Esports stocks – Find the best 2020 esports stocks to invest in
Investing in esports stocks is one way to take financial advantage of the global success of competitive gaming. Over the past decade, esports brands like Twitch and ESL and teams like Cloud9 and TSM have achieved multi-million-dollar valuations. In the case of Twitch, a multi-billion-dollar valuation. The potential for growth in the esports industry means that the sector could be the stock to invest in for 2020.
Some esports companies and teams are publicly listed, allowing you to buy their shares so that you can help invest in their future, whilst earning a profit share as they grow. Others are owned by larger publicly listed corporations which operate in others sectors too, and their stocks are available to purchase.
Most gamers are probably more interested in playing games rather than watching esports stock prices. But if you are keen to put your gaming knowledge to good financial use, then figuring out how to buy stocks in esports could be a wise move.
Here’s a quick guide to start you off in recognizing the best esports stocks, and a look at some of the most valuable esports stocks 2020 has to offer.
What are esports stocks?
Esports stocks are shares that a gaming or esports team company puts up for sale. These represent a proportion of the total value of the company. By investing in such stocks, you will get to earn a fraction of that company’s earnings.
Most companies start off as a private enterprise. But when they grow in size, they might decide to become publicly listed on stock exchange by having an Initial Public Offering (IPO). The resulting shares, broadly speaking, are available for anyone to buy.
As a company becomes more profitable, the value of your stocks increases. But conversely, if a gaming company hit a downturn in their fortunes, you would see the value of your investment reduced. Investing in stocks and shares, of any kind, can be rewarding but it can also be very risky.
The value of stocks constantly changes in correspondence to the actual and perceived performance and value of the company. For example, if a gaming company announced plans to release a promising new product, you might see their share price rise. But if an esports brand revealed disappointing sales figures, then their esports stock price would likely fall.
By monitoring the market value of esports shares as well as company performance, news, and how the wider market is performing, you will get a good indication of which esports stocks to buy and which to leave well alone.
Why should you start investing in esports stocks?
Making money from esports is the obvious reason why you might want to invest in the best esports stocks. The stock market, approached correctly, can offer a faster way to get a return on your money than other forms of investment, if you are willing to take the risk.
Compared to opening a standard bank savings account, for instance, investing in stocks could see your money grow at a surprisingly fast rate. This is especially so in relatively new industries experiencing fast growth rates, such as esports, where fledgling brands can seemingly grow overnight into billion-dollar businesses.
The liquidity of stocks shouldn’t be underestimated, it’s important to remember that the price and value of shares can go up as well as down. As a result, buying even the best esports stocks can be a bit of a gamble. So be sure that you are 100% sure of your investment and/or in the worst case can afford to lost it before you open yourself up to the risks of the volatile esports market.
How to buy stocks in esports
Wondering how to invest in esports? Many people tend to buy stocks online from share dealing platforms. By heading to one of these sites you should be able to buy shares from any esports or gaming company listed on a stock exchange. Share dealing platforms cover the larger stock exchanges like the London Stock Exchange.
In order to buy shares, you will need to set up and fund your trading account. From here, it’s just a matter of deciding which esports stocks to buy. Just remember that all share dealing platforms tend to include dealing charges that should always be factored into your investing.
Investing in esports ETFs
A somewhat less-risky alternative to buying esports shares in one company directly is to invest in an exchange-traded fund or ETF (f. An ETF is a type of security available to buy like a share, but which tracks an underlying index or a basket of shares. ETFs can consist of multiple investment types, not only shares.
An ETF’s “basket” can include shares from multiple companies across many industries. Many though, will focus on stocks from a number of companies within one industry. The ETFs manager’s will pick out the top companies to invest in, saving you the hassle. ETF investors can gain access to the growth of an industry, without needing to choose just a single company to invest in.
For example, NERD ETF is an exchange-traded fund that specifically deals in gaming and esports stocks. Its basket, or portfolio, of stocks of publicly traded companies includes game publishers, streaming networks, esports team owners, tournament organisers, and hardware companies.
There are a growing number of esports ETFs targeting millennial investors, some mix-up portfolios with other industries of interest like sportwear and technology, whilst others purely focus on esports. Global X Millennials Thematic ETF (MILN) and Principal Millennials Index ETF (GENY) offer investments in the likes of Apple, Disney, Adidas, Facebook, and Uber. Whereas the VanEck Vectors Video Gaming and esports ETF tracks an index of 25 companies across the gaming and esports industry.
What are the best esports stocks to buy?
Now that we’ve covered the basics of how to buy stocks in esports, it’s time to think about the best esports stocks 2020 has to offer.
The biggest names in Esports
If you want to invest in some of the biggest names in esports, then you could start with the companies that own these brands.
For example, Twitch is owned by Amazon, and YouTube is one of Google’s subsidiaries. Sadly, you can’t just own Twitch stocks! But, by owning shares in these parent companies, you will be investing in some of the biggest brands in the world as well as benefitting from the growth of the esports market.
Such investments can often be seen as a safer bet, these parent companies are well-established, and their share price has a history of stability and growth. They are also exposed to other sectors like e-commerce or cloud services.
Major game developers
Major game developers like Electronic Arts, Activision Blizzard, Take Two and Riot Games may offer a fair degree of stability. Not only are they established in the video games market, but they too are growing in size and value because of the massive success of esports.
Gaming hardware brands
Then, there are gaming hardware brands like Logitech and Nvidia which could be worth a look. Don’t also forget that China is one of the world’s biggest esports markets, so shares in giants like Tencent and NetEase could also prove to be shrewd investments.
If you are looking for esports stocks to buy that could give you a faster route to larger profits, then it could be worth looking at some smaller companies. Imagine if you would have invested in Amazon back before the e-commerce giant really took off.
Esports teams and small companies
As well as smaller esports companies with potential, esports teams are now starting to publicly list meaning you can buy their shares directly. Astralis, for example, was one of the first esports team owners and media organizations to go public, they currently have three esports teams within their esports business.
Don’t forget that esports teams as well as organisations and streaming services might be owned by a larger company and you can back them by buying shares in their parent. Immortal Gaming, for instance, is owned by Anschutz Entertainment Group which owns other famous brands. And, Electronic Arts owns Respawn Entertainment which has just released Star Wars Jedi: Fallen Order. Media behemoth Comcast operates tournaments, is building a stadium and owns its own professional gaming teams.
Then, there are traditional sports teams like professional football clubs Ajax and AS Roma who now own their own esports teams. And, traditional sports backers like Madison Square Garden (MSG) have moved across to owning esports teams. Looking for companies like this could be a balanced way to invest in the phenomenon of esports.
Even the best esports stocks could be a risky investment
If you are looking for esports stocks, 2020 has plenty of options. There is an incredible amount of hype surrounding an industry that has now surpassed $1 billion in annual revenue and is expected to triple in size in the next few years.
Despite sustained industry growth, some believe the esports bubble will burst. So be sure to think carefully about how much risk you are exposing yourself to when you decide to invest in esports stocks.
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