5 things you need to know about Esports | EP 9

Hello and welcome. Esports or competitive video gaming is on track to be a billion dollar industry. It is also a sector that presents plenty of investment opportunities for corporate and retail investors. I have chubby germ seeing from the money my team, Etzioni and I'll be looking at the five things you need to know about investing in East. But joining me now is Larkin White, co-founder of tournament organizer E-sports Players. Oh yes, Powell and Kelvin Wong, market

Well, actually, there are a couple of factors.

Number one is let me talk about the acceptance of e-sports as a professional

sports e-sports in a couple of years, with about 10 to 20 years, it's been around. It's only that recently. In the last five years, we began started recognized as a professional

sporting legal team as being competitive

sports as recognised by the Asian Games, as well as the Southeast Asian Games and the next particular. Although EA Sports got a goal pass, will be the Olympic Games.

It's a big

labour of feature at the fringe spots upcycled in mobile

competition. These sports and due to

the external environment, we're actually being reinforced by the

pandemic. Most of

us are being locked out of the kind

of caveman situation

where people got nothing else better to do, start a being and grow

and start to find out more about

how it was. This is possible. These are the two actually main factors as a

rethink

the growth of e-sports in

the last one or two

years, as well as the coming years ahead.

I agree.

For myself, it's also the consumer behaviour factor that is driving e-sports. The global pandemic lockdowns

UK should actually accelerate that. The consumer behaviour, things that consumers are now very

engrossed,

fees, very lofty online. I estimated this digital

behaviour that has been accelerated a good five to seven

years because of that

pandemic situation. So there are more people who are

playing games as a form of

entertainment.

But aside from that, the lockdown

situation, I think many people

are also engaging in games to

socially interact online with their friends and family that used to interact online.

It's also driving e-sports.

You can play games frequently with your friends, but after a while, you may look at

how to compete on a friendly

basis, on a competitive

manner, within the

community, against your friends. And I think all those are driving esports.

Acceleration in consumer digital behaviour has also attracted the attention of corporates to e-sports, and now we're also seeing non-endemic brand pump cash into esports. Why is that?

We are in a day and age

where

consumers want to interact with brands that understand their lifestyle, so it's no longer adequate just to pace

a logo on ATS.

Whether it's digital or physical, brands understand that they want to be involved in activities that consumers like. They want to be

part of that digital lifestyle.

So hence you see what is endemic and non-endemic brands.

They really

tried to understand the lifestyle, the digital lifestyle consumers and gaming is a very, very big

component in that

digital lifestyle.

On top of this, we will have a significant

government push as well towards

e-sports because if you look

at the situation right now, the growth of esports in the next couple of years, the people come in our region, especially the Asian region. We, I believe, close to, I think, 50 percent.

The growth will be sort of seen a reason.

Yet, especially

in China just right now, obviously,

it depends how you look at things. The number two, well, largest economy. Some of us may debate about that, but nevertheless you start to see a big push for Beijing,

especially annual

League of Legends, which is one of the

premier competitive

e-sports competitions around the world to be hosting in the next two consecutive years in China. And there's lots of incentive or subsidy scheme to for into hosting of this event.

So if this can be

pretty much

successful, we may start to see several Asian

countries in

Singapore to start

taking a look at this e-sports as another driver of economic growth.

If you look at how e-sports has grown in Asia, the region now has the largest audience of aespa players and fans in the world, with half a billion esports fans and almost 600 million e-sports gamers keen. Why would such a huge audience pool? How can you possibly be?

You can see as the sector

matures, the

revenue and business model are starting to diversify, and you are seeing very interesting business models that are coming up. We also have some. What conventional revenue

model like sponsorship

and advertisement, that's definitely a mainstay in the

e-sports industry,

you have now

also content

premium

content that potentially aired across OTT pay TV network consumers

are subscribing to. You have online

e-sports courses that

are

produced by entertainment

providers,

merchandise, EA Sports

merchandise in the form of gaming chairs. Those are all coming on stream as well

in that area. There will be

providers on legalized

sports betting. That's a new sector. You have little item premium subscription on some of

these e-sports websites that's also coming on very quickly. So I think the whole range of revenue models are all possible, and because e-sports itself is a digital native activity digital business model that

has worked for many parts of the world could be

continuously translated into the e-sports sector.

Quinoa You built your business around fan engagement on

your e-sports platform.

What can traditional sports learn from e-sports?

Yeah, the very important differentiation of e-sports versus many traditional

sports is e-sports is

actually a

digital native event.

So during the pandemic period, you see a lot of early adopters,

event

organizers in e-sports,

they were suffering very badly because physical events

are almost impossible. That as she drove a lot of people to move online and the tournament organiser like ourself, which is

completely beat flourish, flourishes

very well during the pandemic event. People realise that it's actually a much bigger platform to run e-sports online and digitally because after all, imagine you could

have many events

over weekends or Friday nights just putting on a smartphone device or a PC.

Literally, the whoa, it's the

audience you could engage with, getting them to participate in tournaments, getting them to look at live streams. So those are all very, very easily done on these

bases in the e-sports.

While an estimated 70 per cent of gamers are kin.

Wait, what

are you doing to encourage more women to play e-sports?

We actually what we've brands who are interested in either gender neutral audience or even

female audience to promote some of the

activities we have. For example, we are coming up with

a female only e-sports

league call Empress Arena that is very focused on encouraging female competitive

gaming. Of course, the

argument

is also your gender equality. Maybe the emphasis

should not

be just female

participation, but rather a gender

neutral participation.

