Experts peg the average annual growth rate of the esports entertainment industry at 27.6%. Investments in the esports leagues, video game developers, teams, and businesses in this niche will reach around $1.6 billion by 2021. Looking at this explosive growth, esports should be a serious candidate as an arena of investment for entrepreneurs looking to cash in on the rise of digital culture.
The easiest route to investing in esports would be buying stocks of companies that are directly involved in the creation of games or the organization of esports tournaments. Activision Blizzard, the developer of bestselling games like Overwatch and Starcraft, and Tencent, the company behind Riot Games which developed League of Legends, appear to be safe investments.
380 million people all over the world watch esports and entrepreneurs can stand to make serious revenue by starting service businesses catering to this target demographic. Entrepreneurs can make digital content offerings for these esports fans or sell products for would-be esports players.
Finally, business investors who want to directly engage in digital sports entertainment can dip their toes in by starting a franchise team. The team can make money by winning prizes or earn revenue from streaming and product placements.
Esports’ promise may be more than an illusion at this point, considering how this industry is linked to the growth of the internet and video games. It’s worth a look for anyone who wants to get into the sports business but does not have the kind of capital for basketball, football, or big-league sports investments.
Tyler Tysdal is the Managing Partner of Platte Management, a single-family office with active investment strategies in private equity and real estate. Visit this blogfor related reads.
Tyler T. Tysdal 