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This trend will someday be a $2 billion market

Attendees play the "Call of Duty: Black Ops III" game by Activision Blizzard Inc. during the E3 Electronic Entertainment Expo in Los Angeles.
Patrick T. Fallon | Bloomberg | Getty Images
Attendees play the "Call of Duty: Black Ops III" game by Activision Blizzard Inc. during the E3 Electronic Entertainment Expo in Los Angeles.

ESports, watching others play video games in tournaments and, in some cases, betting on them, is one of the fastest-growing under-the-radar trends in media and entertainment, estimated to grow nearly 50 percent annually over the next five years into a multibillion dollar market.

"We believe that eSports is on the cusp of rapid user adoption and exponential growth with new revenue streams for video game developers, publishers and content distributors — in addition to the "prize money" awarded to gamers themselves," Baird's Colin Sebastian wrote in a note to clients on Monday.

He added, "We also see multiple potential incremental revenue streams from eSports, including: online and in-person tournaments, advertising, sponsorship, broadcast, royalties/revenue shares, fantasy leagues/wagering."

Investors are wondering how they can take advantage of the eSports trend and which companies will benefit most from the rise of this new industry.

Baird analyzed the issue and calculated the positive impact of this trend on several companies.


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