For its part, online gaming and e-sports were more front and centre in 2019, with acquisitions, league franchises sponsorship, advertising transactions and media rights all catching investor attention and pushing up publicly disclosed investment in e-sports to $1.95 billion last year.
The same goes for online betting which is being fueled by the opening up of the US to online sports betting, said to be heading towards the biggest regulated betting market in the world, reaching $5.0 billion by 2023, where it stood at merely $200.0 million in 2017.
The synergies between the two sectors are clear, according to Echelon Wealth analysts Rob Goff and Gianluca Tucci, who said the US market will create opportunity for online sport-content providers including e-sports betting platforms, along with being a boon for traditional casino operators, tech companies, betting aggregators and online sports content providers.
For eSports in particular, the future looks bright, as the monetization of the growing audience worldwide is still in its infancy, according to Goff and Tucci.
“The industry is still under-monetized compared to its viewership numbers. In 2020, we expect owners of franchised leagues (some that also own traditional sports franchises) to move aggressively in monetizing their regional teams through media rights deals, licensing, sponsorship/advertising, merchandising, concession, events, ticket sales etc,” the analysts wrote.
“It is fully expected that league structures, formats, and economics will continue to be publicly debated, will evolve and will see miss-steps. Still, publishers are somewhat self-regulated by their leverage to audience growth where healthy league and team development are a core factor. Increased competitive intensity among streaming platforms also stands as a core element in our bullish thesis,” they wrote.
One of the beneficiaries of the trend is Toronto-based mobile sports app company Score Media and Gaming (which is a Top Pick for the first quarter of 2020, according to Goff, who says the company’s initial launch into the New Jersey sports market last year showcased Score’s ability to utilize its app user base as well as its technological prowess for successfully introducing a new integrated product to the marketplace.
“We remain bullish that SCR will leverage the strength of its legacy app user base to gain an attractive share of the emerging sports betting market,” Goff wrote in a January 24 update to clients.
Score had a great 2019, gaining 140 over the year, although the stock is down ten per cent for 2020. Goff says there’s more upside to the name. With the update, he reiterated his “Speculative Buy” rating and $1.10 target price, representing at press time a projected 12-month return of 32.5 per cent.
Within the world of e-sports, competition between streaming platforms will heat up in 2020, according to Goff and Tucci, with major deals being signed in 2019 by top names Twitch and YouTube, while Facebook Gaming has also entered the streaming field.
The analysts say that the heightened competition will work in favour of content creators and streamers who have significant audience leverage
“Apart from a user-friendly streaming infrastructure, it is mission-critical to offer multiple ways for content creators to monetize their channel,” wrote Goff and Tucci.
“The revenue share retained by Twitch or any other platform for that matter, depends on the control a streamer commands in terms of subscriber base, views, popularity etc. However, we look for the increased competitive intensity across the tech/social media titan-owned platforms, a core part of our thesis on the ecosystem call for improved content payouts as the platform providers move aggressively to take share and dominance away from Twitch,” the Echelon Wealth analysts wrote.
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