Investing in Esports Stocks in 2025

With fast-growing global revenue and companies rushing to get a piece of the expanding market, the esports industry -- competitive, organized video gaming as a spectator sport -- is gaining popularity. Strange as it might sound, coverage of other people playing video games has already demonstrated impressive pull as spectator entertainment. It has a huge runway for growth.

How fast is it growing?

How fast is the esports industry growing?

The market for watching pros play video games is growing rapidly, and engagement and investment in the entertainment category surged amid social distancing conditions in 2020. Even as COVID-19 lockdowns moderated in 2021, the video game and esports industries continued to expand.

The industry’s nascent state and continued coronavirus-related uncertainty make growth difficult to forecast, and projections vary greatly depending on how the esports market is defined. Nonetheless, according to business research firm Statista, global esports revenue is projected to be $4.8 billion in 2025 and climb at a compound annual growth rate of 5.5% from 2025 to 2029.

Esports and gaming video content already have a large audience, though. Gaming hardware leader Nvidia (NVDA -2.02%) estimates there are some 2.6 billion gamers worldwide, and the global audience for esports is approaching half a billion people. There's a lot of opportunity to continue developing compelling content and honing lucrative marketing strategies.

The video game industry is riskier than the overall market. Many companies in the space have valuations built on expectations for substantial long-term growth. Still, the gaming industry does have a promising long-term outlook. Most top companies in the industry have recorded heightened player engagement during the pandemic, and global demand for gaming and esports content will likely continue to rise long after the pandemic subsides.

Investors who own diversified portfolios of stocks probably already have holdings in companies with at least some exposure to esports. It's also possible to invest in esports stocks through exchange-traded funds (ETFs) such as the Amplify Video Game Leaders ETF (GAMR 0.81%) that buy video game stocks directly.

Top esports stocks

Top esports stocks to buy right now

In addition to ETFs that bundle together a variety of gaming and esports stocks, investors should also look at individual companies in the space.

Microsoft

1. Microsoft

Microsoft (MSFT -0.11%) strengthened its video game portfolio considerably with the 2023 acquisition of Activision Blizzard, which had made a more aggressive push into esports than most video game companies. Activision Blizzard had an impressive history of building highly engaged communities around its titles, and it owns many original properties -- including Call of Duty, Overwatch, and StarCraft -- that are a natural fit for professional competitive gaming.

These games consistently rank as some of the most watched content on Amazon's (AMZN -0.59%) Twitch platform. Microsoft is also proactively targeting professional sports leagues that could bring esports to the next level.

With the $69 billion acquisition, Microsoft added Activision Blizzard to its Xbox and other gaming subsidiaries to bet on video game subscription services, making it a potential long-term value in the esports space.

Tencent Holdings

2. Tencent Holdings

Tencent Holdings (TCEHY -0.32%) is a highly diversified Chinese tech and media giant with significant, but not pure-play, exposure to gaming and esports. Tencent is, nonetheless, a leader in both of these categories.

The company’s status as a massive media conglomerate, with stakes in many leading gaming companies (and hit titles of its own, including Honor of Kings and League of Legends), gives it exposure to the overall growth of video games and esports. Tencent uses its WeChat social media platform to feature and distribute content, process payments for in-app services, and sell advertising opportunities.

Recent regulatory pressures in China and political tensions between the U.S. and China mean that Tencent stock comes with some added risk. However, the company is a clear leader in technology and entertainment and is well-poised for long-term growth.

Take-Two Interactive

3. Take-Two Interactive

Take-Two Interactive's (TTWO 0.09%) esports business is less developed than that of some other companies, but its NBA 2K basketball series is successfully spearheading a push into esports. The company's hugely popular Grand Theft Auto series is not an esport, but the online version of GTA V has generated high player engagement -- suggesting big esports potential for Take-Two.

One benefit of Take-Two’s business model is its ability to coax long-term playability from games developed years ago. This bodes well for game viewership since long-term fan engagement is key to any organized sporting event’s success.

Take-Two’s growth trajectory suffered a bit in 2021 as it lapped strong results from the previous year during the early days of the pandemic. Nevertheless, this is a proven long-term winner in the video game industry with lots of potential. It used its position of strength to acquire fellow game publisher Zynga (see below), which created a new titan in the gaming space.

Electronic Arts

4. Electronic Arts

There's a lot of audience crossover for sports leagues and video games. Electronic Arts (EA 0.14%), as a game publisher with a strong position in licensed content, enjoys several competitive advantages.

EA's Madden and FIFA stand out as two of the biggest franchises in gaming, and the company has garnered considerable excitement with its College Football 2025. On the company's second quarter fiscal 2025 conference call, management noted that, "College Football 25 was not only the best-selling HD title in North America, it has also proven to be a wholly unique moment of sports culture, connection, and fandom."

EA can boost engagement by tapping into the excitement surrounding real-world sports seasons. For example, the 2021 NFL Pro Bowl was conducted as a Madden game with NFL players competing against each other virtually instead of physically. This template was repeated in 2022 with a hybrid physical world and virtual game experience.

EA has taken a different approach to esports than many of its competitors. Instead of maintaining the traditional divide between professional leagues and spectators, it's often made tournaments accessible to all players. This approach encourages player engagement and in-game spending. EA is also focusing on mobile esports, as evidenced by its 2021 acquisition of Glu Mobile, which is responsible for titles such as Design Home and Diner Dash.

How do they make money?

How do esports companies make money?

Esports companies earn money through broadcast licensing deals, merchandise sales, live-event ticket sales, sponsorships, and advertising. Companies can also sell exclusive rights to operate esports teams within official leagues. Competitive gaming leagues can also function as advertisements for the underlying franchises.

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Just the start

Esports investing is just getting started

The esports sector is young, and consequently, it's still rapidly evolving. That makes it an exciting and risky -- but potentially very profitable -- growth area for investment.

It’s important to note that esports companies are likely to face challenges developing their esports businesses, and the failure rates of individual companies and projects within the space could be high. Risk-averse investors might find esports businesses unappealing for that reason.

Approaching the video game industry and esports investments with a buy-and-hold mentality could result in big returns provided that the leading esports businesses continue on their current trajectories.