15
WELCOME TO THE OWNER’S BOX: How to Bank 12,000% Gains From the eSports Revolution
WELCOME TO THE OWNER’S BOX:
How to Bank 12,000% Gains From the eSports
Revolution
2
Welcome to the Owner’s Box: How to Bank 12,000% Gains From the eSports Revolution Everyone has a different take on the value of video games.
Maybe you think of them as a maddening time-waster for your kids and grandkids…
Maybe you’ve been living in a bunker since the ‘80s and the term “video games” means nothing to you.
Or maybe, like me, you’re a “gamer” yourself.
When I was a kid, it was way more fun to stay home and play video games than go to school. I’d hunker down in my room and play low-resolution games like Ultima and Doom all day.
The image above is an example of what I’d be staring at for hours on end.
I was pretty good at most games I played. But others were tough for me to master.
The thing is, back then, when you were terrible at a video game, it was simply embarrassing.
Fast-forward 30 years, though, and the stakes are much, much higher.
Because video games aren’t just played at home anymore.
Thanks to the super fast internet speeds and advanced technology, gam-
3
ALTUCHER’S INVESTMENT NETWORK
ing has become a multi-billion-dollar industry (more on this below).
In fact, it’s now considered an international sport.
That’s right, eSports, or “electronic sports” is quickly becoming one of the most popular sports in the world.
Only there are no fields or traditional stadiums.
Everything happens in a virtual environment.
It sounds crazy, but the casual video gaming that I enjoyed as a kid has turned into a lucrative career path for the most talented gamers on the planet.
There’s one gamer — who calls himself Ninja — who makes $1 million a month. All for just commenting on the games while he’s playing them!
Now, if you’re like me, your days of competing against teenage video gamers are over.
But that’s OK. Because gamers aren’t the only ones cashing in on the emerging esports trend.
Indeed, this global phenomenon has sparked new investment opportunities that are minting a whole new set of millionaires in a very short period of time... especially for early investors.
And you don’t need to know a thing about video games.
Consider this...
In 2018 alone, the global gaming market is valued at $138 billion ac-cording to a Newzoo investment analysis. And the momentum is only accelerating...
In two short years, that number is projected to increase to $180 bil-lion, thanks to the continuing global adoption of smartphone gaming.
So the growth is certainly impressive.
4
ALTUCHER’S INVESTMENT NETWORK
But the best part is, YOU have the opportunity to make a quick, easy
fortune on this explosive growth. I’ll show you how in this report.
First, let’s take a closer look at the rise of competitive eSports.
Doing so will underscore how the video game industry is capable of
such staggering growth.
A Worldwide Phenomenon While the word “eSports” might be new to you, it’s already transform-
ing the entire entertainment industry as we know it.
In fact, in terms of interest and money, eSports are already reaching the
same level as the NFL, NBA, MLB, and MLS...
Spectators fill large stadiums or huddle around their TVs, shouting for
their favorite teams to win.
That’s right. People are paying to WATCH other people play video
games. It seems wild, but the eSports industry is nothing short of a
revolution.
Take a look...
5
ALTUCHER’S INVESTMENT NETWORK
This is a photo of the eSports League of Legends World Championship in Seoul, South Korea. As you can see, the arena was jam-packed.
Over 40,000 raging fans gathered to watch these electronic gaming combatants duke it out...
Just think about that.
That’s more than the average number of people in attendance at an NBA game.
And that photo wasn’t taken recently. That was five years ago.
Indeed, this is a mega business in South Korea.
Over half of South Korea’s 52 million people play eSports.
That’s 28.9 million gamers.
The combination of its ultra-fast broadband technology, dynamic internet culture, and youthful population kick-started professional electronic gaming that we now call eSports.
According to VentureBeat, Korea’s online gaming market grew by 15% between 2014 and 2016 — reaching $76.2 million.
And in 2018, Koreans spent nearly $6 billion on gaming, making it the fourth largest gaming market in the world.
6
ALTUCHER’S INVESTMENT NETWORK
In South Korea today:
• The top eSports players are treated like celebrity athletes are in America
• The top players make millions in prize money
• The best and brightest students aim for professional electronic gaming as their career path... over finance or medical sciences.
But that’s nothing compared to what’s happening in China.
There are 620 million registered eSports players in China. They spent $38 billion in the industry in 2018.
During the most recent League of Legends Mid-Season Invitational, the audience reached 127 million.
That’s equal to the entire population of Japan.
Are you beginning to see just how big a deal this industry is becoming?
And while the Asian video game market is what really kick-started this industry, it’s quickly becoming a major business in the United States as well.
Celebrity Sells: How to Start a Trend 101 Mariah Carey, Shaquille O’Neal, Jennifer Lopez, Steve Aoki, Alex Ro-driguez, and my buddy Mark Cuban all have a few things in common — they’re famous, they’re wealthy, they’re talented…
And they’re ALL eSports investors.
