The COVID-19 pandemic last year put a break on organizations hosting live e-sports events as social distancing was put into effect. E-sports organizers had to rapidly adjust their business model to the need of the times and shift to an online infrastructure. This move was welcomed by viewers as they tuned into live streaming of games and e-sports in massive numbers as the pandemic clamped down on movie theaters, restaurants and other forms of entertainment, compelling them to resort to at-home entertainment.
In fact, Amazon.com Inc.’s
AMZN
Twitch streaming service witnessed a huge jump in viewership, thanks largely to the COVID-19 restrictions. Notably, in 2020, viewers watched more than 1 trillion minutes combined on Twitch, nearly doubling from the 660 billion minutes of content watched in 2019, as quoted in a
Screen Rant article
. Even though COVID-19 vaccines are becoming available globally and might eventually lead to easing of travel and gathering restrictions, the demand for live streaming may stay beyond the pandemic and drive growth of the e-sports market further.
Notably, global games and e-sports analytics provider Newzoo estimated that the industry revenues are set to reach $1.084 billion in 2021, rising 14% from 2020, owing to additional growth in media rights and the livestreaming market, as quoted in a
Reuters article
. In fact, the article stated that the e-sports industry is set to make $833.6 million this year, accounting for more than 75% of its revenues, from media rights and sponsorships owing to the surge in the live streaming audience. Notably, the number of global live streaming audience is set to reach 728.8 million by the end of 2021, up 10% from 662.6 million in 2020, and reach 920.3 million by 2024.
Moreover, the rising penetration of smart phones around the world is providing e-sports a leg up. This is because mobile gaming has been slowly gaining popularity, thanks to the many conveniences it provides. Notably, smart phones are portable, allowing users to engage in games anytime and anywhere per their convenience. Moreover, mobile games have adapted the free-to-play model, making them relatively cheaper than most PC or console games, allowing more users to participate. Reflective of this, the Reuters article mentioned that Newzoo predicted mobile gaming to indeed be another growth driver for the e-sports market.
4 Stocks to Keep an Eye On
The global e-sports market is likely to keep growing, thanks largely to the huge jump in the number of audiences tuning into live streaming. Moreover, the rising popularity of mobile gaming should provide another leg up to e-sports. Hence, this makes it a judicious time to keep a close eye on stocks that can benefit from this rising popularity of e-sports. Notably, we have selected four such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
NVIDIA Corporation
NVDA
operates as a visual computing company worldwide and its GeForce GPUs are used by professional e-sport gamers. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 15.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 33.7%.
Activision Blizzard, Inc.
ATVI
has been a major name in the e-sports market with ‘Overwatch’ being a successful title. Moreover, the company’s ‘Call of Duty Mobile’ held its e-sports championship last year. Activision Blizzard currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 4% over the past 60 days. The company’s expected earnings growth rate for the current year is 5.8%.
Amazon
engages in the retail sale of consumer products and subscriptions in North America and internationally and the company’s Twitch streaming service has emerged as one of the leading live streaming platforms for gamers worldwide. Amazon currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 10.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 18.2%.
Alphabet Inc.
GOOGL
provides online advertising services internationally. Notably, Google’s YouTube Gaming witnessed a massive surge in viewership in 2020 with 100 billion watch time hours while major e-sports tournaments were also viewed on YouTube. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 10.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 17.8%.
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