitech produces include monitors, keyboards, mice, headsets, and more. They are also expanding into virtual reality.
Logitech’s products can appeal to a broad range of people beyond gamers. In addition to their gaming hardware, they also make webcams. These webcams have helped people around the world work from home and connect with each other during the COVID-19 pandemic.
The company’s sales have done very well this year. There’s plenty of potential for their profile to keep growing. As eSports become more mainstream, demand for high-quality hardware could increase.
eSports Stocks: Final Thoughts
Right now, more people are staying home and enjoying video gaming than ever before. This means there’s plenty of potential for eSports stocks to continue to grow.
eSports have a global appeal and are a fun way for video game fans to further engage with the titles they love. They are also an excellent way for people around the world to connect.
In general, eSports stocks have done well this year. Even as other industries struggled, the video game market continued to grow. This indicates a positive outlook for the future of gaming.