Are cybersports the future of investing?
Esports may be the next big thing in sports sponsoring. Global revenues could hit $1.1 billion in 2019. In the CNN analytical show, Carlos Mejia CIO of Rothschild & Co Wealth Management spoke about the money in cybersports. The Rothschild family is one of the first to have created a banking business and has been out on the field for more than 200 years. So, they should know shit about investing.
Scales of the cybersports industry
“At LCS Spring Finals in St. Louis, USA, 10,000 people bought tickets in minutes. 10 thousand people doesn’t look like a lot, does it? But when you find out that 600 thousand people watched the stream, only to see this event – you begin to think. The past League of Legends world championship was watched by 100 million people. This is a similar number to the Super Bowl audience. So, is it possible to make money? Yes, I think so.”
Is this a new trend?
No one can know for sure. Carlos answers that it’s really difficult to know for sure because nobody can see differences between a solid future and a soap bubble from the start. In the beginning only a few saw the potential in bitcoins and cannabis investments (in the US), so only time will show. But for now, the Rothschild CIO sees real numbers and real money in the cybersport industry. “For example, there are 390 thousand subscribers for a certain e-game on average, by the end of 2021 there will be 500 thousand. People subscribe to streaming as sports broadcasts.”
So how do you invest?
The easiest way is through stocks. The main question is how to do it right. Carlos takes, for example, the FIFA or League of Legends. You cannot invest in the game. If you want to buy a Pokémon, you need to buy Nintendo. If you want FIFA or NHL NFL, you need to buy EA, you want LoL, you need to buy Tencent.
Who is investing?
Nowadays most investors are from Asia and the US. In Europe, there are not many investors so far. Half of the investors are in Asia. There are two kinds of investors. The first is the people who play or stream and the second are companies who replicate index trackers and companies that are associated with this industry, for example, technology providers.
What about investment security?
Carlos Mejia says that it is a very volatile and young industry, but people must understand the difference between the eSports industry and the video game industry. The cyber sports industry has earned almost $ 900 million over the past year. It is expected that this figure will rise to $ 1.7 billion over the next couple of years. So there is a way to make money. But it’s not for everybody because companies in the esport industry can increase and decrease by 30-40%. In the short term, uncertainties are huge.
But on the other hand no guts, no glory, right?