According to Newzoo report, eSports has finally gone mainstream, becoming one of the most remarkable phenomena of the internet age. The rapid progress of technology over the past decade and the related changes in media consumption models have played an integral part in the ascent of competitive video gaming, notes distinguished financier Jason Sugarman. In 2017, the value of the global eSports market was $655 million, and the figure is estimated to reach $1.79 billion by 2022, according to Statista. Specialist research company Newzoo projects that the number of eSports viewers worldwide will rise to 453.8 million in 2019, increasing by 15% year-on-year. Given its impressive revenue and audience growth, this exciting new industry is understandably catching the attention of investors, but most of them are uncertain how to enter the market.
While acquiring a stake in an eSports company seems like the obvious place to start, it is also the most likely to present a challenge as these ventures tend to be privately owned and rarely open up for new investors, Jason Sugarman explains. Even when they do, the cost may be prohibitive for members of the general public – the typical buyers into such companies are venture capital groups, angel investors, sports magnates, and celebrities. However, other options are available to those wishing to include eSports in their portfolios, which they can do via the public market. There is a sizable choice of listed companies with close ties to the industry, be it through the provision of hardware and software or ownership stakes in professional gaming projects. One example is Chinese corporate giant Tencent, which assumed full control of Riot Games in 2015 after paying a reported $400 million for a 93% holding in 2011. The latter is the company behind League of Legends, which is consistently ranked among the top five eSports games. Besides seeking involvement in the sector through game publishers and hardware suppliers, investors can opt for participation in the stock of enterprises that own streaming platforms. The current leaders are Amazon, whichpaid $970 million for Twitch in 2014, and Google parent Alphabet, whose eSports ambitions revolve around YouTube Gaming.
Another opportunity to capitalize on this booming market is via investing in an adjacent one: betting. NJGames.org estimates that eSports bets totaled $5.5 billion in 2016, forecasting that the amount will surge to $12.9 billion by 2020. A stake in an online casino, for example, would offer a foothold into this explosively growing industry, but there is an issue with this approach: sports betting remains illegal in most states. However, the situation is likely to change after the US Supreme Court declared unconstitutional the Professional and Amateur Sports Protection Act (1992) in 2018 and paved the way for all states to legalize sports betting should they wish to do so. After this landmark ruling, the value of companies such as Unikrn surged, giving Mark Cuban cause to celebrate. The legendary tech investor, who owns a stake in the Seattle-based eSports betting company, told ESPN after the Supreme Court decision was announced, “It doubled the value of the professional sports franchises in a second. It will increase interest, it will add to what happens in our arena and in stadiums. It will increase the viewership for our biggest customers online and on TV.”
Jason Sugarman has established himself as a financial industry expert with a stellar track record in the fields of asset-based lending, private equity, and debt investment. A professional with more than 20 years of experience, he has worked on financial services, infrastructure, and real estate projects around the world. He has been running a family office in Beverly Hills, California, since February 2007, and is currently focusing on investments in 5G companies which enhance and enable the eSports industry. To date, Jason Sugarman has made a number of eSports investments which have increased by five-ten times.
Jason Sugarman – LinkedIn: https://www.linkedin.com/in/jasonsugarman/
Jason Sugarman Discusses the Benefits of Collegiate eSports for Educational Institutions: https://finance.yahoo.com/news/jason-sugarman-discusses-benefits-collegiate-164000142.html