When I was much younger (a teenager and in my 20’s), I couldn’t believe that my parents didn’t ‘get’ the things that were important to me. I recently read an article that brought home to me that I am indeed half way through my 6th decade and that there are many things that are foreign to me.
One of these things is the rise and rise of ‘esports’.
The Asian Games had six esports demonstrated in 2018, and medal status is promised for the 2022 Asian Games. The six sports that were demonstrated are Arena of Valour, Clash Royale, Hearthstone, League of Legends, Pro Evolution Soccer and StarCraft II. These games have appeal to younger generations, who spend countless hours playing online games, many of which are free to play. South Korea was the first country where esports moved from hobby to professional and in 2011 Seoul banned children under 16 going on gaming websites between midnight and 6am (which of course has issues with the ability to enforce it.)
Esports arena in Sydney – read more https://www.abc.net.au/news/2018-05-31/first-dedicated-esports-arena-opens-in-sydney/9820418
A quick search of ‘esports Summer Olympics’ indicates a willingness to consider the sports for the Paris Olympics in 2024, but concern over the role of violence and discrimination in the games. (And there is a lot of killing in the games).
As Magellan analyst Michael Collins notes ‘why wouldn’t esports deserve Olympic status? At an amateur level, professional esports have become a US$900million industry that boasts an audience of 380 million people. Teams train, competition is intense and skill is paramount. These professional level games are performed in front of thousands of cheering fans. Sponsorship is provided from Adidas, Nike, UnderArmour. Major media companies jostle over media rights. The online gaming industry is worth US$138 billion.’
You may have heard references to Fortnite which is an online shooter-survival game with cartoon type characters which was only released in 2017 and is likely to surpass all income records.
The big concerns are the social cost, mental, physical, social damage. China has begun censoring and controlling games, which has led to an immediate impact on the share values of companies with an investment exposure to these industries. [League of Legends, Overwatch, PUBG, Fortnite among list of games reportedly banned in China 12/12/2018
The World Health Organisation has added a new disease to be treated called ‘gaming disorder’. This is a mental disorder that afflicts some fraction of the people who play online games and is characterised by ‘impaired control over gaming’ of sufficient severity to result in significant impairment in persona, family, social, educational and occupational areas.
Esports are an indicator of how society is changing – and something that your investment managers are aware of and tracking. Read more detail below in the article by Magellan.