• Esports is a growing market, predicted to hit $1.8 billion by 2022.
  • Media companies are finding marketing opportunities inside games, connecting with millions of potential customers through interactive special features.
  • Roundhill Investments helps investors get a piece of the esports pie through exchange-traded funds (ETFs). Its three main focuses within the industry are game developers, game streaming services and hardware.


People who spent their teen years hunched over gaming consoles are having a moment right now — and not just because they’re primed to deal with social distancing regulations.

The esports industry is projected to hit $1.8 billion by 2022. Multiplayer video games have gone from just for fun to earning the kind of money usually reserved for sports like football, baseball and basketball.  

“League of Legends is probably the number one esport in the world: it gets more viewers than the World Series, NHL Stanley Cup Finals or the NBA Finals,” explains Will Hershey, CEO of Roundhill Investments. “For last year’s finals, they averaged over 20 million viewers and peaked at over 100 million people watching. Only the Super Bowl is higher than that.”

Roundhill Investments helps new-to-the-party investors catch up to next-generation opportunities through exchange-traded funds (ETFs). Its first series focuses on esports, which Will says it divides into three main categories: game publishers and developers, media companies streaming the games and hardware.

Will joined the podcast to talk about what makes esports so exciting compared to traditional leagues, why you don’t have to be good to be the top player and why the future of gaming is in your hands (if you’re holding a smartphone).

Interview Highlights — Will Hershey, CEO of Roundhill Investments

It’s a great time to be a ‘NERD’

We’re public market investors. Our product, the Roundhill esports ETF, trades on the New York Stock Exchange under the ticker symbol NERD because we’re investment nerds and gamer nerds. 

We break the esports industry down into three main categories. The first is the game publishers and game developers. It can’t be understated how much power the companies that develop and own the intellectual property (IP) in gaming have. It’s unique to gaming and esports. You and I could start a pick-up basketball game tomorrow, but we cannot start an Overwatch league without Activision Blizzard signing off. 

The next piece is media companies. No one wants to watch someone else watch a movie, but they want to watch other people play games. These are companies that own streaming platforms that are putting on live events, that operate leagues. 

The last piece for us is hardware companies. The same way golfers invest hundreds of dollars into a new set of golf clubs, gamers all the way from amateurs to professionals are investing in keyboards, gaming PCs and gaming headsets. That’s a brick-and-mortar way to play the space.

Get in the game (literally)

We’re working with in-game monetization: it’s all about introducing new content on a frequent basis. You’re seeing seasons within these games that are somewhat analogous to a new season of a TV show. Fortnite developer Epic Games is notorious for being the best at rolling out new content to keep players coming back. It’s a very different medium because it’s immersive and it’s social. 

You’re also seeing other forms of media — whether it’s film or music — making its way into the game. Marshmello had a concert inside of Fortnite that was the biggest concert ever because a million people all went to the same place inside the app to watch from inside the game. Fortnite has become a platform more than a game. It’s less about winning and more about social interaction. 

You’re starting to see more integrations of other IP. Star Wars did something incredible: they put the trailer for their new movie inside Fortnite and afterwards your character actually got a lightsaber. Gaming is the only medium where you can have that kind of emotional impact on a user.

A winning personality trumps actually winning

The four biggest tech companies in the West are investing in live streaming platforms. You have Twitch owned by Amazon, Facebook Gaming which is Facebook, Mixer which is Microsoft and YouTube Gaming which is Google. 

For a lot of people, esports is just high-level professional play where the league and tournaments look like traditional sports. League of Legends is probably the number one esport in the world: it gets more viewers than the World Series, NHL Stanley Cup Finals or the NBA Finals. For last year’s finals, they averaged over 20 million viewers and peaked at over 100 million people watching: only the Super Bowl is higher than that. League of Legends just signed a $130 million three-year deal only for China and only for their World Championship, which is their last tournament at the end of season.

Most of the eyeballs and most of the monetization are actually not on those high-level professional esports leagues. It’s at the individual content creator level that looks and feels a lot like what we’re seeing with Instagram influencers and YouTubers. A lot of the audience right now is focused on the guys who are the most fun to watch — who are not necessarily the best players in the game. 

You probably already own the next big gaming console

Mobile gaming and mobile esports are going to be massive. You have the ability now to play AAA games on an iPhone 5 or 6, which is democratizing the world of gaming to emerging markets like Latin America, India and Southeast Asia. To me, that’s the biggest next step in terms of making gaming truly global. 

You already have two billion people playing games, but if I’m in India I can’t necessarily afford a $500 optic gaming console or $2,000 gaming PC. But the smartphone penetration rate is really high, and now I can play not only against my friends on smartphones, I can play against someone across the world that has a PC or an Xbox. That’s the most exciting part.

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