Growing up I wanted to be an NBA superstar. As a 90s kid, I would watch films of Larry Bird and Magic Johnson going bucket for bucket. In my opinion, the 1980s was the golden era of basketball. Larry Legend was my favourite. During the 80s, Larry was among, if not, the best.
He wasn’t the most athletic player. Instead, he used his head out on the court. Honing his skills, he could shoot from inside or outside using either his right or left hand. He was such a dominant force that teams had a sinking feeling in their stomachs when he pulled up to shoot the basketball.
But I don’t know if I would have had the same dream growing up in 2016. Instead, I might have been more attracted to a different kind of ‘sport’: eSports.
eSports, or electronic sports, is a form of competitive gaming. These aren’t games you play outside with your friends. They’re video games.
It sounds a strange to hear video games classified as a sport. But it has evolved from being played in basements to international stages. And it’s all thanks to the internet.
When I was younger, I could only play games with a person sitting beside me, usually my brother. Now you can play with anyone around the world. You can share new experiences with strangers that become friends. The power of connectivity has launched the gaming industry to ‘billion-dollar’ status.
And it’s become the norm to connect with other gamers online.
The online sphere is strong, where communities have formed. The eSports industry has built a community for competitive gamers to come together. Gamers who once battled virtually are now brought face to face.
Like a basketball or soccer game, pro gamers even play in huge arenas for hundreds of thousands to watch. And they can earn a pretty penny while doing it.
It’s one of the highest paying jobs that requires no degrees or schooling. Of course, that’s only if you’re good enough. Playing more videos games could be the best career decision your kids could ever make.
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The new career path
In March this year, more than 100,000 gamers gathered in Katowice, Poland. They were attending the 10th season of the Intel Extreme Masters Tournament. I know what you might be thinking — nerds at a convention.
But to get an idea of how serious these tournaments are, take a look at the picture below.
At its peak, 1.6 million viewers tuned in to watch the event.
Every producer and game developer is trying to make the next big online game. Their motivation is not only for revenue dollars, but to create an entire community or brand. Online games bring people together.
For many gamers, they can completely change their lives, even financially.
Sure, gamers might spend thousands of hours playing games and perfecting their skills. But no longer is their skill going unnoticed; the top players are living it up in their million-dollar homes.
Players in the tournaments also get their fair share of revenue dollars they pull in. It’s much like any other sport. These gamers are good enough to make other gamers want to see them play. Thus, more eyes looking at advertised and sponsored content.
The total awarded prize money for a game called Dota 2 was US$31 million in 2015. At the tournament held in the picture above, multiple players had the chance to walk away with US$500,000 or more in cash for multiple games.
For a few hours of work, gamers can walk away half a million dollars richer.
It might not be a bad idea to let your kids stay up late or procrastinate on homework to play their favourite game.
How to cash in without even playing games
According to Deloitte Global, eSports will generate global revenues of US$500 million in 2016. This is up 25% from about US$400 million in 2015. They also believe eSports will have a regular audience of close to 150 million.
In their 2016 eSports prediction article, Deloitte wrote:
‘The very idea that people may be willing to watch other people play competitive video games for big money prizes may surprise some.
‘Today, a major eSports event may attract 40,000 people watching live, and tens of millions watching over the Web. This could be interpreted as meaning that “eSports is bigger than basketball”. That may be true when measured by audience size for an individual event. However, there are far fewer major events for eSports than for traditional sports, which means that in dollar terms eSports is not yet playing in the big leagues.’
This might be laughable to some. Looking at the graph below, other sporting codes dominate eSports in revenue dollars.
Source: Forbes and Deloitte Global analysis
It’s true that eSports might not be among the big leagues yet. But, then again, it was non-existent just a few years ago. While the eSports industry has a long way to go, it’s aggressively expanding. Connectivity is what allowed competitive videos games to grow into international communities. And now it’s allowing people from all over the world to catch a glimpse of these athletes up close.
If you’re like me and your best gaming days are over, you probably won’t be winning hundreds of thousands of dollars in prize money. The next best thing could be investing in companies directly related to eSports.
eSports looks to be one of the fastest growing industries in the world. Right now could well be the best time to consider looking into companies standing to profit from the competitive gaming industry.
Junior Analyst, Money Morning
PS: Investing in eSports isn’t something you’d hear from your financial adviser. But there’s a lot of things you wouldn’t hear them say, other than to play it safe and put your money in a fund. It’s OK if you want to play it safe. But if you want to make potential returns of 400% or more, you’ve got to be willing to take on some risk and think outside the box.
This is exactly what tech guru Sam Volkering does in his advisory service, Revolutionary Tech Investor.
Three of Sam’s revolutionary recommendations have climbed 168.3%, 400.0%, and 493.5%. And he’s got plenty more yet to come. To find out how Sam does it, click here.