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eSports Versus Traditional Sports, U.S. Versus China – Let the Games Begin

POINT ROBERTS, Wash., Feb. 11, 2019 (GLOBE NEWSWIRE) -- Investorideas.com, a leading investor news resource covering gaming and eSports stocks issues a special edition of Play by Play looking at the explosive growth of the sector and how battles are playing out; eSports versus traditional sports and the U.S. versus China bid for leadership.

Total eSports revenues reached US $869 million in 2018 and are expected to surpass US$6 billion by 2028, according to Fact.MR.

NewZoo estimated the global eSports audience at 380 million for 2018, made up of 165 million Esports enthusiasts and 215 million occasional viewers. Meanwhile, Activate projects that by 2021 eSports will have more US viewers than all other professional sports leagues, with the exception of the NFL.

With all this money and viewership at stake, you can expect the big boys to enter the playing field; and yes they certainly have.  On July 2018, ESPN, Disney XD and Blizzard Entertainment, a division of Activision Blizzard (Nasdaq: ATVI), announced an exclusive multiyear agreement for live television coverage of the Overwatch League™, the world’s first major global city-based eSports league.

Seeing the future shift in sports and eSports, Robert Kraft of the New England Patriots, Jeff Wilpon of the New York Mets and the LA Rams’ Stan Kroenke invested heavily into their own franchises within Activision Blizzard’s Overwatch eSports league.

Overwatch franchise valuations are $60 million to $80 million, depending on country and city according to a Forbes article. Adding to its value, news hit on Friday that Coca-Cola signed a deal with Activision Blizzard Esports Leagues to become the official non-alcoholic beverage of Overwatch League and all other Overwatch properties. 

With North America as the largest eSports market in 2018, Enthusiast Gaming (TSXV: EGLX.V) (OTCQB: EGHIF), a gaming company building the world’s largest community of authentic gamers.  strategically announced yesterday that it opened a US-based office and hired a sales team to drive advertising sales and increase annual revenue.

According to the news, “The US-based sales team is based in San Francisco and will be responsible for leading North American sales. This expands the company’s current reach with a sales team in San Francisco, London, UK, and the corporate head office in Toronto. The company kicked off the opening of the sales office with a West Coast advertising roadshow, meeting with top gaming publishers, global brands, and media agencies.”

Undaunted by the fact that they are a smaller company, Enthusiast Gaming is building their network and has positioned themselves at the forefront of the market, led by Menashe Kestenbaum, Founder and CEO. The numbers speak for themselves, with a platform of more than 80 owned and affiliated websites reaching 75 million monthly visitors and 900 YouTube channels with an additional 50 million monthly visitors.

Other major deal flow in the US; Take-Two Interactive Software’s deal with the NBA and Electronic Arts Inc.’s partnerships with the NFL and ESPN. The massive streaming player growth on YouTube and Amazon is yet another indication this industry is not going away anytime soon. 

The China eSports market is second to the United States and according to Dragon Social: “Live streaming, combined with video games has become one of the most popular forms of entertainment for people in China.”

China-based Tencent Holdings Ltd (OTCMKTS: TCEHY) (0700.HK) is the biggest gaming company in the world, spending $150 million a year to maintain that dominance. Bloomberg noted, “Along with Activision Blizzard Inc., Tencent’s become one of the most aggressive promoters of pro-gaming. It’s hard to overstate the mania that’s gripped China in particular: at least 10,000 teams exist across the country despite just 12 spots in this year’s marquee King Pro League tournament.”

Streaming video player Huya (NYSE: HUYA) provides a live-streaming platform for gamers to share their experiences and has been dubbed, the ‘Twitch of China’ and says they are the largest in China. Reporting on its NYSE IPO, Forbes said, “HUYA is known for its sticky gaming community who engage in interactive social media features such as gifting and adding commentary during online streaming sessions.”

US company Twitch is a live streaming video platform bought by Amazon in 2014 for $970 million. Twitch viewers between Wednesday, 30th January and Tuesday, 5th February: lowest viewers 625,376 (Monday, 4th 09:00) and peak viewers 2,240,001 (Saturday, 2nd 19:00). 

It’s game on for the US versus China and eSports versus traditional sports. Let the games begin.

For investors following gaming & eSports stocks, Investor Ideas has created a directory of gaming stocks.

Read previous editions of Play by Play

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