Millennials are contributing to the expanding trend of online gaming and streaming. Consequently, corporations are trying to use this trend as a method to make a profit.
An article written by Kimberly Chin and published by Markets Insider stated that esports, multiplayer video games played competitively by professional gamers for spectators, are growing in popularity and could increase tech companies’ earnings.
Senior Analyst Todd Juenger at Sanford C. Bernstein & Co. LLC believes that esports are being undermined, but that potential investors could take advantage of their growing popularity.
Esports has attracted more eyes in the United States than the NHL and is expected to surpass MLB views by 2020, Juenger said.
He expects an increase of active viewership from 143 million to 250 million, and 307 million occasional viewers to over a half a billion by 2021.
Activision Blizzard Inc. is the “most profitable western interactive entertainment company,” according to its company website. Blizzard quickly jumped on the esports bandwagon with its release of a professional esports league for the game “Overwatch,” called the Overwatch League. According to Juenger, “Overwatch League represents a rare opportunity for public market investors to become equity owners in a professional sports league, at an early stage.”
Electronic Arts Inc. has taken a bottom-up approach to making money off esports by trying to get viewers more involved in sports events as well as the company’s video games. Juenger said there will be an “incremental monetization opportunity over time.”
Microsoft Corp. is making its move to enter the esports market with its acquisitions of Beam and Playfab in addition to constructing esports studies and hosting esports competitions.
Sony is also getting its feet wet with esports by partnering with Electronic Sports League, commonly known as ESL, which organizes gaming competitions across the world. Juenger is optimistic that Sony will get acquainted with esports by merging its TV channel, new programs and PlayStation Vue, a live streaming service that features sports, news and shows.
Esports is also rising in India, with its gaming industry expanding exponentially due to investment from prominent organizations such as Tencent Holdings Ltd., Youzu Interactive Co. Ltd., Nazara Technologies Ltd. and Paytm, backed by Alibaba Group Holding Ltd.
With an industry worth over $890 million, India has more than 250 development companies, an increase of 900 percent, up from 25 companies in 2010. This upsurge in popularity is due to the fact that games are more accessible to the general public through smart devices such as tablets.
Felix Manojh, one of the founders at Flixy Games, a mobile game publisher that has partnered with Japanese game developers Axel Mark Inc. and Tayutau Co. Ltd, said that, “Rising smartphone users created a stable marketplace for mobile gaming sector, as new users are constantly on the lookout for new forms of entertainment.”
With the increased interest in India, there is more investment into esports, with the largest contributions coming from China. Paytm and Hong Kong’s AGTech Holdings Ltd. released Gamepind, a gaming portal. Tencent, a leading provider of internet value-added services in China, is planning to move into India’s gaming industry this year.
Just like Blizzard, Microsoft and Sony, Nazara’s interest in the sports market has been peaked. Nazara, one of the leading mobile games companies in Mumbai, plans to develop esports by investing approximately $4 million every year for the next five years, totaling $20 million.
One of Nazara’s investors, ESL, wants to globalize esports events such as ESL One, ESL Pro League, Intel Extreme Masters and The International while attracting sponsors. According to Manish Agarwal, CEO of Nazara, ESL’s goal “will give a massive boost to the creation of best esports players in India.”
In an interview with The Ticker Victoria Capalbo, a freshman at Baruch College, talked about the increasing popularity of video games, “I think it’s great to see video games becoming widely recognized both in the realm of esports and in the world in general.”
Capalbo went on to say, “As a gamer, it’s comforting to see that the very thing that has brought me great joy in life is being more widely distributed and is easier to access. My only hope is that certain companies don’t try to monopolize off this growth and start pushing pay to win strategies — Blizzard does this now with Overwatch’s lootboxes with limited time events.”
Another Baruch freshman, Christopher Wong, added, “Digital gaming is really viral everywhere now and probably will go mainstream one day just like how baseball and soccer are.”
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