Esports is a billion-dollar industry. This multifaceted sector of the gaming industry encompasses a wide range of businesses, from esports software solutions to professional teams and streaming platforms, each offering unique opportunities for investors.

With millions of enthusiasts all over the world and a major uptick in popularity within the past decade, investing in Esports companies has become quite fashionable, both for new and seasoned investors. Those looking for new opportunities need to understand the strategic value of Esports stocks and what they could mean for them. That’s why we’ve written this comprehensive guide to the world of Esports investing.

Esports is an emerging sector of the gaming industry characterized by competitive video gaming and tournaments between professional gamers.
The global Esports market has grown quite massive over the years, with over 600 million active fans and casual viewers.
Businesses in the industry generate revenue through sponsorship deals, merchandise or ticket sales, live streaming, and selling media rights, among other channels.
Investors can buy into the industry by purchasing stocks of publicly listed companies, buying ETFs, or providing private equity for startups.

What Is Esports and Why It’s a Growing Investment Opportunity

Esports is a term coined from the words “electronic sports.” It refers to a form of gaming entertainment created by combining digital video games with the world of sports. In Esports, professional video gamers participate in competitive matches and tournaments against other players either as individuals or as part of a team.

Esports matches and competitions are similar to traditional sports, except that the participating players are competing in video game matches instead of physical games. These competitions are put together by tournament organizers who set the rules and offer a prize pool for winning players or teams. Multiplayer games like Fortnite, Call of Duty, League of Legends, and Dota 2 are the most popular.

Fans of these video games gather to watch players compete in live Esports programs or stream competitions live on platforms like Twitch and YouTube, bringing the industry to a massive global reach. The commercial success of this industry can be attributed to the growing acceptance of these niche video games as well as the widespread popularity of video streaming.

In addition to streaming matches, viewers may also get to place bets on matches as part of a new niche of the iGaming industry known as Esports betting. You can read our Esports betting guide to learn how this industry works.

The Rapid Growth of the Esports Industry: Stats and Trends

Once considered a niche sector, the Esports industry is now one of the fastest-growing sectors of the broader gaming ecosystem. In 2021, this industry had a market valuation of about $950 million. In about a year, this rose to about $1.3 billion. Today, the global Esports industry is worth over $4.8 billion and may be worth up to $5.9 billion by 2029, giving a compound annual growth rate of 5.56%.

The industry’s growth is fueled by several factors, including the rising popularity of popular multi-player video games such as League of Legends, Valorant, Dota 2, and Fortnite. The increasing integration of video streaming technology and other tools that promote accessibility is also contributing to the industry’s growth.

Today, Esports is not just about participating in competitive gaming. It has now become a multi-faced industry that includes several technology, media, sports, and entertainment companies. They include teams and their sponsors, event organizers, Esports platforms, and streaming technology companies.

Who Is Watching? Demographics and Global Reach of Esports

The Esports market has experienced a major boom in viewership and active participation within the past decade. Currently, there are over 318 million active Esports enthusiasts all over the world and about 322 million casual viewers. Back in 2020, this number stood at 215.2 million, demonstrating just how much growth the industry has experienced within the past few years. Unsurprisingly, the majority of fans are young, tech-savvy males.

Although Esports is now spreading rapidly around the world, it used to be a niche industry popular mainly in Asia. The first World Esports Championships were held in South Korea as far back as the early 2000s. Esports players were also quite popular and celebrated like pop stars.

The majority of interest in Esports is still concentrated in Asian countries, but is gradually starting to spread to North America, Europe, and other regions of the world. As of now, the Asia-Pacific region still accounts for over 57% of global viewership. However, the United States has the highest number of active Esports players (3,530 players).

Key Esports Titles Dominating the Market

Just like there are a number of traditional sports that are popular with players (such as football, basketball, and baseball), there are also some Esports games that dominate the market. While there are emerging unconventional sports like chess Esports, the industry has well-established titles, particularly in the multiplayer battle arena and tactical strategy games niche. Here’s an overview of the most popular competitive video games in the market.

