eSports Game On! At the Forefront of a New Emerging Sector

eSports enthusiasts worldwide are expected to reach 250 million in 2021, with an implied 5-year CAGR of 14.4%

SmallCapPower | February 11, 2018: eSports is defined as competitive, multiplayer gaming at a professional level between players and teams. eSports is available to all, including the amateur competitive gaming participants; and individuals who compete in gaming leagues at a pro or amateur level. According to Newzoo’s 2018 Global eSports Market Report, the number of eSports enthusiasts worldwide is expected to reach 250M in 2021, with an implied 5-year CAGR of 14.4%. Consolidated industry revenue is expected to reach 1.7B by 2021, with an implied 5-year CAGR of 27.4%.

eSports Stocks: Next Big Opportunity for Investors 

Source: Newzoo 2018 Global eSports Market Report

Major players are entering the space. Tech giants such as Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG) have seized opportunities in this burgeoning industry by acquiring and creating their own live eSports streaming sites. In August 2014, Amazon acquired Twitch, a game-streaming service valued at $970 million. This purchase was an investment to bolster Amazon Web Services (AWS), the Company’s $7B on-demand cloud computing platform. Twitch features major eSports tournaments, with the majority of users streaming video game content from home. Similarly, Google created a YouTube channel called YouTube Gaming to attract eSports enthusiasts and occasional viewers. As the industry starts to mature, established global brands are tapping into the space. Nike (NYSE:NKE) announced that Jian “Uzi” Zihao, a League of Legends star, will appear in an upcoming campaign alongside Lebron James. With a significant increase in popularity in the last couple of years, celebrities and athletes alike are beginning to join the movement by launching their own companies or investing in the space.

Enthusiast Gaming Holdings Inc. (TSXV:EGLX) is a digital media company that engages in the developing and operating of online video gaming communities for users worldwide. With a platform of over 80 gaming content websites, and over 75 million monthly active users, the Company also owns the largest gaming exposition in Canada with an attendance exceeding 30,000 visitors. The Company has experienced significant acquisitive growth resulting in a tremendous increase in monthly visitors from 2 million in 2015 to 75 million currently. The Company reported revenue of $2.8 million, a significant increase from $0.66 million in 2017. On January 7, the Company announced its definitive agreement with The Sims Resource (TSR), acquiring 100% of the assets. Valued at US$20 million, the acquisition is set to be completed on February 15, 2019.

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FANDOM SPORTS Media Corp. (CSE:FDM) is a sports entertainment and gaming company focused on finding and creating the best interactive sports content. The Company allows sports fans to unleash their primal sports passions by engaging with other fans, cheering for their favourite teams and jeering their opponents. On December 6, 2018, FANDOM SPORTS became a member of the Consumer Technology Association (CTA), an association that acts as an advocate for entrepreneurs looking to shape the future of the consumer technology industry. On January 10, 2019, the Company launched its platform at the Consumer Electronics Show (CES 2019), inviting a select few industry professionals in sports, eSports, technology, and media.

ePlay Digital Inc. (CSE:EPY) is a mobile game developer and publisher, which specializes in sports, eSports, and Augmented Reality (AR) titles, including their new AR title, Big Shot Basketball. Big Shot is the first AR sports mobile game on the market and the Company announced at the 2019 Consumer Electronics Show (CES) that the game will add a new AR version. Operated by an award-winning team, ePlay utilizes the Company’s Mobovio eSports Live Streaming and Game Engine to bring several game titles to the market for leading companies, such as ESPN (NYSE:DIS), Sony Corp. (NYSE:SNE), and more.

*Share prices are as at close January 25, 2018, data obtained from S&P Capital IQ

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