Top 5 Best eSports Stocks to Watch in 2024
Sports have always been lucrative for those involved, and with the rise of eSports, these potentially best eSports stocks have become more diversified - and generally more popular.
Stocks in companies with a stake in these competitive video games could be an interesting new investment sector to follow, due to the high viewership many of these events draw in and hence growth in advertisers' interest and overall revenue.
If you want to learn more about the list of our (subjectively) best eSports stocks to watch along with both the advantages and disadvantages, keep reading for more insight.
Table of Contents
What are eSports Stocks?
eSports stocks are stocks in companies that have some relation to the competitive video game industry.
Some of these stocks will be for companies that develop games popular in the eSports industry, such as the Activision Blizzard Group (ATVI) and Take-Two Interactive Software (TTWO).
Other stocks will be for game platforms that host popular eSports games, such as Skillz (SKLZ), or streaming services, such as HUYA (HUYA).
Should I Buy eSports Stocks?
Stocks in eSports may be an interesting investment opportunity for an investor who finds new industry stock trends appealing, especially those with previous experience in the sports and video game verticals.
Financial interest in eSports and general video games has grown exponentially since they first gained popularity.
Major companies, such as Microsoft, have entered the eSports and gaming fields. Microsoft famously entered talks to acquire Activision Blizzard for nearly $70 billion, while Facebook has invested over $10 billion into its VR devices.
With their rising popularity, eSports stocks may be worth investigating further in order to determine if they are the right fit for an individual's portfolio.
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What Are The Best eSports Stocks to Watch?
Discover some of the potentially best esports stocks currently available on the global markets.
1. Skillz (SKLZ)
Skillz, listed on the New York Stock Exchange as ‘SKLZ,’ is a competitive platform for mobile games.
Developers may integrate Skillz into their games, allowing players to compete with others around the world.
In 2021 Q3, Skillz reported a 70% growth from 2020 with a $102 million revenue. The team behind Skillz is also widely-lauded, often being ranked as some of the biggest innovators in gaming.
Advantages:
- Skillz is an innovative company with a competent staff who can guide it into the future of competitive mobile gaming.
- Skillz has a good record of revenue growth, reporting 23 consecutive quarters of growth.
Disadvantages:
- The mobile gaming industry is about to face serious issues, with the environment looking to take a downturn with rising energy costs.
- Skillz faces high rates of competition in its mobile field, with other competitors poised to become major players.
- Expenses have skyrocketed, potentially spelling out a disastrous financial future for Skillz.
2. Activision Blizzard Group (ATVI)
The Activision Blizzard Group, listed on the New York Stock Exchange as ‘ATVI,’ is one of the most significant names in the gaming industry, boasting a roster of iconic video games such as Call of Duty and World of Warcraft.
Activision Blizzard’s main eSports exports are Overwatch and Call of Duty, two of the most popular eSports series in the world.
Advantages:
- Activision Blizzard is a leading gaming company with a notoriously popular catalogue of games, offering some level of stability.
- In the first half of 2022, shares grew 17% due to its anticipated acquisition by Microsoft – although no purchase has occurred as of yet.
Disadvantages:
- The Activision Blizzard Group has a history of controversial PR, with major sexual harassment cases tanking their stock value for extended periods.
- CEO Bobby Kotick is a controversial figure, notable for potentially questionable working conditions. Many statements by Kotick provoked a backlash among fans, resulting in a downward turn for ATVI stocks.
Follow the Daily movements of the ATVI stock based on the below TradingView chart:
3. HUYA Inc (HUYA)
HUYA Inc, listed on the New York Stock Exchange as ‘HUYA,’ is a video game streaming platform operating out of the People’s Republic of China.
As a streaming platform, HUYA allows viewers to watch streamers play their favourite games, whether it be casual or competitive eSports play.
Advantages:
- HUYA reported yearly revenue of over $10 billion in 2021.
- HUYA has many subsidiaries, giving it extra liquidity and stability to make up for any financial issues in one department.
Disadvantages:
- HUYA’s stock has reduced to nearly one-quarter of its prior value over a year and started Q3 2022 just over its lowest stock price ever.
- HUYA is something of a high-risk stock. The Chinese eSports market is growing, but HUYA faces high rates of competition.
4. Take-Two Interactive Software Inc (TTWO)
Take-Two Interactive Software Inc, traded as TTWO, is known as one of the most diversified and beloved companies in gaming.
From famous single-player games such as Grand Theft Auto and Red Dead Redemption to eSports versions of real sports, such as NBA 2K and WWE 2K, Take-Two is an interesting prospect on our list of the best eSport stocks to watch.
Advantages:
- Take-Two Interactive excels at extending its games’ lifespan, meaning the company makes more money off of a single game.
- With multiple partnerships and subsidiaries, Take-Two boasts a roster of many famous games that can keep it afloat even outside of the typical eSports season.
Disadvantages:
- Some investors consider TTWO to be ‘in a bubble.’
- Take-Two has an overreliance on its Grand Theft Auto franchise, with the series contributing almost 40% of the company’s revenue in 2017.
5. Zynga Inc (ZNGA)
Zynga Inc, traded as ZNGA, is one of the foremost companies in the mobile gaming industry.
While many are not competitive games, Zynga has created many of the most popular mobile games ever.
Advantages:
- Zynga has a consistent audience among casual players, giving diversification of viewership from strictly the eSports audience and seasonal tournaments.
- Like its competitor, Skillz, Zynga can easily make a move into the streaming or competitive market given their background as a mobile gaming company.
Disadvantages:
- While it is still a leading company, Zynga faces much competition in the mobile market, as well as eSports respectively.
- Take-Two is in talks to acquire Zynga, making its future uncertain.
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How to Invest or Trade in eSports Stocks
When determining someone’s own personal objective which are the best eSports stocks to watch, one may also consider the approach to investing in them.
Naturally, there is no direct answer to this and it is simply always subjective; each person’s investment or trading strategy is different, as well as their goals.
Depending if the individual is looking to trade for the short-term, for fast gains, or looking to invest for the long-term, for gradual gains over time, will reflect which strategy they will follow.
Risk management should always be considered before making any concrete decisions on stocks to trade or invest in.
At Admiral Markets, our clients have the option to trade Contracts for Difference (CFDs) on various instruments via our Trade.MT5 account. We also have the option of investing directly in stocks and ETFs via our Invest.MT5 account.
What are eSports Stocks? Conclusion
The eSports industry, overall, has drawn attention to many headlines over the past few years. Given the shift in generations, with many of the eSports fans now becoming of legal age, this could contribute to the progress of the industry overall, from a sports betting perspective.
As there is simply never a way to predict the future performance of stocks, this list of best eSports stocks to watch is completely subjective to the author and must not be considered investment advice. Please always exercise risk management in all of your trading and investment activity.
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Which are the best eSport stocks?
While this answer is always subjective, it can be said that some of the best eSports stocks include Activision Blizzard Group (ATVI), Take-Two Interactive Software (TTWO) and Skillz (SKLZ), among others.
Should I invest in eSport stocks?
Also a very subjective question, it is completely dependent on your risk tolerance, goal time frames, trading/investing knowledge and experience. For investors or traders familiar with the tech and gaming verticals, eSport stocks could be a good option, as well as if the trader or investor has a high-risk tolerance. New verticals are generally prone to more risk and volatility.
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