League of Legends

League of Legends is currently the most-watched Esports in the world. This multiplayer online battle arena was released by Riot Games in 2009 and has evolved into one of the biggest sports in the industry, with a global audience and player base that reached a monthly average of 140-150 million users.

Dota 2

Defense of the Ancients (DOTA) by Valve Corporation is another famous multiplayer online battle arena (MOBA) game enjoyed by millions of users worldwide. This game is quite popular for its high-stakes tournaments, which typically involve massive prize pools worth millions of dollars for participants.

Counter Strike

Counter-Strike 2 (CS2), the successor to CS:GO, is one of the most popular Esports titles, especially in the betting market. This tactical first-person shooter game, developed by Valve, is a leader in the Esports gambling industry, thanks to the diverse betting markets it offers. This game enjoys a large player base of over 30 million active monthly users and massive prize pools.

Fortnite

Fortnite by Epic Games is no doubt one of the most popular Esports titles, famous for battle royale mechanics and innovative world-building features. The vibrant graphics and fast-paced gameplay have made this game attractive to Esports fans. Players can compete solo in this game, but can also form teams and duos if they want.

Valorant

Valorant is one of the fastest-growing Esports games in the industry. Despite being introduced in 2020, this game has firmly established itself, particularly in the Esports betting market. The Valorant Champions Tour (VCT), organized by Riot Games, contributes to the popularity of this sport. This global competitive circuit achieved a peak viewership of 1.5 million in 2024.

Types of Esports Investments

Investors looking for potentially profitable opportunities in the Esports industry will find that there are multiple options to explore. They include buying Esports stocks, funding a startup, or simply investing in Esports betting. Here’s an overview of some of the investment options that you can consider.

Gaming and Esports Stocks

Some of the biggest companies in the Esports industry already have their stocks listed on public stock trading platforms like NASDAQ or the New York Stock Exchange. You can target stocks of companies that are directly involved in Esports, such as Esports teams, iGaming software development companies, and game publishers, or invest in companies that provide other products and services for the industry. Hardware providers like NVIDIA or Logitech are good examples of companies with great-performing stocks that serve the industry indirectly.

Top Publicly Traded Companies in the Esports Ecosystem

As an investor in the Esports ecosystem, one of the most important things to know is how to identify top Esports companies that you can potentially invest in. The companies listed below offer some of the best-performing Esports-related stocks in terms of market capitalization and overall value.

Activision Blizzard

Activision Blizzard is a video game titan based in California, United States. In October 2023, the company was acquired by Microsoft and is no longer a publicly traded entity. Investors interested in the company’s vast portfolio, which includes franchises like Call of Duty, Overwatch, and World of Warcraft, must now invest in its parent company, Microsoft (NASDAQ: MSFT). Activision also organizes professional Esports leagues for its key titles.

Electronic Arts

Electronic Arts is one of the biggest companies in the video gaming industry, with stocks listed on the NASDAQ. This company has been in business since 1982. It owns popular football-focused franchise FIFA as well as other games like Medal of Honor and The Sims, Apex Legends, Battlefield, and Dragon Age. EA is currently the second-largest video game company by revenue.

NVIDIA

NVIDIA isn’t exactly a gaming company like the others. The company specializes in making computer chips, which are quite important in the gaming tech space. NVIDIA is currently the biggest company in the world in terms of market capitalization, and a significant portion of its revenue comes from the gaming tech market.

Other notable mentions include Motorsports Games, Alphabet, Nintendo, Comcast, Take Two Interactive Software, and Bilibili ADR.

Investing in Esports Betting

Esports betting is an emerging niche of the industry that involves placing wagers on the outcome of Esports matches. Investors can cooperate with a sports betting software development company like Crustlab to build a betting platform that allows Esports enthusiasts to place bets on matches and tournaments in real time. Read our guide on Esports vs iGaming vs eGaming to understand the peculiarities of this industry and how it differs from conventional sports betting or video gaming.

