Should you invest in eSports? James Sanders (London Diamonds) breaks it down

James Sanders London Diamonds on investing in esports

As managing director of London Diamonds, I’m used to taking an innovative and disruptive approach to the diamond jewellery market. I take this same attitude of disruptive innovation into every venture that I invest in or otherwise contribute towards as it grows.

My main investment areas of interest are cryptocurrency, technology and AI as well as property, diamonds (of course!) and tech. All of which means that I’m always looking out for the next big opportunity within technological innovation. In this blog I’m going to dive into eSports and lay out the benefits and downsides of getting involved in this fast-growing sector.

Development of the eSports sector

Over the last 15 years or so, gaming has become entrenched into our lives. Everyone all around the world has quickly absorbed the gamification of all kinds of services and goods, as well as the growing interest in AI and augmented reality games.

And a subsector of the global video games market lies in eSports. Essentially, eSports has transformed playing video games into a true sport. Spectators follow teams and competitions in exactly the same way as real-world sporting events and the global eSports sector is expected to generate more than US$1.3 billion by the end of this year.

According to market researchers Newzoo, eSports will have an active viewing audience of more than 530 million by 2023. This growth has naturally attracted investment.

  • China makes up around a third of the global market for eSports.
  • More than 260 million people consume eSports content more than once a month every month and by 2025 this is expected to reach 318 million people.
  • Even with these kinds of numbers, at present eSports only accounts for 1% of the overall video games market globally (according to the World Economic Forum).

Market spread and growth around the world

The three largest markets right now are Asia/Pacific, Europe and North America and while the very idea of watching people compete professionally while playing video games may seem strange to some, it’s clear that it’s a huge market.

Just to give an idea of the sums involved for top earners, Team Liquid has earned almost $40 million according to And every single team in the top 10 on that site has earned at least $15 million!

A number of big name businesses have invested massively in eSports and its potential. The biggest is probably Microsoft’s possible deal for Activision Blizzard. If this goes ahead – and it’s far from certain, it could be the catalyst for bringing eSports further into the mainstream.

Key eSports platforms for viewers

Various key platforms have emerged as the favourites for eSports over the last few years as the sector is grown. These platforms are designed to allow viewers to watch interactive content and the most well-known is Twitch. Owned by Amazon, Twitch is one of the most popular platforms for eSports consumers.

Other major tech players are trying to match Twitch’s success with Meta Platforms from META (formerly Facebook) and YouTube (owned by Alphabet) the biggest contenders. In China, some of these are blocked, so players and viewers there use Youku, Tencent Video and iQiyi among others.

According to stats, the top live-streaming platforms in the first quarter of 2022 were:

  1. 6.13 billion hours of content consumed on Twitch.
  2. 1.13 billion hours consumed on YouTube Gaming Live.
  3. 803 million hours consumed on Facebook Gaming.

Investment options within eSports

So that’s the context of the sector and how fast it’s growing. If you are thinking of investing in the sector, there are a few options available to you.

The first is buying individual stocks. This means you will own a stake in the eSports platform or company in question. This is risky, however, and means you should do plenty of research before taking the plunge.

However, if you want more diversification, you could buy mutual funds or invest in ETFs that invest in eSports companies. This obviously comes with less risk as the fund’s success isn’t predicated on the performance of just one. Be careful of the fees though, as these can eat away at your returns.

If you don’t have a broker already, you can open an online brokerage account very easily, which allows you instant entry into investment decisions. I would always advocate only investing a sum you can afford to lose, particularly if you are starting out.

Stocks you could invest in

Every indication is that this sector will continue to grow, and as it does so, new opportunities for investors emerge.

The following is a list of the types of eSports stocks you could get involved with:

  • Investing in game developers, such as EA (Electronic Arts), Activision Blizzard or Namco Bandai.
  • Investing in eSports teams – this is harder to access as they are usually private companies. However, there are a few public possibilities. Some football teams in Europe have launched their own eSports teams and are publicly traded.
  • Investing in gaming hardware companies, such as Microsoft (makers of Xbox) or SONY (makers of the PlayStation).
  • Investing in eSports gambling platforms or companies.

How much are top teams worth within eSports?

According to Forbes, as of July 2022, the following are the most valuable teams within eSports:

  1. TSM – valued at $540 million and owned by Andy Dinh
  2. 100 Thieves – valued at $460 million and owned by Matthew Haag, Scooter Braun, Drake and others.
  3. Team Liquid – valued at $440 million and owned by Victor Goossens, Steve Arhancet and aXiomatic Gaming.
  4. FaZe Clan – valued at $400 million and owned by Michael Stang Treschow, Nordan Shat and Lee Trink among others.
  5. Cloud 9 – valued at $380 million and owned by Paullie and Jack Etienne.

And remember that the industry is extremely young. We can expect to see enormous growth and changes in opportunities over the next few years. Now would be an excellent time to get involved with investing in eSports before everyone does!

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