eResearch | The video game and esports industry is experiencing high growth as multiple companies list publicly and raise capital. In addition, the number of users playing video games has surged as consumers stayed home due to the COVID-19 lockdowns.
According to SuperData, a Nielson company, 55% of consumers in the U.S. played video games on consoles, personal computers, or mobile platforms during the first lockdown. In 2020, video games and interactive media generated $139 billion, a 12% increase from the prior year, with digital games bringing in $126 billion.
Evolve E-Gaming Index ETF (TSX:HERO), the first Canadian ETF focused on gaming and esports, has increased in stock price by 38% in the past year and is currently trading at C$39 per share.
FIGURE 1: NASDAQ 100 (black) vs HERO (blue) – 1 Year Chart
Playtika Holdings IPO’s on the NASDAQ
Earlier this month, Playtika Holdings (NASDAQ:PLTK), a mobile gaming company, listed publicly on the NASDAQ. Playtika priced its IPO at $27 per share and closed the offering with 80 million shares sold, raising approximately $2.2 billion.
Playtika was founded in 2010 and is a mobile gaming company that is headquartered in Herzliya, Israel. Across the world, Playtika has 19 offices in locations including Tel-Aviv, London, Berlin, Vienna, Helsinki, Montreal, Chicago, Las Vegas, Santa Monica, Newport Beach, Sydney, Kiev, Bucharest, Minsk, Dnepr, and Vinnytsia.
Playtika currently has over 35 million monthly active users across its portfolio of games. Nine of Playtika’s games reached rankings in the top 100 for the highest-grossing mobile games in the U.S., based on total in-app purchases on the iOS App Store and Google Play Store.
Games offered by Playtika include:
- Slotomania
- Caesars Slots
- Solitaire Grand Harvest
- Bingo Blitz
- June’s Journey
- World Series of Poker
- House of Fun
Playtika’s stock currently trades at $29.54 per share, a 9% increase since listing publicly, with a market capitalization of $12 billion.
Engine Media Holdings Raises $25M
Last month, Engine Media Holdings (TSXV:GAME | OTCQB:MLLLF), a Canadian esports gaming platform, announced a private placement of up to 3.3 million units at a price of $7.50 per unit for gross proceeds of up to $25 million.
Each unit in the private placement consisted of one common share of Engine Media and one-half of one common share purchase warrant. The warrants entitle holders to acquire one share of Engine Media at a price of $15 per share.
Engine Media is an esports-focused multi-platform media group that was formed through the combination of Torque Esports, Frankly Media, and WinView Games in 2020.
Engine Media has several technology assets focused on esports, including:
- UMG – a video gaming competition platform.
- WinView – a skills-based mobile engagement platform for sports and esports.
- Steam Hatchet – a data intelligence platform.
- Frankly – a content management and video streaming platform.
- Eden Game – a game development studio focused on racing games.
Clients of Engine Media include more than 1,200 television, print, and radio companies, including CNN, ESPN, Fox News, Vice News, Newsweek, and Cumulus. In addition, Engine Media also has dozens of gaming and technology clients, including Electronic Arts (NASDAQ:EA), Activision Blizzard (NASDAQ:ATVI), Take-Two Interactive Software (NASDAQ:TTWO), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL), Twitch, and Ubisoft Entertainment (EPA:UBI).
Engine Media’s stock currently trades at C$9.25 per share, a 10% decrease since announcing the private placement, with a market capitalization of C$67 million.
Roblox Plans a Direct Listing on NYSE
Roblox, a U.S. gaming company, recently updated its Form S-1 Prospectus with plans to directly list on the NYSE next month under the ticker symbol “RBLX”. Late last year Roblox initially filed plans to IPO. However, shortly after, Roblox announced a suspension of the plan.
Earlier this month, Roblox announced plans to raise $520 million in a new Series H funding round at a price of $45 per share, providing an approximate valuation of $30 billion. The Series H funding round was led by Altimeter Capital Management and Dragoneer Investment Group.
Roblox operates an online gaming platform that provides a 3D digital world (“metaverse”) for its 36 million daily active users. In the 3D digital world, users can create relationships with other users while developing user-generated content, supported by a community of nearly 7 million active developers.
FIGURE 2: Roblox 3D Digital World
Roblox’s platform has three main features:
- Roblox Client – an application that allows users to enter the 3D digital world.
- Roblox Studio – a toolset that allows developers to build, publish, and operate 3D experiences and content in the 3D digital world.
- Roblox Cloud – a cloud-based infrastructure that powers the platform.
On the Form S-1, Roblox stated,
“Our mission is to build a human co-experience platform that enables shared experiences among billions of users. We are constantly improving the ways in which the Roblox Platform supports shared experiences, ranging from how these experiences are built by an engaged community of developers to how they are enjoyed and safely accessed by users across the globe.”
Esports and Video Game Industry
The esports and video game industry is expected to continue increasing in demand as the market grows with new users during the pandemic. During the current economic downturn, the esports and video game industry may be a good defensive investment for portfolios.
According to Newzoo, the global games market was estimated at $159 billion last year and is forecasted to reach $201 billion by 2023, growing at a CAGR of 7.7%.
Other related eResearch articles:
- January 2021: Fandom to Mint Non-Fungible Tokens for Esports Fan Rewards
- January 2021: eSports Betting Platform LuckBox IPO’s by Merging with Elephant Hill Capital
- October 2020: Video Game Acquisitions – Microsoft Buys ZeniMax Media, TGS Esports Buys Volcanic Media, and Victory Square Buys GameOn App