Esports ETFs: Best Funds to Consider

Another potentially profitable investment option is to invest in Esports ETFs (exchange-traded funds). This type of investment is a sort of container that has stocks from different, closely related companies within the gaming industry.

An ETF provides investors access to several stocks within a single investment, spreading the investment risk among different companies. However, you should know that a sudden shock that affects the entire industry will also have a significant effect on your ETF since all the companies are related. Examples of ETFs that are related to the Esports industry include the VanEck Video Gaming and Esports ETF (ESPO), Global X Video Games & Esports ETF (HERO), and Roundhill Video Games ETF (NERD).

Private Equity and Venture Capital in Esports Startups

Another approach to Esports investing is to look out for early-stage startups that are rolling out new products and services for the industry and providing capital to them. This can be done through direct private equity or VC funds and equity crowdfunding platforms that allow many investors to contribute capital in exchange for equity in a startup.

The recent boom in viewership and revenue in the Esports industry means there’s plenty of room for startups to grow rapidly, potentially multiplying your investment. However, this is a high-risk, high-reward investment option since a significant percentage of early-stage startups fail.

Can You Invest in Esports Teams Like FaZe Clan?

It is possible to invest directly in some Esports teams. A few organizations, such as Enthusiast Gaming Holdings, GameSquare Holdings, and OverActive Media, are publicly traded on stock exchanges. Other teams may offer investment opportunities through private equity arrangements or sponsorships.

It is important to note that the landscape changes quickly. For example, FaZe Clan, once a publicly traded company, was acquired by GameSquare in early 2024 and is no longer directly listed. Therefore, an investment in GameSquare now provides exposure to FaZe Clan.

Understanding How Esports Makes Money

Before investing in any business, you need to understand the economics and know how the business makes money. Understanding the models available in the industry helps you understand how your investments may yield returns over time. Below are some of the ways startups and teams in the Esports industry make money.

Sponsorships and Brand Partnerships

This is one of the biggest ways Esports teams make money. With a global audience that consists of millions of young people, brands can gain significant visibility by associating themselves with Esports teams. Brand partnerships often include spots on jerseys and other team merchandise as well as tailored advertising campaigns across different channels.

Live Streaming and Media Rights

With growing interest in Esports, millions of users tune in monthly to watch Esports players, teams, and professional leagues across platforms like Twitch, YouTube, and Facebook. These live streaming platforms operate on a revenue-sharing model that gives teams a percentage of their profit based on how many viewers they get. Online streaming platforms and media outlets may also pay organizers for exclusive rights to broadcast their content.

Merchandising and Apparel Sales

Like traditional spectator sports, Esports teams have an army of loyal fans that actively stream matches and tournaments. Teams can tap into this loyal fan base for profit with merchandise sales of items like jerseys, hats, t-shirts, jumpers, etc. Many organizations even go as far as diversifying fully into the lifestyle branding niche or partnering with apparel brands to generate revenue through merchandise.

Ticket Sales and Live Events

Teams and event organizers can also generate money by selling tickets to their online (pay-per-view) or live tournament events. In physical events (such as stadium Esports events), additional revenue may also come from selling food and beverages to fans in attendance.

In-Game Purchases and Subscriptions

Esport game publishers and developers still make money the old-school way within their games. The growing popularity of the ecosystem means more people are buying game consoles or software to play these games privately in non-competitive settings. These players either play a subscription or buy in-game assets such as weapons, skins, battle passes, and so on to improve their gaming experience. This is a source of recurring revenue for Esports game providers.

Risks and Challenges of Esports Investing

The continued growth of the Esports sector presents unique opportunities for investors. However, putting your money in a young industry like Esports does come with a few risks and potential downsides. Some of the most notable risks associated with Esports investing include:

Market Volatility and Industry Maturity

Esports is an emerging industry rather than a mature one. An industry like this has a rapidly evolving landscape. As new games are released and new startups enter the market, older teams may lose their fan base or become obsolete, resulting in losses for investors. This makes investing in Esports tricky, as the industry is still constantly adapting to changing trends and evolving consumer preferences.

