Not just fun and games: How to invest in the future of e-sports
E-sports, or competitive video gaming, is on track to become a billion-dollar industry. What are the potential opportunities for investors? Money Mind finds out.
SINGAPORE: E-sports, or competitive video gaming, is on track to become a billion-dollar industry, gaining in popularity and visibility during the COVID-19 pandemic.
Asia has the largest audience of e-sports players and fans in the world, with an estimated 510 million fans and 595 million gamers in 2019, according to Niko Partners, a provider of market intelligence on the games industry.
The region generated nearly half of all global e-sports revenue in 2019 at US$519 million .
In the ASEAN region, some market watchers are forecasting double digit revenue growth this year.
With more than a billion gamers worldwide, it is so big that its fans call it the biggest sport in the world.
READ: Game (still) on: Why e-sports is surviving in the age of quarantine
Growth figures like these are increasingly attracting the attention of corporate partners.
Mr Lau Kin Wai, co-founder of Esports Players League, said that interest from brands and companies has grown, particularly after traditional advertising on sports events was affected during the COVID-19 pandemic.
Esports Players League is a global grassroots e-sports tournament and platform that focuses on online competition and digital interactivity.
“Brands and companies are always looking for innovative ways to engage their consumers or even potential consumers. I see a lot of interest from brands who like young consumers," said Mr Lau.
"We are growing really rapidly as well, in terms of being able to attract sponsors and advertisers on our platforms and on our virtual events. Whether these are traditional technology or young consumer-related brands or even non-conventional brands who now want to look into tapping into this segment of consumers. We have seen a lot of interest. Coupled with the fact that some of these brands who do traditional advertising on sports events, they could no longer do that during the pandemic,” he added.
E-sports fans tend to be young digital natives.
Seven out of 10 e-sports fans are male, ranging between 18 and 34 years of age, with Nielsen reporting that the average age of an e-sports fan is 26 years old.
But women are levelling the playing field, especially in Asia.
Kimberlyn See, the co-founder of all-female eSports team Asterix - has been gaming for more than15 years.
“In the recent one or two years, we’ve definitely seen a lot more media coverage on e-sports in Singapore," said Ms See, who is also operations lead at Female Sports League.
"When I first started gaming in general, it was not common as opposed to right now where if you go to a shopping mall, you can see primary school children holding their mobile phones and just gaming on their mobile phones already. This would have been very rare in the past,” she said.
READ: From livestreaming to e-sports: Witness the rise of female gamers in Singapore
The growing popularity of gaming platforms, coupled with rapid improvement in technology, means that there could be opportunities for investors.
"Because of how e-sports has grown, there are a lot more game publishers who are investing their money or even there are a lot of investors from other markets and industries who are trying to invest money into e-sports," said Ms See.
Mr Kelvin Wong, market analyst at CMC Markets, noted that e-sports comprises a large ecosystem, starting from game publishers. On top of this, there are online streaming producers, hardware suppliers, and suppliers of accessories like headsets.
For investors who want a more diversified approach, there are several Exchange Traded funds available, including include Global X Video Games & Esports and VanEck Vectors Video Gaming & eSports, he said.