Here comes the 2nd wave of Esports IPOs

While most of the country braces for what could perhaps be an even stronger 2nd wave of COVID-19 cases in Canada, the esports industry in Canada has seen a second wave of new companies this year and a growing pipeline of companies poised to list in 2021.

The overall gaming industry has seen a huge spike in revenues with the industry expected to grow 20% in 2020 to reach $175 billion and soar to $218 billion by 2023. Game console sales and media rights are both soaring as more and more people are staying home to game.

Esports and the broader video game industry have been very well represented in 2019 and 2020 saw a new class of entrants vying for market share from the high growth industry. Let’s take a look at 3 new esports companies that came to the markets and several more that are planning their public listing.

1: TGS Esports Inc. (TSXV: TGS) – Market Cap $10.85M

Based in Vancouver, formerly known as The Gaming Stadium, TGS has been one of the most active esports companies so far this year. With a flagship esports arena in Vancouver, they have built a steady community of casual and competitive fans who compete in person or online. The recent acquisition of Pepper Esports, a tournament management platform, helps them bridge the gap between in-person (LAN events) and online. Another acquisition of Volcanic Media sets them up to make major in-roads in the high school gaming scene.

2: YDX Innovation Corp. (TSXV: YDX) – Market Cap $3.039M

Another Vancouver based company with offices in Brazil and the UK, YDX Innovation is not new to the public markets, but turned the page in 2020 with a sprint into the esports industry. Their core business is creating immersive digital experiences for global brands and has rolled-out a very successful free-roam VR entertainment product which has been sold all over the world. Recent acquisitions include Render.GG, Purple Mage Advisors, Amuka Esports and Shattered Dreams. This will give YDX the ability to monetize on content creation, data/analytics, venues/tournaments and competitive esports teams.

3: ESE Entertainment Inc. (TSXV: ESE) – Market Cap $0.92M

ESE Entertainment, is also based in Vancouver but it’s best assets are in Europe, a much more mature esports industry. It fields teams in popular games like League of Legends, APEX Legends, FIFA and Rocket League. It also runs the Rocketmania tournament series across several European countries and is starting to build up its influencer roster.

Coming soon…

The pipeline for new listings is also really strong with companies such as Luckbox, Tiidal Gaming, Monkey Knife Fight and Reciprocity potentially joining the markets in 2021.

Themes to watch for 2021 are going to be VR gaming, mobile gaming, and online tournaments which are verticals that should see TGS, YDX and ESE thrive and succeed. As more and more regions get shut down or face increased restrictions, gaming is going to get it’s time to shine, again.

Console Wars: Holiday Season 2020

Special  InvestorIntel feature, written by contributing editors Ben Feferman and Nate Trewin

PlayStation 5 vs. Xbox Series X/S vs Oculus Quest 2

Who doesn’t love a good old fashion console war. Every time there’s a new console, the war picks up against and this holiday season we have two stalwarts in the industry going head-to-head with a third party candidate, picking up momentum.

Most pollsters, (and we know they are never accurate) will tell you, PlayStation 5 is the runaway favorite, even with a higher price point and supply shortages. But the Xbox Series X and the Oculus Quest 2, should give our frontrunner a good fight. Here’s the breakdown on the current candidates:

PlayStation 5 – Sony Corporation (NYSE: SNE) 

Sony’s PlayStation 5 was officially released on November 12. There are two versions that are able to be purchased. There the standard PS5 at $500 USD ($629 CAD) or there is the new digital edition at USD$400 (CAD$499). The main difference between these two systems is that the standard version includes a disk drive and supports physical copies of games. Whereas, the digital version does not have a disk drives and is only compatible with games purchased through the PlayStation store. Looking at the specs of the PS5, it possesses as 8-core 3.5 Ghz AMD Zen2 CPU, a 10.3 teraflop AMD RDNA 2 GPU, has 16 GB GDDR6 RAM, has 825 GB of custom SSD. It can support up to 8k in resolution, a blue ray drive (on the standard version only) and up to 120 FPS on certain games. Regarding the looks of the PS5, its main colour has switched from the tradition all black to white with black accents. Each system comes with the one DualSense wireless controller. If you are looking to buy an extra controller that will be an additional USD$69 or (CAD$89).

