Video Games & eSports Betting Update – Sony Invests US$250M in Fortnite and Embracer buys Sweden-based Saber Interactive for US$525M

eResearch | The video game and eSports betting industries experienced significant growth and deal activity as larger game publishers announced acquisitions of various studios with proprietary game engines, while eSports wagering platforms partnered with betting operators and networks.

Video Games Industry

The video game industry experienced a boost in activity and sales due to global lockdowns caused by the COVID-19 pandemic, which in turn stimulated investments and deal activity. At the end of this year, the industry is expected to receive another significant catalyst from the launch of next-generation Microsoft (NASDAQ: MSFT) XBOX and Sony Corporation (TSE:6758) PlayStation consoles.

According to Newzoo, consumer sales in the video game industry are expected to reach US$159.3 billion this year, a 9.3% increase year-over-year, with continuing  growth to US$200 billion by 2023.

Video Games Update

Early this month, Japan-based Sony announced a US$250 million minority stake investment in Fortnite, the most popular battle-royal style game developed by Epic Games, Inc., which is owned by China-based Tencent Holdings Ltd. (HKG: 0700).

Sony expects to leverage Epic Games’ Unreal Engine, a video game engine with powerful graphics capabilities, which will support Sony‘s future development of  gaming assets and technology. Epic Games showcased its updated game engine, the Unreal Engine 5, at a recent demo on a Sony PlayStation 5.

Earlier this year, Embracer Group AB (OTC: THQQF), a Sweden-based video games holding company, closed a US$525 million deal to acquire Saber Interactive Inc., a U.S. game developer who uses a proprietary game engine called Saber3D Swarm. Saber Interactive was the fifth operating group added to Embracer Group’s portfolio of companies.

Lars Wingefors, CEO of Embracer Group, said, “Saber has been on our radar for a very long time because of their deep history of consistently high-quality work. Their ambitious moves towards self-funding projects in recent years have been particularly impressive, especially with World War Z, which sold more than three million units. While Saber will remain a standalone company within Embracer Group, we look forward to collaborating with them to elevate their ability to create and market premier titles”.

eSports Betting Industry

The betting industry experienced a drastic change with the introduction of eSports. Traditional online sportsbooks expanded their platform offerings to include eSports, while new platforms launched sportsbooks catering specifically to gamers and eSports fans.

According to Goldman Sachs Investment Research, the global eSports betting market is expected to reach US$17.2 billion this year, growing at a 44% CAGR.

eSports Betting Update

Early this month, Newgioco Group Inc. (NASDAQ: NWGI), a global sports betting platform which recently started offering eSports wagering, announced a content distribution partnership with EveryMatrix, a sportsbook solution company based in the U.K. with a large network of gaming operators including NetEnt, Microgaming, and Betsoft.

Last month, Newgioco also announced an exclusive partnership with Italy-based Guadagno Matematico Srl, who operates an innovative trading system called Oddsmatcher Matched Betting, which is now integrated into Newgioco’s proprietary betting platform.

In March, eResearch published an update Equity Research Report on Newgioco, which can be viewed through the article called “Newgioco Update Report“.

This month, Europe-based Esports Entertainment Group, Inc. (NASDAQ: GMBL), an online gambling company focused on eSports, announced the acquisition of LHE Enterprises Ltd., the holding company of Argyll Entertainment AG, a Switzerland-based online betting operator regulated in the U.K. and Ireland.

Earlier this year, Esports Entertainment Group (“EEG”) became the first eSports betting company to launch an IPO as it listed on the NASDAQ exchange. EEG raised total proceeds of US$6.2 million, which included US$4.4 million from warrants exercised last month.

See below other recent eResearch articles related to eSports and gaming:

• June 24: “eSports Betting Industry Update as Capital Markets Activity Increases & Companies Innovate to Grab Market Share”
• June 22: “Electronic Arts Live Fireside Chat – CEO Speaks On Three Pillars of Growth for the Future”
• June 15: “Kuuhubb – Fiscal Q3/2020 Financial Results Below Our Estimates”
• June 1: “Zynga Acquires Turkish Mobile Games Developer Peak Games for $1.8B, Boosting Daily Active Users by 60%”

 North American Video Games and eSports Betting Industry Watch-List

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