eSports as an Interesting Investment Within a Portfolio

One of the guiding principles when making an investment decision is to balance the risks against the potential benefits. So, it’s important to evaluate where you intend to invest. It’s not uncommon for evaluations to exclude newer industries with promise in favor of an industry with stability, such as energy, finance, or manufacturing. That said, when an industry shows that it is viable as an investment, you should consider jumping on the chance before more investors take the lion’s share of the industry profit. eSports may be such an industry.

Unprecedented Growth

Over the past decade, eSports has been one of the fastest-growing industries. The growth can be attributed to a number of factors, one of the most important being the growth of technology. Networking advancements, especially the introduction and implementation of 5G technology, cloud computing, and online streaming, are some of the infrastructure changes that have played a significant role in the growth of eSports as an industry. However, the most influential technological advancements are no doubt virtual and augmented realities, which are every gamer’s dream.

eSports is a global industry with billions of fans in the Asia-Pacific, European, Australian, and North American regions. For instance, in Canada, the industry is projected to make $23 million by the end of this year. With growth like that, one can expect that in a few years, Canada could compete with China, which rakes in about $27 billion in revenue from online gaming alone, eSports included. The United States has a high percentage of the global market share since most eSports leagues infrastructure is hosted there. Additionally, it has the largest number of eSports leagues in the world. Some of the most popular leagues include PuBG, World of Warcraft, Fortnite, and League of Legends, to name a few. So, how exactly has such a fast growth come about and can we expect the rate of growth to be maintained in the future?

Increased Number of
Participants

Over the years, the number of professional video game players, eSports fans, video game companies, and sponsors has increased. In the past, playing video games was rarely seen as a venue to make money. In fact, most of the people who earned money playing games did so through the testing phase of the games or when they discovered bugs in the game. However, thanks to eSports, people started to view playing video games as a source of revenue, which meant an increasing number of players. Of course, the increase in players directly leads to an increase in fans, games, and sponsors in a virtuous cycle. The marked increase in sponsors particularly, is a good reason why you should include eSports in your investment strategy. Is this something we can expect to see in the future? The answer is probably “yes!” As the games grow more sophisticated and the technology advances, there will be more players, fans and sponsors.

Increased Access

One of the most significant challenges for eSports is that it is heavily reliant on good internet connectivity. Put another way, 3G was good but not ideal and 4G was great but not efficient enough. 5G is where the real fun begins, and that’s where most gamers are investing. Of course, it is expected that there will be better connectivity in the future, and as the connectivity increases, so too will the growth of eSports.

A Viable Alternative to Traditional
Sports

There are millions of people out there who have the love and passion for traditional sports such as basketball and soccer, but cannot play professionally for one reason or the other. That’s where eSports wins. With eSports, you don’t have to meet specific requirements to play. In fact, in most cases, all you need is good internet connectivity, a machine that supports heavy gaming, and a game. Your popularity and subsequent career all depend on how well you play, but you can get started at any time you want to. That means that the market for eSports will always be existent.

Affordability

One of the limiting factors for eSports in its early days was the expense. Computers that supported heavy gaming, internet connectivity, and streaming equipment were all unaffordable to most people. However, as technology advances, it also grows more accessible and affordable. Right now it is possible to buy a complete gaming system for $800 to $2,000 or you can look up how to DIY your own gaming system affordably.

Take-Away

Before making an investment one should review all the information they can uncover, and review it against other options including cash. More importantly, recognize the potential that eSports companies have and, if a fit, make the move while the segment of the industry is still in the growth phase.

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