Now that we have looked at the specs, let’s look at the reasons to buy a PS5. If you have been a PlayStation fan, from previous generations you expect much of the same. Another reason besides the consistency on the PlayStation is the great exclusive games that are available. Some of these key exclusive games include Spider-Man: Miles Morales, Horizon II: Forbidden West, Gran Turismo 7. Another reason to purchase the PS5 is the backwards compatibility. For the first time, almost all PS4 games, as well as optimized PS4 Pro games are able to be played on the PS5. This means that you don’t have to sell all of those old PS4 games as they can be enjoyed for years to come.


Xbox Series X/S – Microsoft Corporation (NASDAQ: MSFT) 

Looking at the new Xbox, there again is two new models, as with the PS5. There is the Xbox series X which is their flagship, and there is the series S. Similar to the PS5, both the Series X and S consoles have backwards compatibility.  This means that you can play you all of your past favourite games on the present generation. Xbox also has their own line of exciting exclusive games. Such games include Halo Infinite, Senua’s Saga: Hellblade 2, Forza Motorsport 8, State of Decay 3. As well there is the new Xbox controller which comes in three different colourways (Robot white, Shock Blue and Carbon Black). Both the series X and the S come with one controller and additional controllers are USD$60 (CAD$74.99).

The new Series X is priced at USD$499 (CAD$599). Aesthetically, the Series X comes in one colour (black), and it is a rectangular box that won’t take up too much room. The specs for the series X are 8-core, 3.8 GHz AMD Zen 2 CPU, 12.0 teraflop AMD RDNA 2. GPU, 16 GB GDDR6 of RAM, 1 TB custom NVMe SSD. Similar to the PlayStation, it can support up to 8k in resolution, and up to 120 FPS on certain games. This system serves as direct competition to both PS5 systems.

There is also the new Series S which is priced at a surprisingly at USD$299 (CAD$379). Aesthetically, the Series S comes in a smaller form factor but remains the box shape, but this time is white. This console is the less powerful little brother of the Series X. The Series S has the same processor as its big brother, but it will have slower loading times, a less powerful GPU and has only 10GB of Ram compared to 16GB. The Series S targets 1440p gamers rather than the Series X which is at 4k gamer. It will run some games at 120 FPS, but it does not possess as much storage. This console has a 512GB SSD and is digital storage only. However, it does support the ability to add extra Seagate SSD (but this comes at an expensive additional cost). 

Oculus Quest 2 – Facebook (NASDAQ: FB) 

The last item to look at is Facebook’s Oculus Quest 2. This is the newest Virtual Reality (VR) system. Starting at USD$299 (CAD$399) for the 65 GB and USD$399 (CAD$549) for the 256GB, these systems allow you to experience VR in the comfort of your own home. Although these devices require a Facebook account to log in (hello big brother), they have a ton of options for use. You can get the best seat in the house to live concerts, ground-breaking films, exclusive events, and more from the comfort of your own home. The Quest 2 is also backwards compatible, so you explore all past titles from previous models. Now is probably one of the best times to explore the world of VR. With the coronavirus pandemic and looming global lockdowns incoming this means not leaving your house. So instead of watching more regular YouTube, fire up the Quest and check out YouTube’s their vast 3D and 360 video catalogue.

The Verdict:

If you’re a hard-core gamer you’re likely not even in this discussion because you have or are buying a PC. But for everyone else, there may be enough to convince some Xbox loyalists to make the move to PS5 but likely it’s a case preference with the entire ecosystem. Neither are so revolutionary that they could steal the others fan base to make the move. If this is your first console, well, my vote would be for the PS5.

Oculus is ‘wear’ it gets interesting. It really doesn’t compete with a traditional console and provides a completely different experience. Given that we maybe at home for longer than expected and a long winter ahead, might be worth it to splurge and pick one up as well.

Versus System launches in-game rewards platform in China and enters the health sector with ePlay and PredictMedix

Versus Systems Inc. (CSE: VS | OTCQB: VRSSF) has made its name in the gaming world with their proprietary patented in-game prizing and promotions engine. In 2020, the Company has made great progress expanding within streaming, within gaming and also within the wellness sector. A key to the Company’s success to date has been to reward users who view ads, thereby achieving much greater interest from potential customers.

Versus Systems platform allows game publishers and developers to offer in-game and in-app prizing across mobile, console, PC games, and streaming media. Brands pay to place products in-game and gamers compete for those prizes.

