At the end of July, 16-year-old Kyle “Bugha” Giersdorf won $3 million at the Fortnite world championship in New York. That’s almost $1 million more than Tiger Woods makes for winning the Masters. This kind of money being given away at an eSports promotional tournament signals two indelible truths: 1) eSports are eclipsing regular sports, and 2) there’s some serious money to be made off of eSports stocks.
In case there was any doubt, eSports has been experiencing a year-over-year growth of 38 percent, leading its market valuation to pass $1 billion this year. In 2017, there were 588 major eSports events that together generated an estimated $59 million in ticket revenues, up from $32 million the previous year.
The total prize money given away in 2017 was $112 million, most of which came from investments from major brands like Mastercard (NYSE:MA), Audi (OTCPK:AUDVF), HTC (OTC:HTCKF), and Coca-Cola (NYSE:KO). Brand investments make up roughly 77 percent of the eSports industry.
Increasingly, major brands are realizing the market potential of eSports, as are the companies holding competitive gaming tournaments and competitions. Investors hoping to make money off of eSports stocks should look to gaming companies that are courting investment and partnerships through their eSports endeavors.
eSports Stocks: Enthusiast Gaming
Enthusiast Gaming Holdings Inc. (TSXV:EGLX) (OTCQB:EGHIF) owns EGLX, the largest gaming exposition in Canada. 30,000 yearly visitors come to the expo, and it’s from this community—as well as the online community, which the company estimates to be about 75 million—that Enthusiast launched its own eSports tournament and entertainment series, “EGLX Rising Stars.”
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Taking place in Toronto, the tournament began this summer and will run into October. Of most interest to investors is the impressive line of sponsors that Enthusiast has courted for the tournament.
In June, the company partnered with Micro-Star International, a world leader in gaming hardware that’s headquartered in Tawain, to be a prize sponsor in the EGLX tournament.
Just over a month later, on July 31, Enthusiast announced that it made a similar deal with Canada Computers. This partnership will see Canada Computers become a premium retail sponsor at Enthusiast Gaming Live Expo, which will take place at the end of the EGLX Rising Stars tournament.
Amongst micro-caps in the sector, Enthusiast has one of the most attractive eSports stocks. It has since seen consistent growth since its IPO in October of 2017, when it entered the TSXV at $0.63. It currently sits at $1.46.
eSports Stocks: Axion Ventures
Axion Ventures Inc. (TSXV:AXV) (OTCQX:AXNVF) (FRA: 2A5) followed suit with its own massive eSports tournament, this one in Thailand.
In April, the company launched its first AAA-quality, eSports-focused mobile game in the country, called INVICTUS: Lost Soul. At the end of July, it began the inaugural INVICTUS tournament, which is pitting more than 5,000 Thailand-based INVICTUS players against each other to showcase their skills as well as the game’s larger eSports capabilities.
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Like Enthusiast’s competition, the INVICTUS tournament will last until October. At 1,000,000 THB ($31,838 USD), the prize pool is considerably smaller than other tournaments. But the game has had impressive retention rates, and it ranked 8th in Google Play’s “Free Games” category on its opening weekend. The ongoing success of INVICTUS has also led Axion to recieve some big industry attention.
Apple (NASDAQ:AAPL), a leading publisher of mobile games, has offered INVICTUS considerable praise, complementing the game’s innovative mechanics and high-quality graphics. Apple Arcade, a subscription-based mobile game service, will launch in the fall, and by all accounts, INVICTUS is expected to be a part of the platform.
“Being recognized by a mobile game leader and given access to their marketing capability will help define Invictus as a must-play game on the App Store and further expand the game’s reach in Southeast Asia and beyond,” said Axion Chairman and CEO Todd Bonner.
Among eSports stocks, Axion has not seen the most growth as of late. From a 52-week high of $1.10 in February, the company’s stock price has steadily fallen to $0.45, where it sits today. But its upcoming expansion outside of Southeast Asia and its expected partnership with Apple provides every indication that it will grow by leaps and bounds in the near future.
Are there other eSports companies making lucrative sponsorship and partnership deals? We want to hear from you! Join the conversation in the comments below.
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Featured image: DepositPhotos © innovatedcaptures
