The growth of Esports has been described as unstoppable. Competitive gaming has cemented itself in pop culture and with Global investors, brands and media outlets. The world is now paying attention to this annual viewership industry of over 500m in 2020. By 2023, this Audience is expected to double over a six-year period from its 335 million viewers in 2013! Most projections of the Esports industry put it on track to become a billion dollar revenue industry for the first time this year. When an industry rises so fast you will also see a massive betting industry grow around it.
You can see why powerful investors including Sports People are interested in investing in Esports. Power Players from Michael Jordan to Stephen Curry are all jumping on the bandwagon to invest in this exploding industry.
Jordan who is considered by most sports fans to be the greatest Basketball player in history, with a net worth of almost $2 billion joined his former Olympic teammate as a co-owner of aXiomatic. aXiomatic, is the Parent of Team Liquid. This consortium raised $26 million in Series B investment to take this world renowned Esports team founded in 2002 to the next level. Team Liquid won a franchise spot in the North American League of Legends Championship which requires them to pay $10m over the span of the next few years for their place. However, the current prize money on offer is $1m for the winner with insane return on investment from other revenue streams and competitions for the investors. For example, Team Liquid won the DOTA 2 championships in 2018, which netted the team $11m.
Another Major Star to invest in Esports is Stephen Curry. The Golden State Warrior, Curry has invested in ESM as part of an investment group that provided $37 million to TSM Organisation and its founder, Andy Dinh. Other investors into TSM include, Yahoo co founder Jerry Yang is via Bessemer Venture Partners, San Francisco 49ers former quarterback Steve Young and Curry’s Golden State Warriors teammate Andre Iguodala. Curry who is on a $201m contract is an avid investor with stakes in Pinterest, Slyce, Brandless and CoachUp.
National Basketball Association (NBA) star Kevin Durant and National Football League (NFL) Star Odell Beckham Jr took a stake in investment vehicle, Vision Esports.
Vision Esports is a special purpose investment vehicle (SPV) established by Vision Venture Partners which was founded by Rick Fox, Amit Raizada and Stratton Sclavos. This Investment vehicle has a mandate to invest into Echo Fox, Twin Galaxies, and Vision Entertainment with the goal of Vision Esports becoming the largest shareholder in each of the respective companies.
When we speak about Sporting heavyweights. What is an investment niche without the legendary baller and businessman Shaquel O’Neal.
Shaq’s investment is a clear sign that Esports are accelerating their mainstream momentum in the Sporting World. Shaq has invested in NRG esports with Alex Rodriguez and MLB star Jimmy Rollins. NRG competes in League of Legends Competitions. Over 400m viewers per annum view the LoL championships. Hours of content is consumed on Twitch and other platforms. Shaq and the other investors expect to make a return on their money with competition prize money, apparel sales and other media deals.
But Why are these Stars investing in Esports now?
Esports in the upcoming year should see esports grow to over $1 billion in revenue, a growth of 40%+ from 2019 and an increase from $325 million only 5 years ago. Companies like Twitch which was acquired by Amazon in 2014 for $970 million and Youtube are making Big Investments into the media consumption of this space and Major Sporting Organisations like the NBA are announcing Virtual Leagues. The NBA announced that seventeen of its teams are taking part in the NBA 2k League which is an esports league.
All of these signals show that this is an industry to take seriously. The Belief is that Esports will rival traditional Sports in terms of Advertising , Ticket Sales, Sponsorships and Merchandising. Esports Events have record attendance in excess of that of the Super Bowl!
Sports stars understand the value of these revenue streams more intimately than most. Which is why at PledgeSports we feel like Sports Star investors have gotten onboard early. If you want to read more about the rise of Esports check out our beginners guide here.