Versus Systems enters the wellness market

In August of this year Versus Systems announced their first move into the health and wellness sector with ePlay Digital Inc. ePlay Digital is a mobile game creator and publisher specializing in sports, esports and entertainment augmented reality titles; but they also operate health and wellness applications and platforms. The announcement states that “ePlay’s catalog of health, wellness and personal improvement applications further diversifies Versus’ content offerings for reward partners in video content platforms and lifestyle mobile applications.” The global wellness market is valued at over $4 trillion which certainly gives both ePlay Digital and Versus Systems plenty of revenue potential.

Craig Finster, President and CFO of Versus Systems, commented: “When considering health and wellness platforms, with fitness apps in particular, we are looking at a market size that’s expected to reach approximately $15 billion in the next five years. We examined that growth potential and the opportunities that would bring and realized that scaling our platform into the wellness category is a no-brainer.”

In a further health theme, PredictMedix (CSE: PMED | OTCQB: PMEDF) has agreed to use Versus Systems technology to help reward, motivate, and retain patients in clinical trials. This may include rewarding patients for joining certain trials, as well as to promote compliance in testing medical therapies. A win-win for both companies. These products, for use primarily by Contract Research Organizations (CROs), academic medical centers and those in the clinical trials markets, will enter a market that Fortune Business Insights estimates at US$40 billion annually.


Versus Systems launches OMEN Rewards with HP into the $78 billion revenue Asia Pacific gaming market

In September of this year Versus Systems announced the launch of its patented in-game rewards platform, OMEN Rewards, in China. The platform is pre-installed inside HP’s OMEN Command Center and Pavilion laptops and desktops and is also available in the Windows App Store. This is a massive step for Versus Systems in terms of gaining enormous exposure in a rapid period of time. Looking at the stock price it appears the commercialization is yet to be factored in. Should the OMEN Rewards platform prove popular then the potential revenues for Versus Systems would be very significant. The Asia-Pacific’s gaming market has approximately 1.4 billion gamers that are forecast to generate $78.4 billion in gaming revenues in 2020.

Versus Systems is expanding rapidly as they partner to commercialize their technology globally


Closing remarks

Versus Systems is having a very strong 2020 as they move rapidly to commercialize their technology. Their base business of providing fun rewards for players looks set to take off following 2020 deals with Kast streaming and HP (OMEN Rewards). Added to this, Versus Systems is now moving into the very lucrative wellness sector. One example being fitness apps with ePlay Digital where Versus can offer users rewards/prizes for viewing ads as they already do in other segments.

Versus Systems core concept remains that a viewer is far more likely to view an ad if there is a chance at a prize or reward. Their research shows that 97% of Versus users agree that adding rewards and prizes makes games more fun. Their expansion from the gaming and streaming worlds and into the wellness sector just further expands the potential revenue opportunity.

Versus Systems currently has a market cap of C$40.5M.

Profiting from a reward system to play at home, Advertisers win through Versus Systems

We all know that the online industries are having unprecedented popularity, in part due to the COVID-19 pandemic that has left people with more spare time to play games, engage in Esports and stream videos. Well one company is profiting from this via their in-app advertising that rewards consumers. The fun part here is by rewarding users to view the ads both the consumers and the advertisers are winners.

Versus Systems Inc. (CSE: VS | OTCQB: VRSSF) is a company that provides in-game prizing and promotions (essentially rewards). The Company’s proprietary in-game rewards engine engages the online gaming community through rewards, which benefits users, developers and brands. And it’s not just video games; the in-app tool also works on streaming services and any interactive media, anywhere in the world.

Just think about it for a minute. Most people never click on regular ads while doing an activity. Why? Because there is no reward. But what if you could get a 10% discount voucher for McDonald’s or a 20% discount on a new gaming console? Suddenly consumers are interested to engage because there is a reward for them to do so. The advertiser also gets rewarded by the engagement and hopefully a visit soon from the consumer to redeem the reward. A win-win for both parties. This is the brilliance of Versus Systems’ in-app advertising platform.

Versus Systems – An in-app platform that encourages users to engage by giving rewards

Source: Versus Systems company presentation

Versus Systems is expanding globally with key partner HP

After a successful launch of their OMEN series computers in 2019, HP is expanding their rewards program, powered by Versus. Versus will also be adding streaming video as a vertical through Kast, a mobile game developer in Animoca, and growing the HP relationship.

