The sports industry is at risk of disruption, and you may not even realize it.
Not all sports are dying out. But many traditional sports are quickly being displaced by something completely different: esports.
Esports are multiplayer video games that are played competitively, often in an organized or tournament-like setting.
Once a foreign concept, esports have blossomed into their own industry.
Esports Have High Potential for Growth
In 2021, esports attracted the second-highest viewer count by sport in the U.S,, behind only the NFL.
Esports are even more popular on a global scale.
Since 2014, the number of esports viewers has grown 163% to a forecasted 495 million this year. This growth is expected to continue over the coming years.
(Source: Business of Apps.)
The smart money has been buying into this trend.
The high potential for growth enticed Amazon to purchase the video game streaming platform Twitch for $970 million in 2014. At that time, it was Amazon’s largest acquisition ever.
Since then Twitch has seen its monthly active user base surge from 55 million to 140 million.
User engagement has also skyrocketed, and last year its viewers watched a mind-boggling 18.6 billion hours of content.
With the number of video gamers expected to surpass 3 billion globally in 2023, esports viewership still has a lot of growth ahead.
The Esports Industry Is Still in Its Early Stages
Video games are becoming embedded in our culture, which means this trend will likely be permanent.
As younger generations emerge, esports will account for a significant part of the global sports revenues in the New American Economy.
At just $1.1 billion in 2021, the esports market is only 0.25% of the global sports market. As businesses monetize the vast esports viewer base, this number should climb rapidly.
Development of the esports industry is still in its early stages. This means investors that buy the right stocks have the chance to make massive gains in the years to come.
Investors looking to gain exposure to this industry can buy the Global X Video Games & Esports ETF (Nasdaq: HERO).
This ETF invests in global video game producers, as well as gaming hardware and streaming companies.
Research Analyst, Automatic Fortunes