It's All Fun and Games (and Profit)

Written by Ryan Stancil
Posted May 23, 2020

There’s no market quite like a captive market. 

That’s something the video game industry has learned well over the past few months. People are stuck indoors. There are only so many times one can stream reruns of The Office before wanting something else to distract them. 

So, over the past few months, when Americans weren’t on social media, sleeping, or baking (if they could find yeast), they’ve been gaming. 

Since the release of Pong in 1972, video games have spawned a massive industry that enjoyed ongoing success for most of its life. 

What started as something passed around by programmers has since become a global industry worth somewhere in the area of $150 billion. 

Even if you don’t play any video games yourself, you likely know someone who does. They may do so on their smartphone, with a home console, or on their computer. Whatever the case, they’re part of a massive industry that’s only going to grow. 

A Changing Landscape

It used to be that video games were written off as children’s toys, but the numbers don’t lie. For years, video games have been enjoyed by a large number of adults in addition to those under the age of 18. 

That means more money is being pumped into the hobby. Gaming companies have known this for a while and responded with newer, more advanced releases and accessories. But it’s a reality that’s only recently being noticed by others.  

In the past few years, more attention has been paid to eSports in particular. 

If that’s something you aren’t familiar with, you will be soon. 

Essentially, eSports is competitive gaming. Teams of players get together and go up against each other in different video game titles just like you would see in traditional sports. That sort of thing used to be limited to casual get-togethers and off-the-cuff online matches. But it’s since morphed into a billion-dollar industry poised to pass other types of entertainment. 

As you no doubt know, traditional sports have been crippled by the pandemic. Likewise, television and movie production has largely ground to a halt as these industries have shut down. Concerts have been canceled and festivals are sure to be close behind if it hasn’t happened already. That leaves people with few options to keep themselves entertained as we enter the summer months. 

The video game industry has certainly been impacted by the changes society has made. At the same time, it’s also poised to adjust better than the other industries I just mentioned. Game developers are still able to work remotely, so title delays are not as severe. Likewise, game-centric events have simply moved online. 

That’s led to video game streaming and eSports acting as go-to entertainment options for a growing number of people. Viewers are largely turning to websites like Twitch and YouTube to watch events. Ad companies have noticed and are beginning to throw their dollars at these platforms and others to get in front of a growing audience. 

Like any form of entertainment, eSports has its celebrities. Among regular watchers, certain players and teams have become household names. The players and teams enjoy regular, devoted audiences on their livestreams, and even have branded merchandise. Much like you can buy a jersey for your favorite basketball or football team, you can buy a shirt with the logo of an eSports team. 

Outside companies are noticing this, too. 

Top eSports athletes and streamers are being chased by advertisers for sponsorships. They’re commanding millions to provide access to the growing number of people tuning in to watch eSports all over the world. 

It’s a new, untapped market for a new, thriving form of entertainment. 

And unlike other forms of entertainment, there are ways for the average person to access and profit from it as well. 

The Prize Money

It’s said the eSports industry will bring in around $1 billion this year. That comes from an audience of around 495 million people, with almost half of that number being made up of people who watch regularly. 

Some of that revenue will be from things like ticket sales and merchandise. But the majority will come from sponsorships and media rights. 

It’s the game publishers that stand to benefit more than most from this growing market, though. More people are buying a variety of titles put out by game publishing companies. At the same time, some of these companies are also involved in the eSports scene. 

They hold all of the keys to an industry that’s only going to grow in the next few years. It will fill entertainment gaps left behind by crippled industries like professional sports and movies. 

You can’t invest in those industries directly, but you can invest in video games

And now is the best time to do that, while the video game industry is one of the few enjoying any kind of growth. 

Jimmy Mengel’s latest report has all the details about how you can grab part of the profits today. 

Don’t miss your chance to get in on the next great growth industry.

Keep your eyes open,

Ryan Stancil
Contributing Editor, Outsider Club

Ryan is an associate editor and regular contributor to Outsider Club. Since 2014, his articles have offered commentary on technology and geopolitics to help readers make sense of the constantly changing landscape and how it affects their investments.

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