The Rise of eSports May 12, 2021

The Rise of eSports

At a glance:

  • eSports has become a mainstream industry that is set to grow to US$1.5bn by 2023
  • You can gain exposure through gaming ETFs
  • Gaming ETFs invest in companies that develop or publish video games, distribute video games or Esports content, own and operate competitive Esports leagues or produce the hardware and software used.

eSports or electronic sports are video games played by professional gamers in teams or individually, usually for cash prizes.

eSports has burst into the mainstream in recent years. From being a subset of sports culture, it has grown into a full-fledged industry. Total eSports viewership is expected to grow at a 9% CAGR between 2019 and 2023, from 454m to 646m, according to Insider Intelligence. This is expected to propel the eSports market to US$1.5bn by 2023.

The shift has been powered by celebrities such as Michael Jordan and increased coverage from traditional media such as ESPN.


There are various genres of Esports tournaments:

  • Multiplayer Online Battle Arena (MOBA) games such as League of Legends (LOL) or Dota 2.
    Undeniably the largest esports scene falls under MOBA. Players in teams, usually, fight out across a fixed map with lanes. Through a third person or bird’s eye view, movement is directed through clicks to take down enemy defences and eliminate their hub.
  • Fighting games such as Tekken or Street Fighter

    Fighting games revolves around a fast-paced 1v1 action. Through imputing certain buttons and stringing combos, one may eliminate the opponent.
  • Sports such as FIFA or NBA2k

    Utilizing the same rules as the traditional sport to compete while controlling the different members of the team.
  • First-person shooters such as CS: Global Offensive or Call of Duty

    Consisting of dynamic gameplay, usually in teams, players carry firearms with their view positioned behind the sight of the weapon
  • Real-time strategy games like StarCraft

    Strategy games focus entirely on making calculated and well-timed decisions in order to better an opponent.
  • Card games like Hearthstone

In the recent One Esports Dota 2 Singapore Major 2021 hosted in Singapore, the prize pool was US$500,000 . To give you an idea of the popularity of such games, an average of 75,000 viewers tuned in to Twitch to watch the event. YouTube also broadcast it, drawing an average of 25,000 viewers. So altogether, some 100,000 viewers watched the event live. During the grand finals, about 590,134 were estimated to have watched, not inclusive of the mainland Chinese.

Broadcasting platforms

Twitch is a live streaming service that focuses on video games, including the broadcast of eSports competitions. It also offers music broadcasts, creative content and IRL streams.

As of 2020, 26.5 million visitors come to Twitch daily and 93 Billion minutes watched per month in average. It is undeniable that this marks a shift in viewership from traditional television broadcast to online live streaming services. Twitch is operated by Twitch Interactive, a subsidiary of Amazon (AMZN).

To tap the growing trend of online streaming and since Twitch isn’t listed, you may want to look at other online streaming platforms such as DouYu International Holdings (DOYU) and Bilibili Inc (BILI). You can also gain exposure to the sector through Amazon (AMZN), although Amazon has much more diversified businesses.


The backbone of any eSports is hardware.

Having good GPU and CPUs is essential for the games to run smoothly and for superb graphics. As every second counts in online competitions, the slightest delay may cause defeat.

GPUs are processors made up of many specialised cores that together, deliver massive performances. GPUs specialise in graphics and visuals, apart from handling a growing range of applications.

CPUs are the brain of computers. They execute commands for the computers to operate. They also determine how fast programmes run.

To ensure one’s GPU and CPU are in optimum shape to run games, gamers are recommended to upgrade their gaming PCs every 2-3 years.

Companies such as Nvidia (NVDA), Advanced Micro Devices (AMD) and Intel (INTC) are chipmakers that provide the gaming essentials every gamer needs.

Other than the chipmakers, gaming peripherals such as keyboard, mouse and headsets are also important. Razer Inc. (1337.HK), Logitech (LOGI) and Microsoft (MSFT) are some of the peripheral providers most sought after by gamers.

Gaming ETFs?

Yes, you’re not mistaken.

There is such a thing as gaming ETFs.

These ETFs own stocks in companies that either develop or publish video games, distribute video games or eSports content, own and operate competitive eSports leagues or produce hardware and software used in video games and eSports.

If you’re one of those who believe in the future of eSports, ETFs may just suit you.

VanEck Vectors Video Gaming and eSports ETF (ESPO)

Global X Video Games & Esports ETF (HERO)

Roundhill Sports Betting & iGaming ETF (BETZ)

VanEcks Vectors Gaming ETF (BJK)

Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD)

The Rise of eSportsAssets and average volumes as of 7 April 2021 16:23 EDT


Prices are in USD


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About the author

Liew Zhen Shen Johnson
Equities Specialist

Johnson holds a bachelor's degree of Science in Business Administration and a bachelor's degree of Arts in Economics. He employs fundamental and technical analyses with experience in a multitude of financial instruments. He joined Phillip Securities in 2020 as an Equity Dealer. Apart from providing dealing services, he also conducts training seminars to further introduce financial knowledge to the public.

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