Sports make for an incredibly lucrative industry; that much is well-established, but fewer people are aware of how electronic sports (competitive gaming) are quickly overtaking many traditional sports in popularity and revenue. It’s not just the billions of dollars that esports is set to make in the coming years, however. There’s currently talk of introducing esports as an official game in the 2024 Olympics. Clearly, this is a competitive spectators sport to be taken seriously – for its huge cultural influence as well as the masses of profit esports can make.
Each day seems to bring with it news of a new financial commitment to the seemingly unstoppable growth of esports. Naturally, esports is still a new and therefore unpredictable industry – meaning it is not devoid of the risks posed by any emerging investment field. That being said – the exciting and wildly promising pace at which esports is expanding can undoubtedly lead to great profit if investors are wise and quick to act in this early stage. Here are some of the ways one can invest in esports.
Esport Pro Teams
Perhaps one of the most direct ways to invest in esports is through sponsoring an actual pro player or team. The most successful teams are rarely short of sponsors (nor cash), with giants like Pepsi backing them for airtime during the hugely popular and live-streamed tournaments. However before someone becomes an esport pro, he or she is merely a promising player – and promising players struggle to get funding.
To become an esport pro, one must train like real athlete – dedicating themselves completely to the game which could mean playing as many as twelve hours a day. They must follow a strict exercise and diet regimen in order to stay healthy and concentrated, while a talented coach is needed to keep them motivated and committed to improving themselves. To train like a pro, in other words, requires funding and backing. But brand sponsorships aren’t the only way to benefit from esport players in need of sponsor money. Much similar to the so-called ‘staking’ of poker players, investors can put money on esport players or teams that are just starting out, in hope that they’ll get a decent ROI when the players or teams eventually go far in tournaments.
Events & Hosting
The last Dota2 tournament, known simply as ‘The International’ boasted a one million dollar prize pool and was live-streamed to millions of observers across the world. The hugely popular band ‘Imagine Dragons’ even opened for the event. With tournament tickets sold in a matter of moments, and with each event needing to be more spectacular than the last, events organizers and hosting venues are becoming an increasingly vital part of the esports machine. This means that effective and professional events organizers specialized in competitive gaming are in demand.
While games like League of Legends, Dota2 and CS:GO may seem to be dominating the industry entirely, thinking outside the box to future esport trends could help you identify the next big investments in the businesses behind esport events organisations. FIFA, for example, is fast becoming a popular game in esports, with a rising number of participants and viewers. Backing the people behind the next big tournament might be one of the best examples of how to ‘get in early’. Consider Take-Two Interactive, for example, who have recently partnered with the National Basketball Association in launching an eLeague to be introduced in 2018. Clearly, there are a lot of investment opportunities to be found in the actual hosting and events planning of an esport tournament.
Betting Companies and Affiliates
Where there is a popular spectators sport – there is a great deal of betting. The major online betting brokers and gambling affiliates are now catching up to the fact that people are prepared to bet (and bet big) on major esport tournaments. Currently, the demand seems to exceed the availability of licensed gambling companies offering esport betting – making for a gap in the market that has great potential. It’s also worth noting that those few companies which are zoning in on esport betting tend to already be established in the online poker or casino industry, marking a merge between igaming and esports.
ElkY Grospellier, a successful Twitch streamer and frequenter of the biggest online poker sites, also points to how the already lucrative igaming industry can help promote esport betting; “…esports is kind of like poker, there are so many possibilities—it’s never the same cards, never the same game” he tells Vice. In other words – look at the biggest businesses in igaming for an idea of where to invest in the newly emerged esport betting scene.
The selling power of esports is huge. It’s the hottest new sport – and young gamers are looking to support their favourite pro team just like other support football teams. There’s already an anime TV series about esports – just one example of how it is being translated into mainstream pop culture.
Now is a good time to invest in brands seeking to acquire, or have already aqcuired, licensing rights for the production of esport team merchandise ranging from team t-shirts to water bottles to virtually anything you can think of. Products don’t necessarily have to have a team logo stuck on them to sell, either. Gamers increasingly want to play with the same quality gear and equipment as they see the pros utilize in tournaments, creating a demand for esport-standard gaming gear from the average player – which brings us to our next point…
The gear and software at esport tournaments needs to be at the very cutting-edge of technology. The way in which pros game must be one step ahead at all time – which in the near future may mean incorporating virtual reality. As of now, it means that glitch-free semiconductor companies producing mega-fast GPUs, or businesses focused on ergonomically tailored console gear, could make for wise investments. While this may feel like a more indirect way to invest in esports, gaming technology is hugely affected by the esports industry – and esports are dependent upon modern gaming technology.
The esports industry currently offers many different and potentially lucrative investment opportunities. This is a fact not likely to change anytime in the near future. It is also true however, that the early bird gets the worm – so get in on the game as soon as possible, and you could see the ROI rolling in shockingly soon.