The crypto bubble may be on the verge of bursting, but the esports sector is going from strength to strength. At the end of 2022, the global industry was worth an estimated $1.44 billion. This year, worldwide revenues look set to top that. With esports becoming increasingly accepted as a legitimate form of competition, it’s little wonder that more investors are throwing significant sums of money at it.
The Investment Potential of Esports
If the market value alone wasn’t enough to convince you that esports is worth investing in, consider the number of people actively tuning in to esports fixtures. In 2022, esports events brought in more than 532 million viewers worldwide. This is more than many traditional sports.
But how does the average person make money from investing in esports? Well for starters, you can consider trading stocks. You have a few different options here. You can invest in esports teams themselves, provided they’re publicly traded. If team stocks are too pricey for your budget, think about sinking some money into game developers. This isn’t possible for every developer, but the likes of Electronic Arts, Capcom, and Blizzard both offer investment potential. You can even invest in companies manufacturing gaming hardware.
Who’s Investing in Esports?
It’s not just aspiring traders looking to bolster their investment portfolio who are waking up to the appeal of esports. Many famous faces have also put their money where their mouth is. Professional athletes were among the first to invest in esports. Basketball legend Michael Jordan is something of a pioneer here. In 2018, he purchased significant shares in the parent company that owns Team Liquid, aXiomatic. Jordan joined forces with the
Carlyle Group, a private equity firm, investing more than $25 million total. Has Jordan’s investment paid off? A quick check of Team Liquid’s performance at www.1337pro.com/en/csgo/match-scores suggests he’s got nothing to worry about.
It’s not just sports stars who’ve embraced esports investments. Jennifer Lopez is thought to have invested up to $15 million in NRG Esports, following in the footsteps of Shaquille O’Neal. Fellow singer Rihanna has also entered the fray, attaching Fenty Beauty, her cosmetics brand, to League of Legends. In 2021, Fenty Beauty was involved in creating new content for the hit title from Riot Games, as well as contributing to the art direction of the LoL’s Netflix spinoff series, Arcane.
Are Esports Investments Worth the Risk?
As with any emerging industry, detractors will tell you that esports is a high-risk venture. To some extent, this is true. Esports is still a fairly new market, with little in the way of regulation. However, expect this to change in the years ahead. If you’re looking to play it safe, think about pooling your resources and investing in an established team that isn’t likely to disband anytime soon. You’ll be paying a little more for that upfront investment, but future rewards are all but guaranteed.
One of the benefits of diverting money into an up-and-coming industry is that the payback period is relatively short. In other words, if all goes well, you won’t have to wait too long before you start seeing capital gains.
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