Starting this summer of 2020, Versus’ in-app advertising tool will come pre-installed in OMEN and Pavilion Gaming desktops, gaining exposure to tens of millions of machines worldwide. Additionally, HP and Versus will be developing a version of OMEN Rewards to be launched in China this summer. Asia Pacific is home to a $72 billion gaming market according to Newzoo’s 2019 Global Gaming Report.

Versus Systems says that their “current price of US$0.50 Cost Per Engagement (CPE) is less than Facebook average Cost Per Click (CPC) but with much higher engagement and purchase intent.”

Versus Systems has proven it to be successful with 36% of rewards winners going into physical locations to redeem rewards. Advertisers achieved a 3.5x return on ad spend. That is way better results than leading advertising companies such as Facebook and Google.

Versus Systems’ in-app advertising is cheaper than Facebook click

Source: Versus Systems company presentation

Closing remarks

Versus Systems is making all the right moves using their brilliant in-app advertising tool to reward and engage users and win advertisers, especially in the enormous gaming and streaming communities. A simple cost per engagement revenue model follows the Software as a Service model, which we all know once scaled leads to very high margins and profits.

Versus Systems Inc. is growing fast and about to burst onto the global scene. Risk is there due to the early stage, but the potential upside is really exciting. At the current market cap of just C$37 million investors better not wait too long as this can really move up fast if it takes off.

Enthusiast Gaming’s Virtual Concert for MusiCares COVID-19 Relief Fund tonight at 9pm EDT (Thursday, May 14, 2020)

Plus, Menashe Kestenbaum on the effect of COVID-19 on gaming and esports industry and Enthusiast’s partnership with GRAMMY® nominated DJ ZHU and MrFreshAsian

“We definitely have seen huge surge in traffic since COVID started. Quarantined at home with a lot of digital devices and technology – and gaming is tremendously up. We are setting all time traffic record across the board…We have positioned ourselves in an industry that is somewhat recession proof, somewhat pandemic proof and because it is all digital it is well equipped for the future and it keeps on growing…I foresee next four-five years of continual growth based on where the sector is headed and how we are primed at the forefront of this.” States Menashe Kestenbaum, President, Founder and Director of Enthusiast Gaming Holdings Inc. (TSX: EGLX | OTCQB: ENGMF), in an interview with InvestorIntel’s Tracy Weslosky.

Menashe went on to provide an update on Enthusiast Gaming’s Virtual Concert the proceeds of which will go to MusiCares COVID -19 Relief Fund. The three-hour charity stream will start at 9pm EDT on May 14, 2020 and will be live streamed on the front page of Twitch.TV. The concert will be used to promote Enthusiast Gaming’s partnership with GRAMMY® nominated artist and newest Luminosity content creator DJ ZHU, and Twitch streamer of the year MrFreshAsian.

Menashe also said that for the younger generation gaming and esports have become the predominant form of entertainment and the COVID-19 pandemic has brought gaming and esports at the forefront in terms of entertainment.

To access the complete interview, click here

Enthusiast Gaming continues to grow rapidly despite COVID-19, as esports continue to boom

COVID-19 (coronavirus) has impacted the esports sector, but it is still thriving online. Meanwhile the gaming sector has been a major winner from the lockdowns.

Esports and online gaming are booming despite some esports events being cancelled

As much of the world has been stuck at home in lockdowns, many people have turned to online gaming and esports for entertainment. The cancellation of most conventional sporting events is also thought to be boosting the sector.

For example, the Guardian recently reported: “Twitch, one the world’s biggest streaming platforms for gamers, is estimated to have grown its audience by up to a third in March alone.” The article headline “Esports ride crest of a wave as figures rocket during Covid-19 crisis” is commonplace nowadays.

In China there are an incredible 560 million people (62% of online users) participating in live streaming video, led by esports with 260 million viewers.

Gaming and esports has become a social revolution

The boom in gaming and esports is more than just a COVID-19 lockdown phenomenon. Online gaming and esports has become a social revolution. The youth of today are connecting online and forming online gaming communities with each other. It is this online fun and bonding that makes it so addictive. A form of escapism from society’s problems and a way of hanging out online with like-minded friends. This is why the gaming/esports revolution grows stronger each year.

Online gaming led by the Millennials and Centennials is the new social revolution


Enthusiast Gaming Holdings Inc.

