Coronavirus and Gaming Industry
It has been said that coronavirus accelerated many trends (especially becoming more digital) and this is no different in the Gaming Industry.
The stock chart below speaks for itself:
This ETF is related to gaming companies (GAMR). TLDR ETF is taking a bunch of companies and putting them into one stock. It is used to diminish risks by following the diversification strategy.
I would like to highlight 3 points:
- Esports over traditional sports
- More time playing
- New market and revenue opportunities
1. Esports over traditional sports
During coronavirus almost all traditional sporting events got cancelled or postponed (remember the Olympics?). This opened a bigger opportunity for Esports to take place.
Not only that, it was growing even before coronavirus. For example, League of Legends world Championship had a big growth in 2019:
What is also interesting is the new distribution channels. For traditional sports we usually just had TV, while esports has a lot of viewers in Twitch and YouTube.
2. More time playing
We noticed also a surge of 40% in time spent on online gaming.
Also, some people are using games as a way to socialize during the lockdown period.
The time spent in videogames is continuously increasing and that started concerning big tech companies like Netflix. They considered the game Fortnite as big competitor (Fortnite is a bigger rival than HBO)
Also, does anyone remember the big fight between Apple and Epic Games because of fees? Another sign that games are taking a bigger relevance.
3. New market and revenue opportunities
What is interesting compared to traditional sports is that Esports creates whole new markets.
Streamers: people stream themselves while playing games. We can see a lot of big channels rising on Twitch (such as Gaules, an ex CS pro player).
Also, it has created the opportunity for anyone to stream and comment while competitions are going on (depending on the distribution rights).
Online bets: as any other professional sports, now we see creation of platforms were you can place bets for Esports competitions. (Example: https://betway.com/)
Marketplace for items: We have another market created around items such as skins for characters (outfits). (Example:https://dmarket.com/)
Online teaching: as more people want to become professional players, we see a rise of people looking for courses, coaching, training, etc to become pro players.
There are so many more opportunities/markets that I see appearing everyday and this list will just keep growing.
Some interesting sources if you would like to know more:
Podcast:
Can esports dominate the attention economy?
Esports close in on the competition
Reading: