Why invest in the video gaming and esports sector?
There are 3.3 billion active gamers in the world.
Invest in a global phenomenon
The video game industry is disrupting traditional sports and media and experiencing a period of transformative growth, which is accelerating as technology continues to advance.
According to YouGov, “When comparing different weekly media activities by age, we see that the popularity of non-traditional digitally enabled activities such as gaming, social media, video streaming, and video content in general are more popular media choices among the global consumers aged under 45. On the other hand, traditional media activities such as watching live and non-live TV, listening to the radio, and reading a newspaper are more prevalent in the older age groups.2”
Newzoo expect that the number of gamers worldwide will reach 3.38 billion, growing by over 6% per year. The global games market will generate revenues of $184.0 billion.3
Newzoo also predicts esports revenues to reach $1,866.2 million, showing a Compound Annual Growth Rate (CAGR) of 13.4% from 2020 to 2025.4
Esports reflect the convergence of entertainment, video gaming, sports, and media businesses. With an active, engaged and relatively young demographic, the stage is set for sustainable long-term growth.
How to invest in video gaming and esports
Investors can gain exposure to video gaming and esports companies by buying shares in video gaming and esports companies directly or via a fund or ETF which focuses on investing in the video gaming and esports sector.
In Australia, the challenge for ASX investors wanting to gain exposure to video gaming and esports is that opportunities are limited. The local sector is relatively small and illiquid therefore an allocation to global video gaming and esports is an important diversifier.
Investors can access a portfolio of global video gaming and esports companies in one trade on ASX with an exchange traded fund (ETF).