Exploding Esports Space Setting Up for Overactive Media, Electronic Arts, and Enthusiast

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The growth numbers and the expected upside in the emerging esports sector will surely rev up the heart rate of most savvy investors.

With plenty of reasons to play and a full roster of investment targets in the market, we’ll take a look at who the potential big winners in this exploding space could be.

So what are esports, anyway? Well, there’s a whole generation who have grown up playing video games — first, on consoles in bedrooms and basements, then on computers and laptops. That morphed into online gaming as bandwidth improved and processors got more powerful.

Now, much of the action has gone wireless and mobile, with player participation anytime anywhere — players competing with each other in a growing number of popular games.

Well-known titles such as PUBG, Minecraft, League of Legends, and Call of Duty, among others, attract huge audiences of players and viewers.[1] Moreover, those competitions have evolved into professional leagues, just like the NBA, MLB, NFL and the NHL, for example.

Esports is well on its way to achieving global audiences that match the numbers of fans tuned into real world sports — along with the potential for the same scale of revenues involved in the big leagues of real world pro sports.

Esports Joins the Big Leagues

Esports has become a lucrative industry in recent years, generating hundreds of millions of dollars in profit.

This popularity has allowed it to function much like other professional sports leagues: players are paid by the operators in exchange for their participation; the operators are paid by the distributors in exchange for the right to broadcast the games and by the audience in exchange for the right to watch.

Also, as with other sports and industries, esports is attractive for the advertisers and partners that are featured alongside the games.[2]

Take FIFA, for example. Todd Sitrin, SVP and GM of the EA competitive gaming division observes that “Competitive FIFA viewership growth has skyrocketed. This growth was fueled by an expanded EA SPORTS™ FIFA 19 Global Series which now includes millions of competitors, seventeen football league partners hosting top-flight leagues, and dozens of licensed events being executed throughout the year.”

The event, which was broadcast from London’s O2 Arena, saw more than 47 million viewers across online platforms.

In 2021, the global esports market was valued at just over US$1.08 billion, an almost 50 percent increase from the previous year. Additionally, the esports industry’s global market revenue is forecast to grow to as much as US$1.62 billion in 2024. By 2024, there are expected to be over 577 million viewers of esports worldwide.[3]

 

 

If you have any doubt that esports are going big league, big time, take a look at the top paid competitors. Earnings of a Danish professional gamer, Johan Sundstein, better known among his peers as “N0tail,” have reached almost US$7 million through playing Dota 2. And there’s plenty of money to go around. The International 2019, a major esports tournament, offered a total prize pool of US$34.33 million.

The thing is… this party is just getting started. Where the average revenue per audience member in real world sports amounts to $50 annually and up, depending on the sport, the esports number is more like $8. Since the esports industry is in its infancy, there is still plenty of room to grow per viewer revenues. And remember, you’re talking about audiences in the hundreds of millions of devotees.

While it’s getting harder all the time to reach sports audience members with traditional media, esports succeed where others fail.

This audience is typically comprised of those aged 20–40, the so-called Gen Zs and Millennials who are difficult to reach, ad blocking, media savvy, and mobile digital native. They have turned off traditional advertising across social media and long ago ditched legacy media such as TV and newspapers.

Gaming is a huge part of their daily life and they are significantly more likely to be gamers than traditional sports fans.

The Esports Juggernaut Is Just Getting Started

OverActive Media (TSX-V: OAM) Investor Presentation

To underline just how serious esports have grown, have a
look at Canada-based OverActive Media (TSX-V: OAM). The company has been built specifically for esports by execs who know how to operate major league sports properties in the real world.

President and CEO Chris Overholt formerly served as CEO of the Canadian Olympic Committee, as VP and CMO of the Miami Dolphins and Sun Life Stadium (now Hard Rock Stadium), and served in senior leadership roles with the Florida Panthers and Maple Leaf Sports and Entertainment.

Surrounding Overholt, you’ll see a group of professionals with similar big league backgrounds.

Among them, VP Alyson Walker was formerly part of Brand Partnerships & Client Strategy at Bell Media, one of Canada’s top-tier communications companies with operations including television broadcasting and production, radio broadcasting, digital media and internet properties.

In addition, other members of the OverActive management team include Brad Stack, Nike Golf’s Canadian Brand Director; Mike Armstrong, Brand Strategy Lead at Google and Director, Sports & Digital Innovation Marketing at CBC, Canada’s national broadcaster; and Adam Adamou, Executive Chairman of International Datacasting Corp., just to name a few.

These are people who know big league sports marketing and how to translate real world success into the esports arena — smart people backed by smart money. That should tell you just how much potential this segment has.

While some esports companies focus on one component of the esports industry, OverActive Media is one to watch with revenue-generating…

  • professional esports team and franchises
  • content producers with live and online events
  • brand marketing, partnerships and IP licensing
  • facility ownership

With the philosophy “own the franchise, own the audience,” OverActive Media is doing just that. They now have exposure and access to a community of over 130,000,000! [4]

 


WATCH VIDEO: Introducing OverActive Media

 

OverActive Media (TSX-V: OAM) is a company that deserves a serious early look by investors, having raised an impressive CAD$40 million (US$32M) this past spring.[5]

If you’re not breathing just a little hard by now you may need to check with your doctor to confirm that you still have a heartbeat.

The only real question is, how do we shuck this juicy oyster when looking for other esports opportunities? Well, there are a few angles.

Where to Start Investing in Esports

As I explained above, there are many opportunities for investing in the lucrative esports sector. Below are some prime areas for you to explore as you educated yourself on the market as well as some companies with potential to help you start your research.

 

Game Developers and Publishers

Games companies are primarily involved in the business of developing and distributing gaming software. In several cases, these companies own and operate competitive esports leagues.

Activision Blizzard (NASDAQ: ATVI) is a leading developer and publisher of interactive entertainment software. The company operates three primary business segments: Activision (console-focused), Blizzard (PC-focused) and King Digital (mobile-focused). The company’s most popular esports franchises include Call of Duty, World of Warcraft, Overwatch, StarCraft, and Hearthstone.

Electronic Arts (NASDAQ: EA) is one of the largest video game software companies in the world, currently ranked number two throughout Europe and North America in terms of revenue. EA publishes and distributes games, content and services on a variety of platforms including consoles, PCs, mobile phones and tablets. Notable intellectual property includes established brands such as FIFA, Madden NFL, The Sims, and Battlefield, and newer releases Apex Legends and Anthem.

 

Media Platforms

Esports media companies operate livestreaming platforms, entertainment properties, and / or esports events. These companies may also own or operate esports teams.

Tencent-backed Huya (NYSE: HUYA) and sister company DouYu (NASDAQ: DOYU) are two of the largest livestreaming platforms in China. Both companies operate as platforms for watching and interacting with live-streamed content focused on gaming and esports. In recent filings Huya and DouYu collectively…

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