We would very much like to see

that, as you mentioned earlier, female

participation, we currently estimate, is about 30 percent across grassroot e-sports activities, but this is growing fast. If you compare these

to two or three

years ago is probably half of that number. So we are seeing a lot of interest from the female fans who are now equally competitive.

That will only grow because in general,

that also

ties to the wider

gaming trend. So there are many game

publishers who produce

type, those that are more gender

neutral. That adds a very different dynamic.

I think good participation from all genders would actually give a very dynamic

platform to competitive

gaming.

All right. Just to recap, e-sports is growing rapidly and it is increasingly being accepted as a professional sport. More brands are investing in e-sports, for example, through advertising and sponsorship. While traditional revenue models like advertising and sponsorship are here to stay. New revenue streams emerging, such as premium content for pay-TV networks and online courses I've been speaking with now can wife call fund up tournament organiser, E-sports Players

Yeah. So with retail investors can get exposure to the e-sports sector, whereas on par by a single name

stocks, the whole e-sports ecosystem

itself is pretty huge.

So let's start with the

upstream one first, which is from the game publisher companies that design and create the

games like

Active Visionaries at 8pm by the tech talk. So these are the popular one. On top of that, we have some hybrid company which is closer to Asia

like Tencent, which also published

games. But on other hand, you have other parts of the business like is on par with the global VP. Closer to home Singapore, we have to

see which is the really coming off Shopee.

So even though we are men, we are kind of more known to Shopee rather than being a game publisher because Asia

itself at a moment. If I'm not wrong,

they only publish one successful game. So on the other side of the spectrum, you have the hardware company to support the e-sports ecosystem. You are talking about the keyboard that used to.

Play in combating sports esports.

The mouse, this will come under Razer, you also have the semiconductor chip that actually powered the Games to

have a better, higher

consumer experience or competitive experience that you need to

have a higher running a

semiconductor chip, which is overkill. So these are the Veeva's

spectrum investors,

which you look at

Calvin. Besides single nameplates, what are some of the e-sports exchange traded funds or ETFs?

Investors can

look at

for investors once have a broader

base approach to a more diversified basket,

we'll explain. At the moment, actually free kind of a liquid, a popular ETFs exchange traded fund. The first one of these, so these factors beyond

giving e-sport

the ticker, then you have normal X video games,

esports just right now.

The Left is pretty much cheesy in because, of course, you

know, and that's why we brought your

Becroft Esports digital entertainment

and they

call it in any of the other actually offers a diversified approach in investing the esports ecosystem. Let me get sidetracked because e-sports itself are in terms of the industry that is being spent on, will be primarily on the consumer

discretionary,

the communications business and information technology. So these are the technology that most international investors use is

actually being tracked by the S&;P

11 key industrial sectors. So for investors, always have a better spread across these three sectors consumer

discretionary communication service

and input

tech. The Hue, or the global

ex-Beatle games will happen more evenly spread combat

to sport,

which is not that close video gaming, which tends to be more heavily skewed towards communication services because I think calls about 60 percent of weightage into that.

Before we wrap up the podcast Kelvin, what are some of the risks investors need to be aware of?

If you guys still want to invest in a particular is possibly the stocks you've got to see.

What other revenues do they have

with such

a robust subject to

any risk of regulatory clampdown as well as on board? Tencent is not really a

pure play on e-sports

because Tencent itself has other revenue

stream.

We pay

WeChat. You've got a fintech business. So Southern

China Big Tech stocks that has this

company emphasis

on e-commerce fintech. You see the share price correct quite a fair bit. Cross about 10 to 20 percent since the peak of February due to the ongoing clampdown from the Chinese authority on the fintech

business, as well

as the more the plastic

e-commerce behavior.

And a second one will be more related to its ongoing ESG

template that fund

managers worldwide are

being embraced

to either foster directly or

indirectly. So some e-sports

related, at least the company that went into the betting

arena, like then Broxburn

got itself as a very successful betting company by focus on football and other traditional games.

So we have some other companies that has that still

set up

shop over the years.

Growth was pretty

significant, but that is a sticky

subject to ESG reasons.

Well, raise lots of money,

potentially

neutral due to a lower

ESG

score and the top

one. The reason I talk about is more internal market related risk. So if we look at the share price

of the broad based

ETF is what are the ETF that show beyond not here? Yes. They have come down significantly since the February or January peak, about 15 to 20 percent decline until about May. And also actually, this decline is coincident with the rise in the U.S. Treasury piano, which actually has a direct correlation with inflationary growth. I see the start of this year pretty much point out where we see commodity prices that's hiking up and start to actually float down to manufacturing

So do the financial markets was due to this in discrimination. If you start to

see inflation stock picking up in the second half of the year, I spent the next year.

If you start to see the

10 year going to pick up to about two percent or more, the pressure in EA Sports related stocks in general.

There you have it. The five things you need to know about investing in East. But Kenwyne Kelvin, thank you for being on the podcast.

Thank you very much. It's my pleasure.

Thanks, everyone. I've been speaking with Larkin Y, co-founder of Pokémon Organizer, The Players League of SPL, and Kelvin Wong, market analyst at CMC Markets. Thanks for listening and catch us again over the next five things you need to know Podcasts by the money, my team.