2. 8. 2019

KGI Bets on eSports Developers

We currently see the potential in esport developers. Krupa Global Investments holds both Electronic Arts and Activision Blizzard shares in its portfolio.

Electronic Arts Inc. (EA) is one of the principal American esports developers, which developed games such as FIFA, NHL, Madden, Battlefield and more recently Apex Legends. The company was not long ago under market pressures when analysts predicted a dwindling number of Apex players at the expense of the more popular Fortnite game.

However, Krupa Global Investments saw this decline as an opportunity considering that the aforementioned franchises of Electronic Arts have a high potential growth and broadly monopoly position in their segment (in particular, FIFA, NHL and Madden). We believe that esports will be at the forefront in the world of sport, as we have seen it in the US in recent years, where it is common for esports tournaments to be attended by 20-30,000 people, similar to a real football match.

EA reported its second quarter financial results on 30 July 2019, which were substantially above the analysts’ expectations, and shares of the company increased by 6 %. Krupa Global Investments holds EA shares in its portfolio and we will continue to maintain our position, as new interesting games await us by the end of 2019, such as FIFA20, Madden20 and a new version of Star Wars. We also hold the shares of Activision Blizzard, which developed games such as Candy Crush, World of Warcraft or Call of Duty.