Legal and Regulatory Barriers

Regulatory bodies across different jurisdictions are just starting to come up with comprehensive laws and frameworks to guide the industry. These laws also tend to vary from one jurisdiction to another, meaning investors and businesses have to navigate regulatory inconsistencies and constantly changing laws in order to adapt.

Monetization and Revenue Challenges

The Esports industry has millions of active viewers and enthusiasts. Yet, converting viewership to reliable income is more about loyalty and brand trust than sheer numbers. A team will only make a profit from selling merchandise or tickets if a good number of its fans are loyal and willing enough to spend their money on the team.

Speculation and Team Valuation Risks

As is usually the case in nascent industries, many teams and organizations in the budding Esports industry may be overvalued due to market hype and other factors. These high-value companies may not live up to their lofty valuations over time, leading to losses for investors when the bubble bursts.

Best Strategies for Esports Investors

If you’re serious about investing in Esports, there are some basic things you should know that will help you mitigate risks and build a potentially profitable investment portfolio. Some of the expert tips and strategies to keep in mind are highlighted below.

Diversifying Your Esports Investment Portfolio

One way to shore up the inherent risks of investing in Esports is to diversify your investment portfolio. This means spreading your investment across various segments of the industry, like buying stocks, ETFs, sponsoring teams, and investing in companies that supply tech to the industry. By doing so you ensure that any sharp drop in a company’s valuation or stock price does not result in total loss of your investment.

Taking a Long-Term View of the Industry

Current trends in the global Esports suggest that the industry will continue to grow in the coming decades. This means you’re likely to benefit from playing the long game and positioning yourself for long-term opportunities instead of just grabbing small short-term wins and running with them. You just need to have an eye for companies with long-term growth prospects and invest in them.

Conducting Research and Due Diligence

Esports is a rapidly expanding industry. This means there’s an influx of new companies and startups. While this presents numerous opportunities for investors, not all of these companies will survive or make profits in the long run. This is why you shouldn’t simply jump on a bandwagon without diligent research.

Before investing in any Esports company, understand how they make money (revenue streams) and how much profit they can potentially make based on their present market. For older companies, you may also check out the past performance of the company’s stock. Operational indicators such as audience reach, brand strength, and how they stand out among competitors can also give you an idea of an organization’s survival prospects.

Following Industry News and Trends

In the investment world, staying informed is paramount. The earliest people to take advantage of a new trend are likely to make the most profit. This is why you must stay informed with industry news to know what’s trendy right now so you can evaluate its market potential. Learning as much as you can about the industry and following the data will also help you make smarter decisions.

How to Get Started with Esports Investing

After considering all the potential benefits and risks associated with Esports investing, you can decide whether or not you want to proceed with your investment. Here’s a simple guide on how to begin investing in Esports, from opening brokerage accounts to evaluating opportunities.

Step-by-Step: Buying Stocks and ETFs

When it comes to investing in Esports, the usual starting point is to check out publicly traded stocks. This means you have to open a brokerage account on trading platforms like Robinhood, Fidelity, and so on. Once registered, you can proceed to fund your account and research Esports-related securities that you can invest in. This includes pure-play Esports stocks as well as baskets of ETF stocks related to the Esports industry.

Platforms for Accessing Private Esports Deals

For investors who prefer to provide private equity for startups or invest in companies that aren’t publicly listed, you need to find platforms that provide you with information about early-stage startups and crowdfunding campaigns. Examples of such platforms include equity crowdfunding platforms like StartEngine. You can also join angel investment syndicates, or “rolling funds,” on platforms like AngelList to provide investment for early-stage startups.

