Investing In eSports: The Five Winning Stocks

Esports has come from nowhere to become one of the most exciting entertainment trends in the world. What began as a fairly niche activity in South Korea has grown to become a world beater, and the esports industry is expected to hit $180 billion in revenues by 2021.

ESports

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But what is esports and how can you take advantage of its remarkable growth? Simply put, esports is competitive video gaming where individuals compete on video games like League of Legends, Counter Strike Global Offensive and Overwatch. There’s a more detailed guide to esports here, but basically esports is like any traditional sport, except that it’s played on video games.

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Given esports’ impressive revenues, there will be many people questioning which esports stocks have the most potentially lucrative returns. Whilst the esports industry might not be included in many of the value stocks for 2019, some of these stocks could be well worth keeping an eye on.

It’s the games publishers and developers who could provide the greatest amount of stability in this rapidly changing realm. EA Sports is one of the most widely respected games publishers in the esports domain with titles like the Madden franchise and FIFA being amongst its biggest hits. And with the news that EA Sports are teaming up with the Premier League to launch the ePremier League, it shows that there is plenty of value here.

Activision Blizzard have also provided some of the biggest titles in the competitive gaming realm. Alongside classics like Call of Duty and Quake, Blizzard have also successfully launched the Overwatch League and Overwatch World Cup tournaments which have added plenty of professionalism to the fledgling industry.

All shrewd investors will know how China holds the key for understanding the future of many industries. As a result, it could be wise to invest in Tencent as this multibillion dollar Chinese investment company bought Riot Games. Why is this important? Riot Games created League of Legends which is probably the biggest esports game around, and with over 60 million unique viewers for the 2017 League of Legends World Championship finals, it shows just how popular esports has become.

Esports wouldn’t have grown to become a world-beater were it not for the incredible hardware that the gamers compete on. As a result, many investors have been charting the rapid progress of Nvidia. This semiconductor company has a separate NVDA gaming division that was responsible for developing the world’s speediest graphics processing unit. As a result, this brand have proven to offer plenty of stability when working out how to overcome any unexpected stock market turbulence.

Similarly, Logitech have won many fans as a result of their gaming hardware, and it could be wise to invest early in this Swiss manufacturer. Logitech’s revenues have steadily been growing the past few years, and with growth figures of 27% in 2017, it seems as though gamers’ hunger for quality keyboards, mice and other hardware is showing no signs of slowing down.




About the Author

Ankur Shah
Ankur Shah is the founder of the Value Investing India Report, a leading independent, value oriented journal of the Indian financial markets. Ankur has more than eight years of equity research experience covering emerging markets, with a focus on India and South East Asia. He has worked as both a buy-side investment analyst for a global long/short equity hedge fund and a sell-side analyst for an emerging markets investment bank. Ankur is a graduate of Harvard Business School. You can learn more about his latest views on global markets at the Value Investing India Report. -- He can be emailed at AnkurShah47@gmail.com