The esports industry is exploding at a truly remarkable rate, firmly cementing its position as a formidable entertainment outlet on par with some of the most popular traditional sports. The 127 million people who tuned into the League of Legends Mid-Season Invitational made it the most-viewed esports event ever, and given that it was more than the total viewing figures for all six NBA final games combined, esports have firmly moved into the mainstream.
Seeing as it’s Halloween season, we’re finding it difficult to stay away from the Halloween puns here at MicroSmallCap, but the potential that small-cap esports stocks have as the industry goes from strength to strength genuinely are scarily good. With the esports industry expected to generate $1.6 billion USD in revenue by 2021, a growth rate of over 80% in just three years, it really is all treat and no trick with these stocks.
To get an insight into how much faith large-cap stocks are placing in the growth of the industry, simply type the name of any major company into your search bar followed by “esports”. PepsiCo (NASDAQ:PEP) has a range of esports sponsorship projects across its drink and snack portfolio. Sports apparel giant Nike (NYSE:NKE) also has a line of esports sponsorships. Comcast (NASDAQ:CMCSA) is building a $50 million USD esports stadium in Philadelphia. However, small-cap stocks are where the real growth takes place, so let’s take a look:
Versus Systems Inc
Versus Systems (CSE:VS) (OTCQB:VRSSF) is a financial technology platform that allows video game publishers and developers to offer prize-based matches of their games. The Versus platform allows players to compete in matches and tournaments of their favorite PC games to win digital goods, physical goods, and real-money, which is a key component in esports because what’s a sport without an incentive to win? The company’s unique platform, Winfinite, is being integrated by various gaming developers, including popular mobile game developer Ludare.
Having just expanded into the UK, where the annual gaming market is valued at over $5 billion USD, the company looks well placed to capitalize on the European market on top of its already expansive North American operations. VS stock is currently trading at just $0.23, making it a really attractive penny stock play in the esports market, because, after all, everyone loves prizes.
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Axion Ventures
Axion Ventures (TSXV:AXV) (OTCQX:AXNVF) is an investment firm that specializes in picking out high potential companies in the gaming industry and providing them with the much-needed capital they need to realize that potential. The company recently launched a joint venture with True Corporation (OTC:TCPFF), a major telecom company in Thailand, called True Axion Interactive. The venture is positioned to become the most capable game development studio in Southeast Asia by leveraging Axion’s business model and industry expertise with the support of True Corporation’s publishing and media capabilities.
The company has also entered into an agreement with an unnamed leading video game producer to develop a game for global distribution on multiple platforms, with a demo expected before the close of the year. Axion has already launched one mobile game, Rising Fire, which has an audience of over 15 million users and is distributed by gaming heavyweight Tencent (OTCPK:TCTZF). Axion stock is another great penny stock on the esports market, valued at just $0.28.
The Takeaway
So, that’s our pick of small-cap esports stocks with high potential, and there’s no doubting that there’s room for substantial growth with both stocks. As they’re both penny stocks, there will undoubtedly be some volatility, but if you’ve got an appetite for risk, they might be just the stocks for you.
What do you think?
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Featured Image: DepositPhotos © IrynaTiumentsev
