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Esports to Grow 38% in 2018: Should You Buy Video Game Stocks?
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Market research firm NewZoo just released a comprehensive esports report that projects the budding industry will expand into a $905.6 million business in 2018. This means not only big money for the slew of new professional gamers, but also another solid revenue source for gaming industry giants Electronic Arts (EA - Free Report) , Take-Two Interactive (TTWO - Free Report) , and Activision Blizzard .
Esports Growth
NewZoo’s latest esports market report predicts that the professional video gaming economy will surge 38% this year, spurred mostly by major investments from brands—many of which are not endemic to the industry. Companies are set to spend nearly $700 million on advertising, sponsorships, and media rights this year.
Esports fans are expected to shell out nearly $100 million on tickets and merchandise, while game publishers will invest $116 million. By 2020, NewZoo projects the industry will be worth $1.4 billion, with its optimistic upside pegged at $2.4 billion.
North America, Western Europe, and the Asia-Pacific region are expected to remain the largest esports markets. Esports are estimated to reach 215 million viewers this year, and 307 million by 2021.
Professional teams and leagues currently exist all around the world, and now, leagues that mimic the format of major North American professional sports are popping up in the U.S.
The NBA recently partnered with Take-Two to form a new NBA 2K league, while Major League Soccer will help fund teams for a worldwide FIFA tournament leading up to the World Cup.
HP (HP - Free Report) , Intel (INTC - Free Report) , Toyota (TM - Free Report) , and T-Mobile (TMUS - Free Report) all sponsor Activision Blizzard’s new “Overwatch League,” which features owners from other professional sports, including New England Patriots owner Robert Kraft.
Buy Video Gaming Stocks?
EA, which is currently a Zacks Ranks #3 (Hold), is expected to see it bottom-line skyrocket over 61% this quarter, based our current Zacks Consensus Estimates. The sports gaming giant is also projected to see its EPS figure expand at a solid annualized rate of 15% over the next three to five years.
Activision Blizzard is also a Zacks Ranks #3 (Hold) and is expected to see its sales climb 11.48% to hit $1.33 billion in the current quarter, with full fiscal 2018 revenues expected to reach $7.55 billion. The gaming power is also projected to see its bottom line grow at an annualized rate of 14.61% over the next three to five years.
Take-Two is projected to see its earnings soar 27% in fiscal 2018 and a whopping 57% the following year. The company, which is currently a Zacks Ranks #3 (Hold), is also expected to see its revenues hit $2.94 billion in 2019, which would mark 46.65% year-over-year growth from our current 2018 projection.
Bottom Line
With investments from major public companies and professional sports leagues, along with its growing fan base, it seems clear that esports are here to stay. And now might not be a bad time to get into the action by investing in the companies that make all of this possible.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Esports to Grow 38% in 2018: Should You Buy Video Game Stocks?
Market research firm NewZoo just released a comprehensive esports report that projects the budding industry will expand into a $905.6 million business in 2018. This means not only big money for the slew of new professional gamers, but also another solid revenue source for gaming industry giants Electronic Arts (EA - Free Report) , Take-Two Interactive (TTWO - Free Report) , and Activision Blizzard .
Esports Growth
NewZoo’s latest esports market report predicts that the professional video gaming economy will surge 38% this year, spurred mostly by major investments from brands—many of which are not endemic to the industry. Companies are set to spend nearly $700 million on advertising, sponsorships, and media rights this year.
Esports fans are expected to shell out nearly $100 million on tickets and merchandise, while game publishers will invest $116 million. By 2020, NewZoo projects the industry will be worth $1.4 billion, with its optimistic upside pegged at $2.4 billion.
North America, Western Europe, and the Asia-Pacific region are expected to remain the largest esports markets. Esports are estimated to reach 215 million viewers this year, and 307 million by 2021.
Professional teams and leagues currently exist all around the world, and now, leagues that mimic the format of major North American professional sports are popping up in the U.S.
The NBA recently partnered with Take-Two to form a new NBA 2K league, while Major League Soccer will help fund teams for a worldwide FIFA tournament leading up to the World Cup.
HP (HP - Free Report) , Intel (INTC - Free Report) , Toyota (TM - Free Report) , and T-Mobile (TMUS - Free Report) all sponsor Activision Blizzard’s new “Overwatch League,” which features owners from other professional sports, including New England Patriots owner Robert Kraft.
Buy Video Gaming Stocks?
EA, which is currently a Zacks Ranks #3 (Hold), is expected to see it bottom-line skyrocket over 61% this quarter, based our current Zacks Consensus Estimates. The sports gaming giant is also projected to see its EPS figure expand at a solid annualized rate of 15% over the next three to five years.
Activision Blizzard is also a Zacks Ranks #3 (Hold) and is expected to see its sales climb 11.48% to hit $1.33 billion in the current quarter, with full fiscal 2018 revenues expected to reach $7.55 billion. The gaming power is also projected to see its bottom line grow at an annualized rate of 14.61% over the next three to five years.
Take-Two is projected to see its earnings soar 27% in fiscal 2018 and a whopping 57% the following year. The company, which is currently a Zacks Ranks #3 (Hold), is also expected to see its revenues hit $2.94 billion in 2019, which would mark 46.65% year-over-year growth from our current 2018 projection.
Bottom Line
With investments from major public companies and professional sports leagues, along with its growing fan base, it seems clear that esports are here to stay. And now might not be a bad time to get into the action by investing in the companies that make all of this possible.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>