Marc Cuniberti: E-sports not a child’s game
One of the fastest growing sports in the nation is video gaming.
Called E-sports, some might debate whether it’s really a sport at all, but what is not in debate is the explosive attendance both by players and spectators. E-sports is competition between players where they play a virtual game of some sort on TV screens and monitors where you can play with friends in the same room or compete with someone in another country via electronic connection. Think internet of course.
Although E-sports runs the gamut from car racing to all the real sports like soccer and basketball, the war type games are the most lucrative. And when I say lucrative, I mean to both the companies that make the games to the players that play it.
E-sports is fast gaining in overall revenue on the real things. Not the cost of waging war, mind you, but in revenue generated against real sports. The MLB (professional baseball) generated in excess of 10 billion in 2017, with the NFL garnering 13 billion, and although revenue last year from E-sports was a paltry 850 million industry, it is projected to explode to 1.5 billion next year. Given all the other sports in the real world attracting the public’s money, it’s not a far stretch to envision E-sports in the multi-billions in 2020 or beyond.
Just last month, one of the most newsworthy competitions were held in a popular game platform called Fortnite, a shooting type game where up to 100 players all battle in various landscapes where the last man standing wins. The grand prize for the player who wins “Fortnite World Cup?”
A cool 3 million. It doesn’t stop there. Fourth place will take home over a mil and every “finalist” earns 50 grand.
Next month Shanghai will host another similar competition called “Dota 2”. What is the total prize money tossed in pot and up for grabs?
As money pours into the industry, the companies that make and support such things will also grow. Already rife with video gaming companies, developers and other supporting cast members, Wall Street seldom sleeps on huge conduits of money opening up, and the list of publicly traded companies only continues to grow. There is even baskets of E-sport companies offered up for investors not willing to take a change on only one company.
But don’t just hit your stock controller button to buy any and all video gaming stocks just yet. With oodles of money don’t necessarily come oodles of profits. As in all potentially explosive investing places to play with your money, they’ll likely be big time winners and others that will blow up just like the ongoing explosions in their games.
Video stocks can be volatile and just Google up the last 12 months price action to sober up your enthusiasm. As in all investments, it best to consult a qualified financial professional before making any investment decisions and order up the prospectus on any security you are considering.
Remember, although E-sports is all about playing, when it comes to investing your hard-earned money, playing around is the last thing you should do. This is not a recommendation to buy or sell any securities.
This article expresses the opinions of Marc Cuniberti and are opinions only and should not be construed or acted upon as individual investment advice. Mr. Cuniberti is an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Marc can be contacted at SMC Wealth Management, 164 Maple St #1, Auburn, CA 95603 530-559-1214. SMC and Cambridge are not affiliated. His website is http://www.moneymanagementradio.com. California Insurance License # OL34249.
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