There are many reasons why people decide to invest their money, but investing in gaming companies is becoming more popular every year.
It promises a good potential for significant profits, it makes it easier to outperform inflation, and there’s also an excellent opportunity to establish regular income. Finally, there are some convincing arguments why investors should be looking more closely into the gaming industry, and e-sport in particular.
The element of risk in an investing strategy, alongside potential returns, can vary a lot. Unsurprisingly, it depends mainly on what we are investing in. It is always profitable to support a promising startup or a revolutionary idea, but it’s not always a given. Such opportunities do not come often, and when they do, it’s usually with fierce competition among interested parties.
It is sensible to focus on putting resources into one of the most stable branches of the economy, the ones that create safer space for long-term investments. Those would be industries with high demand for their products or services, such as the food industry, energy utilities, water, healthcare, or technology.
Another idea is to bet on sectors where workers have the best job security: manufacturing, wholesale trade, public administration, finance, transportation.
A market that grows fast
With that said, there is no reason one should dismiss other viable opportunities. And investment in an ever-developing industry with a fast-growing market should be considered as such. It is a very stable sector of the economy that is expected to grow exponentially.
New technologies, automatization, and computer science’s constant advancement can sometimes be perceived as a threat to job security. For the gaming sector, new technological solutions are more like a driving force rather than an issue. Ever since Virtual Reality and Augmented Reality became a possibility in games, players only wanted to see more of that.
The numbers are there to support the positive trends, which is something investors always want to hear. The video game market size was valued at $151.06 billion globally in 2019. It is expected to have a Compound Annual Growth Rate of 12.9% from 2020 to 2027. It paints a nice, long-term picture. Innovations in both software and hardware should be an essential element propelling further expansions.
Many more factors will influence the number of customers and drive up sales. Among them are increasing possibilities in the real-time rendering of graphics, cross-platform gameplay, social media gaming, development of ‘gaming to learn’ concept, and much more.
All the favorable evaluations and predictions are good indicators, but we know games are here to stay even intuitionally. The diversity in this business reflects in a persistent determination for improvement.
Strategies, puzzles, and logic games help with working out our brains, as casino and card games require a lot of critical thinking and analysis. PokerNews portal and similar websites have numerous articles on what skills are needed to perform well at those sorts of games.
A quick look reveals that different games serve different purposes, and there will always be someone who can benefit from that and create more demand. Above all, however, the primary purpose here is still entertainment, and there is no danger that people will lose interest in having fun.
Mobile and digital
Some might be a little surprised, but the biggest part of the gaming industry is mobile. More than a half, to be precise. This segment will more likely continue the rise, with an estimated growth of 20% to $120 billion in 2021.
Many companies such as the most prominent gaming developers and studios (Ubisoft, Tencent) or reputable financial firms (Goldman Sachs) are making a considerable investment in the mobile department. Even governments started to set aside some funds to support local gaming businesses.
Digital distribution of video games has been a standard for a while. It doesn’t revolutionize the way people play video games, but it does represent the change in the rate of adoption and cost savings. It should continue to attract more people to obtain games from their own home and while on the move.
Following Netflix or Spotify’s success, the gaming industry could be the next frontier for the subscription-based model. We can observe its development right in front of us as more big players in the media business join in on the fun. The competition will surely drive the creation of creative and interesting content.
The rise of eSports
While the mobile gaming sector is a sure horse to bet on, the concept of eSports seems alluring, too. It represents a rare opportunity for gamers to reach global recognition, as it breeds professionals who are becoming celebrities and lots of fans worldwide.
It is no wonder that they attract support from larger institutions interested in promoting their brand in such a unique manner. Those trends are well understood by companies associated with traditional sports (NFL, NBA, ESPN), which are eagerly partnering with video game representatives and enterprises. There are, at least, a few things to assume about the eSport industry that could encourage a decision to invest some money in it.
1. The accessibility
eSports competitions are much more accessible than traditional sports. Many young and aspiring players dream about becoming the next soccer or hockey star. Only a fraction of them will even have the chance.
With easier physical access and lower participation cost, becoming an eSports legend seems like a real possibility. Some would argue that electronic sport will overshadow regular sport. Even if it’s not the case, there is still money to be made from it.
2. People are here to stay
Despite the opinion that competitive gaming is mainly for the young, the players don’t outgrow the industry. The entertainment sector does not really lose consumers with age. In fact, it attracts more and more users that will continue to increase its business value as a whole.
3. Relatively low risk
A strong and continuous need for evolution this industry repeatedly shows makes it a considerably low investment risk. The eSports sector never stands still because it can quickly adapt to new solutions and exciting fresh ideas.
All of this goes to show that investing in the gaming sector may prove profitable in the coming years and even decades. But it all comes down to picking the right stocks and following the gaming trends across the world.