Esports Stocks: Top 7 Stocks Benefiting From the Esports Industry
Over the past several years, the global video gaming industry has exploded, with the entire industry expected to become a $293 billion market by 2027. And one of the biggest and fastest-growing subsets of the gaming industry is esports.
Esports can loosely be defined as games played by professionals—usually playing on esports teams—that are watched by spectators either online or at in-person events. And while a lot of sports-based video games are sometimes part of the esports industry, many esports games aren’t traditional sports-based games.
For example, the top esports game based on total prize winnings in 2020 was a multiplayer first-person shooter called Counter-Strike: Global Offensive. And competitive gaming has seen a massive uptick in global viewership: from about 663 million in 2020 to 729 million.
Even more impressive is that the esports market will cross the $1 billion threshold for the first time ever in 2021, according to the latest data by esports market research firm Newzoo.
For investors looking to dive into esports investments, below you’ll find a list of the top esports stocks to bet on in the coming years.
6 Esports Statistics That Prove This Industry Isn’t Playing Around
- Esports events have amassed 26.6 million monthly viewers in the United States
- U.S. esports ad revenue will reach $225 million in 2021
- Out of the $1 billion esports market, 75% is comprised of media rights and sponsorships
- There will be 920 million global esports viewers by 2024
- Esports winnings reached a staggering $211 million in 2019 and are expected to return to these levels when the pandemic has subsided
- Concurrent viewers of esports tournaments on the Amazon-owned online streaming platform Twitch will reach 3.2 million in 2023
7 Best Esports Stocks
Here are the 7 best Esports stocks in the industry right now.
- Electronic Arts
- Take-Two Interactive Software
- Tencent Holdings
- Activision Blizzard
- Huya, Inc.
- Sea Limited
- Corsair Gaming
Electronic Arts (Nasdaq: EA)
Electronic Arts is one of the biggest names in the video game industry and its massively popular games including FIFA and Madden NFL have propelled the company into the esports arena.
The video game publisher hosts FIFA and Madden competitive gaming tournaments for gamers, allowing both amateur and professional players to participate. EA’s Apex Legends battle royale-style game is also a huge esports title for the company.
EA said that at the end of its fiscal year 2021, Apex Legends had more than 100 million players over its lifetime, with Season 8 of Apex boasting more than 12 million weekly average players.
Net revenue reached $5.6 billion in fiscal 2021 and the company’s management estimates it’ll rise to $6.8 billion in the coming year.
With EA already a leader in the video game industry and owning several titles popular in the esports world, investors should keep an eye on the prolific gaming stock.
Take-Two Interactive Software (Nasdaq: TTWO)
Take-Two Interactive (NASDAQ:TTWO)
Price: $173.42 (as of close Jul 30, 2021)
Take-Two may be best known for its insanely popular Grand Theft Auto (GTA) franchise. The latest version of the title will be released on consoles later this year, with tons of gamers anticipating the latest installment.
But Take-Two also makes the iconic NBA 2K franchise, which has helped the video game publisher to tap into the esports market. Back in 2017, the company partnered with the National Basketball Association to create the NBA 2K League and the partnership is shaping up to be a huge success.
Take-Two started its fourth year of the NBA 2K League in mid-2021 and management said on a recent earnings call that the esports league “has the long-term potential to enhance engagement and to be a driver of profits for our company.”
Video game companies can sometimes experience volatility with their share prices based on consumer demand for their games. But over the past five years, Take-Two’s share price gains have more than tripled the gains of the broader market.
Tencent Holdings (OTC: TCEHY)
China-based Tencent Holdings is the world’s largest game publisher, with major titles including Honor of Kings and League of Legends. The company also owns a 40% stake in Epic Games, the maker of the insanely popular Fortnite.
Tencent has set its sights squarely on the esports market and has already made huge strides in the space. The company hosted a massive League of Legends world championship in Shanghai in 2020 with 6,000 attendees and more than 45 million online viewers!
Tencent’s League of Legends Pro League is the largest esports league in the world and had more than 100 billion views in 2020.
Investors looking to tap into the global esports market would be hard-pressed to find a better company than Tencent. China’s mobile and PC gaming market will reach nearly $47 billion by 2024 and Tencent has already proved that it can successfully tap into traditional gaming and the esports market.
