Competitive video games are taking the globe by storm — and there are 5 companies that could reap the benefits (ATVI, EA, MSFT, NVDA, SNE)

business news

  • Esports represents a massive growth opportunity for companies, a Bernstein analyst said.
  • The sports category has a large fan base, which can number half a billion in a few years.
  • Companies stand to make lots of money for appealing to this large and growing market.

There is a massive growth opportunity in the realm of competitive video gaming, known as esports, and it could make some well-heeled tech companies even richer.

Esports has a large and engaged following that is under-monetized, Todd Juenger, a Bernstein analyst, said. He believes this could present an attractive revenue opportunity for companies and investors alike.

In the US alone, esports viewership already outnumbers NHL viewers, and its projected to surpass the number of MLB viewers by 2020, Juenger says. Globally, esports draws an active viewership of 143 million, and that number shoots up to 307 million if you count occasional viewers. Juenger expects that number to explode to 250 million active viewers and over half a billion occasional viewers by 2021.

With the rising popularity of esports, some companies are jumping on the bandwagon to appeal to this large and growing segment, Juenger says.

Here are five companies that will likely reap massive profits from the overlooked sport:


Ticker: ATVI

Esports’ Impact: Activision Blizzard is one of the biggest beneficiaries of the esports boom thanks to the success of its recently-launched Overwatch League, a professional esports league for the widely popular video game “Overwatch.” The league’s ascendance has helped catapult the esports category into the mainstream.

There is significant potential to generate revenues and profits from the league via sponsorships, advertising, and media rights, Juenger says. He believes the league’s continued success would deliver “many multiples” of cash flow in the long run.

“Overwatch League represents a rare opportunity for public market investors to become equity owners in a professional sports league, at an early stage,” Juenger wrote.

You can view Activision’s stock price in real time here.

Electronic Arts

Ticker: EA

Esports’ Impact: Electronic Arts will likely see the reward from its esports play “over time,” as Juenger describes the gaming company’s esports approach as more “grassroots.” There will be an “incremental monetization opportunity over time,” he said, as EA leverages its partnerships with sports leagues, such as FIFA, and TV networks, like Disney, to mutually promote and engage audiences at sports events, as well as their respective video games.

You can view EA’s stock price in real time here.


Ticker: NVDA

Esports’ Impact: While the cryptocurrency rush has propped up the chipmaker’s shares, gaming still makes up over 50% of Nvidia‘s business. That business has grown 33% over the past few years, Juenger notes. There are some long-term, secular trends that are driving the gaming market and demand for the highly sought-after chips will not dissipate soon, he says.

“We see the engagement levels around this trend as having the potential to both bring new users into the installed base, particularly new users that are young and of relatively high income,” Juenger wrote.

You can view Nvidia’s stock price in real time here.


Ticker: MSFT

Esports’ Impact: Microsoft has seen gaming and “mixed reality” — which blends virtual reality with real life — as one of its growth opportunities. The tech company is making a play on the esports market through a combination of acquisitions, such as Beam and PlayFab, as well as internal “organic” development. 

The company has built esports studios within its physical stores and has run its own esports competitions. With the use of its Azure cloud platform, gaming software and hardware, and mixed reality push, it can be a “major player in the market,” Juenger says.

The company’s planned Mixed Reality Headsets should also serve as a catalyst for Microsoft’s Windows platform and Xbox businesses while also driving revenue and profits.

You can view Microsoft’s stock price in real time here.


Ticker: SNE

Esports’ Impact: Sony‘s PlayStation 4 has some of the biggest esports names, such as Street Fighter V and Gran Turismo Sport. The company is making a hard pivot toward esports by partnering with competitive-gaming event producer ESL and launching its own PlayStation tournaments.

Juenger sees an opportunity for Sony to synergize its TV channel, new programs, and PlayStation Vue around esports.

You can view Sony’s stock price in real time here.

Read more about how EA benefits from FIFA and Madden players’ newest obsession.

SEE ALSO: EA gets a boost from FIFA and Madden players crowding into a new way to play games

Join the conversation about this story »

NOW WATCH: Elon Musk explains the one thing that went wrong with SpaceX’s Falcon Heavy flight

Комментариев нет

Добавить комментарий

business news
Bitcoin’s rough patch looks like the Nasdaq during the tech bubble — except it’s moving 15 times faster

Bitcoin fell as much as 70% from its mid-December high through its recent early-February low. The cryptocurrency’s price chart mirrors that of the Nasdaq Composite Index during the dotcom bubble era, but there’s a catch. Historical fluctuations in the Nasdaq should provide a template for how bitcoin will trade going …

business news
‘China is not afraid’: China strikes back at Trump with new tariffs as trade fight escalates

President Donald Trump announced new tariffs on $50 billion worth of Chinese goods on Thursday. Chinese officials strongly condemned the move. “China does not want a trade war with anyone,” said the Chinese Embassy in Washington, DC. “But China is not afraid of and will not recoil from a trade …

business news
Bill Ackman reportedly cashes out of his Nike investment after making about $100 million

Pershing Square CEO Bill Ackman has cashed out his stake in Nike after making about $100 million, according to Dow Jones.  Ackman recently exited a years-long bet in Herbalife that reportedly cost him hundreds of millions of dollars.  The apparel maker is set to report earnings after the market close …