Enthusiast Gaming Holdings Inc. (TSX: EGLX | OTCQB: ENGMF) is a rare ‘listed pure play’ on both gaming and esports and is set to benefit more than most from this social revolution. Enthusiast Gaming has the largest gaming network in North America and the English speaking gaming regions. The Company reaches more gamers than Twitch, IGN, Gamespot in the USA; and reaches over 200 million gamers on a monthly basis, with 1 billion page views.

Enthusiast Gaming is succeeding in their mission to build the world’s largest platform of communities for gamers and esports fans. Enthusiast Gaming’s user base is dominated by males (73%) from two generations – the millennials (40%), born 1981-1996; and the centennials (30%), born 1996-2010.

What’s incredible about Enthusiast Gaming is their reach. As shown on the chart below, the Company reaches gamers from all angles including: 100 gaming sites, 900 YouTube channels, 7 professional esports teams, 50 influencers & content creators, and 30 live events globally.

Enthusiast Gaming’s network has multiples touch points of engagement with over 200 million gamers


Enthusiast Gaming continues to partner and grow rapidly

The Company’s recent news highlights the rapid growth:

Enthusiast Gaming Revenue is growing rapidly

Enthusiast Gaming’s revenue is forecast to almost triple in 2020 to ~C$35 million, up from C$12 million in 2019. Analyst’s have 2022 revenue forecast at C$68 million, which if achieved would be a >5 fold increase in 3 years. By that point the Company should also become earnings positive.

The Company sees the potential to grow user numbers as well as to increase the revenue per user. The chart below shows the revenue growth opportunities.


Closing remarks

Enthusiast Gaming mentioned in their latest company presentation that COVID-19 has resulted in an increase in users of 20% across the media platform and a 40% increase on some larger, key sites on the platform, with significant increase in paid for subscriptions across the platform.

A combination of new partnerships and rapid organic growth means Enthusiast Gaming should continue to see rapidly rising revenue as it rides the wave of the gaming and esports boom. This should also mean the point will soon come where profits also begin, and then rapidly rise.

For investors, Enthusiast Gaming offers a great opportunity to buy into a pure play listed gaming and esports stock still in the early stages of growth.

Looking to build the infrastructure to connect the world’s gaming platforms…

You either like Las Vegas, or you don’t. And you either go to Vegas to gamble or you go for the shows….so you say!

The online gambling industry has grown in leaps and bounds over the past decade. Latest figures indicate that in 2017, the size of the online gambling market was almost US$46 billion. It is expected to as much as double by 2024, according to industry research. The internet is not just for streaming movies and porn anymore, with the increase in power and usage of smartphones and tablets.

The online gambling industry is fragmented, presenting an opportunity for consolidation and the usage of new and improved technology. In addition, the shift to a seemingly more favourable regulatory environment could be supportive of significant future growth.

FansUnite is looking to capitalize on this improving environment. Just listed on the Canadian Securities Exchange (CSE: FANS) on May 5, 2020, the company is focusing on technology related to regulated and lawful online sports betting, casino and other related products. “FansUnite is building global infrastructure to connect the world’s gaming platforms through new technology”.

The company is pursuing multiple revenue streams, but all are associated with some form of online betting. Currently, the company’s principal business is operating the McBookie website, offering regulated and lawful online sports betting to the UK market which generates revenue and is marginally profitable. FansUnite is also a provider of technology solutions, products and services in the global gaming and entertainment industries. FansUnite focuses on both the regulated B2C and B2B sales fronts and develops, operates and looks to acquire technology platforms and assets with high-growth potential in new regulated markets or developing verticals.

The board of directors and management of the company are well-experienced in the fields of traditional sportsbook management as well as casino and gaming and data analytics – people are always a key asset.

Is there downside risk? Of course. Online betting requires events to bet on – the current global shutdown makes that a problem and eSports is still a developing industry. Online betting IS prohibited from Canada and illegal in the US, limiting market penetration. The company is looking to offer the potential of a cryptocurrency-based sports book in a cryptocurrency market which is volatile and problematic.

On the positive side, FansUnite has a head start with its management and existing product line. The company is looking for strategic acquisitions and launching new B2B clients in 2020 as well as obtaining a UK Gaming License, none of which are assured. The question is will this be enough as the online gambling and gaming industry grows.