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Activision Blizzard (Nasdaq: ATVI)
Activision Blizzard has a long history of gaming, with Activision creating hit video games like its 1982 breakout success Pitfall!. Since then, Activision has continued with an amazing amount of hit games.
Overwatch, Call of Duty, and World of Warcraft are the company’s top esports titles, each with its own league and massive followings. The company is increasingly focusing its efforts on building out its esports business, though the pandemic has hampered some of its efforts and forced the company to lay off some of its esports employees.
But Activision’s successful titles and growing audiences should help the company continue to grow as a rising esports player. Consider that in 2020 the company’s Call of Duty franchise had 100 million monthly active players and the company had 400 million global players for all of its titles.
Huya, Inc. (NYSE: HUYA)
A slightly different esports play is the video streaming platform Huya. The company is based in China and says that it’s the No. 1 video game platform in the country.
Gamers can sign up to stream themselves on the platform and viewers can tune in to watch their favorite gamers. Huya then takes a cut of those tips and also generates revenue by selling ads on the site.
The company also hosts its own esports tournaments and has even signed exclusive deals with video game streamers on its platform. Additionally, the company recently signed a $310 million five-year deal with TJ Sports, which is operated by Tencent, to have the media rights for streaming multiple League of Legends esports events.
Huya’s total sales jumped 30% in fiscal 2020, propelled by streaming revenue increasing 29% and advertising and other revenue spiking 51%. That solid growth was followed up by Huya Live achieving 75.5 million monthly active users at the end of the first quarter 2021.
Huya’s stock can be a bit volatile so investors should keep a close eye on what this company is doing in the esports streaming market. But with the video game industry exploding in China and esports growing in the country, investors should keep this stock on their radar.
Sea Limited (NYSE: SE)
Like some of the other companies on this list, Sea Limited has its fingers in more than just the esports pot. The company comprises three main segments, including its Shopee e-commerce platform, its AirPay digital payments platform, and its game publisher, Garena.
Garena has been a massive success for the company because of its popular battle royale title
Free Fire. The game is extremely popular in Latin America and Southeast Asia and the title helped Sea Limited’s digital entertainment sales spike 78% in 2020.
The game has also boosted the company’s total paying users by 124% to nearly 80 million in the first three months of 2021. Sea’s management said recently that its digital entertainment growth “was driven by the increase of our active user base and deepen [sic] paying-user penetration as we continue to engage the community through new content and partnerships rollout and esports events.”
While Sea isn’t an esports pure-play, investors will be pleased to know that its share price has had one heck of a run over the past three years as it outpaced the S&P 500 by more than 23X!
Corsair Gaming (Nasdaq: CRSR)
In any industry, there are a lot of companies that don’t get as much attention as the bigger players, but still play a very important role. In esports, that company is Corsair Gaming.
This gaming company develops and manufactures high-quality hardware for gamers—everything from PC components and peripherals to lighting—creating a vast ecosystem of products that play an integral part of the esports community.
The company’s sales jumped 55% in 2020 and gross profit skyrocketed 108%, thanks to growing sales across all of the company’s key revenue segments.
With the company’s hardware—and its sponsorship of esports teams—Corsair is helping esports amateurs and professionals enhance their gaming experience. And with the company’s stock more than 4X the broader market’s gains since it went public in September 2020, it’s also helping esports investors win solid returns.
Esports ETFs: Buy a Basket of Esports Companies All at Once
If you don’t feel comfortable sifting through the stock market to find a few esports companies to invest in, then buying an exchange-traded fund (ETF) may be a better bet. ETFs give you exposure to a specific market or index without you having to buy shares in individual companies.
Three of the top esports ETFs are the VanEck Vectors Gaming ETF (Nasdaq: BJK), Roundhill BITKRAFT Esports & Digital Entertainment ETF (NYSE: NERD), and the Global X Video Games & Esports ETF (Nasdaq: HERO).
Frequently Asked Questions
Can you buy stock in esports?
Yes! There are many companies that have direct and indirect exposure to the esports industry. All of the esports companies on this list are publicly traded. They include Electronic Arts, Take-Two Interactive Software, Tencent Holdings, Activision Blizzard, Huya, Inc., Sea Limited, and Corsair Gaming.
What are the best gaming stocks?
There are lots of gaming stocks that have performed well, but two of the best esports stocks on this list are Sea Limited and Take-Two Interactive Software. Sea’s share price has gained more than 1,600% over the past five years, while Take-Two is up more than 320%.