Resources to Monitor and Grow Your Investment

As mentioned above, you need to stay informed and updated on industry news and trends so you don’t miss investment opportunities. This means plugging into relevant portfolio management tools, newsletters, and data sources to track the Esports market. Below is a list of recommended resources that you might find helpful:

Esports Insider (ESI)
SEC Filings (EDGAR)
The Esports Advocate (TEA)
Konvoy Ventures Newsletter
GamesIndustry.biz
Esports Charts
Drake Star Global Gaming Reports
Esports Earnings

The Future of Esports Investments: What Investors Should Watch

So, what does the future hold for the Esports industry? Currently, the market is still in its infancy. But given its trajectory, we can expect this industry to continue to grow and evolve, creating new opportunities for investors. The following are some of the most notable Esports betting trends that we can expect to see in the near future.

Mobile Gaming and Global Expansion

High-end PCs and consoles remain the most popular way players explore video games. However, this trend is changing quickly as developers are now prioritizing mobile-first experiences. In 2019, battle royale games were the most popular mobile Esports titles in Southeast Asia and India. Other games that are fully optimized for mobile devices, such as PUBG Mobile, Arena of Valor, and Clash Royale, have also taken the Esports industry by storm.

Aside from using it to play games, mobile remains the most popular way players consume Esports content. In fact, up to 79% of Esports audiences stream matches on their mobile device. Mobile phones are also the primary channels for discovering Esports-related content and engaging as fans. Considering all of these, game publishers and Esports organizations looking to connect well with fans need to design mobile-first experiences. Investors should also prioritize companies with a mobile-first strategy as they’re more likely to thrive in the long term, considering the industry’s current trajectory.

Web3, NFTs, and Play-to-Earn Models

The primary application of blockchain in the Esports and iGaming niche is in payment processing. However, major Esports organizations are starting to recognize other potential uses of blockchain technology and Web3 to streamline their operations and enhance user interactions. This technology can also open up new revenue models for both players and game publishers.

For instance, blockchain technology can be used to design and produce the next generation of collectibles and in-game assets that have value beyond the game’s infrastructure. These digital assets (in the form of NFTs) can be traded and used across various blockchain platforms and marketplaces. Players can sell these assets for profits in addition to the more conventional revenue streams. This is just one of many ways blockchain is creating a more robust ecosystem for the Esports and gaming industry.

Virtual Reality and Tech Advancements

The world of Esports is heavily tech-dependent, and as new technology continues to emerge, these innovations will shape the future of the competitive gaming industry. One such technological innovation is Virtual Reality, which allows players to interact with their environment while they play, creating a more realistic gaming experience.

Although VR in Esports is still in its early stages, a few established game titles such as Beat Saber and Echo Arena are already taking advantage of this trend. Widespread adoption of new technologies like this will require new tech such as VR goggles, high-end PCs, and gaming consoles.

Artificial intelligence (AI) is another technical innovation that will play a significant role in shaping the future of Esports. Already, this technology is helping developers learn more about players to create personalized gaming experiences. AI is also being used to optimize Esports streaming services to improve the viewing experience. This technology will also prove useful in training professional players.

Merging of Traditional Sports and Esports

In the coming years, we’re likely to see deeper integrations and mergers between traditional sports and Esports. Currently, many Esports games (particularly those based on traditional sports like EA Sports’ FIFA) rely on licensing from traditional sports teams. Games like this continue to lead the charge as both industries continue to advance and evolve.

In addition to strategic partnerships like this, many established sports organizations are also acquiring and creating their own Esports teams or investing in broader Esports infrastructure. These trends will lead to the expansion and diversification of audiences while opening the door to new opportunities for investors.

Final Thoughts on Investing in Esports

Esports is gradually evolving from a speculative industry in its infancy to a more robust sector experiencing rapid growth. Esports investments through stocks, ETFs, direct equity agreements, and other options allow investors to tap into the industry’s full potential and earn long-term profits.

However, it is extremely important that you take a measured approach to investment, especially for a new industry like Esports. You can seek investment advice from professionals to ensure you’re making the right move.

For investors looking to explore the software development niche of the industry, consider partnering with an expert development company with significant industry knowledge like CrustLab. Get in touch with us to discuss your pathway to participating in the Esports industry.

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