Esports to Invest In – Long-term prospects and new avenues of approach
As with any fast-growing industry, there is lots of interest in esports investment right now. The biggest focus is on companies and titles that are successful already. Let us instead look at a little more long-term prospects and some alternatives to top titles. What are the next big innovations and what will be the next multi-million player title?
Many are looking at how to invest in esport stocks for a quick return in the near future. What could the long-term hold for esports worth investing in? Where should esports companies be focusing their future interests? And, where could players turn a quick buck or find their next esports focus?
Blockchain, NFTs and Cryptocurrency
Game developers are building new titles on blockchain networks hoping to take advantage of these networks ability to manage transactions and to host non-fungible tokens (NFTs) and provide facility for cryptocurrency use.
Blockchain-based games and games that integrate the use of NFTs offer new models of gaming monetization, models that offer greater reward for players as well as publishers. We’ve covered NFTs and their potential in a little more depth. But, in summary NFTs can turn in-game assets into digital assets that can have value in the real world. Those favorite skins you have could eventually be sold and traded outside of your game – that is quite an investment if you tend to collect skins and indeed, other in-game assets. Buying the cryptocurrency or native token of your favourite up-and-coming blockchain based game can be a great way to invest in its potential. Cryptocurrencies can increase in value if the project they are connected to takes off.
For investors, either investing in a project that tokenizes in-game assets or simply collecting highly sought out NFTs can be a long-term prospect.
Though not strictly investing, esports betting can give participants a return on their cash, if they are careful and successful. Esports betting is on the rise alongside competitive esports. There are more online esports betting sites appearing all the time and the range of games and tournaments they offer wagering on is growing too. A ProdegeMR report recently suggested that 22% of gamblers who have never wagered on esports are considering doing so. In addition, esports betting turnover was expected to reach over $14 billion in 2020, compared to $7 billion in 2019. The growth of esports betting is expected to contribute to the overall growth of esports and its likely market valuation of $3 billion by 2025.
Investors can seek to either directly invest with betting operators during funding rounds, seek to partner with esports betting sites heavily invested into esports or simply start learning the intricacies of esports betting as a growing market.
Mobile Esports and Mobile Gaming
Non-gamers might expect that the mobile gaming industry is far overshadowed by PC and console gaming. However, the truth is that mobile gaming is becoming more and more popular as smart phone capabilities increase and 5G and Wi-Fi availability broadens.
Mobile gaming is actually a very viable area of esports investing to consider. In fast-growing smartphone markets such as India and Asia mobile gaming is gaining rapidly in popularity. It was estimated that mobile gaming may have contributed as much as 60% of the video games market’s revenue in 2019, generating around $17 billion in industry profits. PUBG Mobile and Clash of Clans and the new Arena of Valor titles are driving revenue growth for publisher Tencent, for example. By May 2020, Garena’s Free Fire mobile esports game was hitting around 80 million players per day. In Q1 of 2021, Call of Duty Mobile surpassed 500 million downloads and was a large chunk of Activision’s $891 million revenue report for the quarter.
Potential investors can pair all three previously mentioned investment categories when looking at Mobile Gaming and Esports. From investing into direct game development to companies developing mobile esports, to simply finding ways to utilize betting or NFTs within the mobile gaming space. A bulk of the market is focused on micro-transactions and skin purchases, providing plenty of angles of attack.
Another new trend to watch is the emergence of virtual worlds which use cryptocurrencies and tokenization and have, in essence, their own complete economies with transferrable value in the real world. Lets take projects like The Sandbox as an example. a complete decentralized virtual world. It has seen sales of its “land” in the form of LAND tokens boom. The sandbox is a whole ecosystem where land owners can build their own games and experiences within the game world for players to visit, engage with, and even spend money.
Once again, VR worlds are a market where plenty of industries intersect to create an immersive experience for the users. Investments can vary from siding with the developers to simple real estate resale and everything in between. Esports are slowly making their way into virtual worlds and having your in-ways set up as the push comes can be a gold mine.
Up-and-coming esports games and potential esports investments
2020 and 2021 have seen new titles like Trackmania, Wild Rift and Valorant really take off. Augmented reality title Pokemon Go performed well in 2020 too, showing promise for the virtual and augmented reality gaming market moving forward. Roblox also performed well in 2020 and filed for an IPO, intending to publicly list its shares on the stock markets for investors to buy.
Diabotical, a first-person shooter, is expected to do well in 2021. It is notable as its development was directly funded by fans via the Kickstarter platform. Halo Infinite is also highly anticipated for this year in the realm of more conventional esports.
Scouting the next big esports game and esports to invest in is hard to gauge. As an alternative you can look into investing directly into esports organizations that compete across a variety of titles. Companies like Fnatic and Astralis Group are regularly raising capital and might go fully public becoming your “buy and hold” portfolio booster.
In conclusion, which esports and potential esports investments to watch in 2021 and beyond?
Esports stocks are of course still of interest to investors, especially as more gaming and esports companies hit the stock markets. Blockchain and tokenization-oriented gaming warrants attention in coming years as tokenization gives real world value and cryptocurrencies have their own value and tradeable markets. This too makes virtual worlds watchable. Esports betting is growing quickly and has the potential to reward players, and mobile gaming can only grow at this juncture.