3 Big Esports Stocks to Watch

- May 29th, 2020

What’s the best place for esports investors to put their money? INN has put together this list of three major esports stocks to invest in.

After a long time growing steadily on the sidelines, esports gaming is coming into the limelight as a potential investment opportunity. So what are some of the big esports stocks to watch?

As investors begin to see more institutional money enter the gaming industry, and as gaming companies expand and the esports fanbase grows exponentially, an answer to that question has surfaced.

From facilities for esports events and tournaments, to merchandise vendors, streaming platforms and advertising companies, stakeholders the world over are clamoring to claim their piece of the esports pie.

Who could blame them? With esports market revenue estimated to be worth US$1.65 billion by the end of 2020, there’s a lot to go around. How can investors and speculators get in on the next big thing?

Let’s take a look at some of the major stocks to watch in the esports space. The three publicly traded esports stocks listed below all have ties to video games, gaming or esports tournaments. They are listed in alphabetical order, and all data was current at the time of publication.

1. Activision Blizzard (NASDAQ:ATVI)

Current share price: US$70.73; market capitalization: US$54.5 billion

First on our list of large esports stocks is Activision Blizzard. This California-based interactive entertainment company has an impressive portfolio of popular games, including the ubiquitous and lucrative Candy Crush Saga (which owes a lot of its popularity to social media buzz), as well as World of Warcraft, Diablo, StarCraft, the Overwatch League, Call of Duty and many more well-known games.

The company’s platform has five operating units: Activision, Blizzard Entertainment, King Digital Entertainment, Major League Gaming and Activision Blizzard Studios. Both the Activision and Blizzard Entertainment departments create, publish and distribute video games, but they have different streams.

For instance, Activision works on games like Call of Duty, whereas Blizzard works on the likes of World of Warcraft and its related franchises. King Digital Entertainment is the department related to mobile games like Candy Crush Saga, and Major League Gaming works on community building and user experience. And finally, Activision Blizzard Studios is in charge of creating content for film and television.

The company covers a lot of ground and produces a huge number of video games that are played by both professional gamers on esports teams and casual gamers. It’s no wonder that this brand has gained a lot of recognition for being an industry standout and a video game stock with investing potential.

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2. Electronic Arts (NASDAQ:EA)

Current share price: US$119.51; market capitalization: US$34.5 billion

Electronic Arts is one of the world’s leading esports companies. Its video game offerings covers many genres, from sports to action/adventure to role playing to family games. Among others, the California-headquartered company owns key major titles such as the The Sims, Madden NFL, FIFA, Battlefield, Need for Speed, Dragon Age and Plants vs. Zombies.

The company is also known for its competitive gaming series, which focuses on its signature FIFA and Madden NFL games. For FIFA players, the ultimate goal is make it to the company’s FIFA eWorld Cup, where the top 64 players are invited to compete.

3. Tencent Holdings (OTC Pink:TCEHY,HKEX:0700)

Current share price: US$55.78; market capitalization: US$533.1 billion

Unlike the other two companies listed, Tencent Holdings is a holding company, as its name suggests. Its holdings are related to online games, software development, online advertising, applications on many different platforms, online music and fintech services.

As can be seen, the Chinese firm is not a pure-play esports company, but it has a massive footprint in the space via its ownership of Riot Games. Through Riot, the company owns a stake in one of the most popular video games in the world today: League of Legends.

League of Legends is popular not only with players, but also with viewers. Esports tournaments all over the world are centered on it, and it has an enormous following from video game enthusiasts. Case in point: the League of Legends World Championship event pulled in 86 million hours of live viewership on Twitch, a subsidiary of Amazon (NASDAQ:AMZN) and one of the world’s biggest live-streaming video platforms for gamers. Riot Games is reportedly the most-watched channel on Twitch.

All that said, Tencent has a great deal of influence when it comes to esports gaming viewership and the online gaming community — this could be the equivalent to the keys to the castle in terms of profits.

Which large esports stock would make a good investment, and why? Tell us in the comments if and how you’d make the leap into esports stocks investing and the gaming industry.

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Securities Disclosure: I, Nicole Rashotte, currently hold no direct investment interest in any company mentioned in this article.

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