Clearly these are all very connected people, so they’re privy to new investing trends before anyone else.
But now that you’re part of my Network, you’re connected too!
Mark Cuban, owner of the Dallas Mavericks and Shark Tank investor, was on my podcast in 2014.
7
ALTUCHER’S INVESTMENT NETWORK
And he’s someone who is seeing the growth in eSport firsthand.
He experienced it personally with his eSports team League of Legends (LoL) in a celebrity match in California four years ago.
Cuban and Intel CEO Brian Krzanich played on opposing LoL teams at the Intel Extreme Masters tournament in San Jose.
The match was to raise money for charity, but Cuban also managed to raise awareness about the viability of eSports. He says,
“It’s like playing five-dimensional chess against the world. It’s one of the smartest games I’ve ever played. You’ve gotta have dexterity, you gotta be quick. This is a real sport, and people are going to figure it out real quick.”
And he’s not the only one who’s gotten wise to the power and presence of eSports.
The eSports phenomenon is spreading to mainstream sports as well.
This year, every NFL franchise will have its own eSports team to com-pete in the hit video game Madden NFL.
The NFL says it is “the only North American sports league to commit all its franchises to competitive gaming.”
And it’s making the competition interesting with “the largest individu-al tournament prize-pool in Madden’s 30-year history.”
The winning team will receive $700,000.
Robert Kraft, owner of the New England Patriots, one of the most successful sports franchises in the world, just paid $20 million for an eSports team. So did Stan Kroenke, owner of the Los Angeles Rams.
And the NBA is following the NFL’s lead.
Twenty-one NBA teams now have their own eSports teams to compete in the NBA video game, NBA 2K. The association is even hosting a draft for 102 new “NBA players.”
8
ALTUCHER’S INVESTMENT NETWORK
Even former professional athletes are involved. Veteran NBA players
Rick Fox and Jeremy Lin own — and personally train — their own
professional eSports teams.
Check out these teams:
Paris Saint-Germain, West Ham, the Miami Heat, the Boston Celtics, etc…
Each of them has a horse in the eSports race.
Paris and Philadelphia have League of Legends teams. Copenhagen’s
Football Club has a Counter-Strike team.
One question you might be asking...
Why are money-making machines like the NFL and the NBA bothering
with eSports at all?
These franchises pulled in $14 billion and $7.4 billion respectively last
year.
Simple. They don’t have a choice.
Esports is the first large-scale competition these major sports leagues
have had in decades.
And the numbers back it up.
98.2 million people watched the 2019 Super Bowl.
9
ALTUCHER’S INVESTMENT NETWORK
99.6 million watched the League of Legends World Championship 2019.
They know they need to adapt with the times, or miss out on the revenue explosion eSports is creating.
That’s why we’re jumping on board too.
But that raises another question: What are the best ways to invest in the industry before the momentum really takes off?
To answer that question, we need to explore a major problem that the eSports industry currently faces.
What’s Missing for Complete Global Domination?When you’re playing hockey, you want the ice to be smooth.
If you’re playing football, you want the ball to be properly inflated.
If you’re playing soccer, you want the lines to be even and the goals to be the same size.
But think about when the match is taking place in cyberspace. As you could imagine, players face an entirely new problem.
Internet speeds.
The recommended internet speed for most massive multiplayer games is 6 megabytes per second (Mbps).
For comparison, you only really need 3 Mbps to stream Hulu or Netflix.
Games like Fortnite, Overwatch, and League of Legends consume more bandwidth than any other application on network.
And players aren’t the only ones impacted by internet speeds.
Spectators rely on fast speeds as well.
Imagine tuning in to watch a tournament, and all you can see is a frozen screen. You’d be much less likely to tune in next time, right?
10
ALTUCHER’S INVESTMENT NETWORK
Clearly, losing spectators would be a complete nightmare for the eSports industry.
Because fewer eyeballs watching the game means fewer advertisers paying the bills.
As with any high-stakes, publicized sport, advertising and sponsorship are vital to the successful operation of eSports.
Take a look at the chart above. Brands are projected to spend $800 million on eSports this year alone.
Advertising dollars have been on a steep uptrend for years. To keep that momentum going, it’s critical that the industry ensures internet speeds are humming along at lightning speeds at all times.
Luckily, there’s a little-known networking company that could help provide the industry with exactly what it needs to keep these games running at full speed.
The Company the eSports Revolution NeedsExtreme Networks, Inc. (NASDAQ: EXTR) is based out of San Jose, California.
It’s a small-cap company with a market cap of $908 million. It was founded in 1996, but chances are, you haven’t heard of it before.
11
ALTUCHER’S INVESTMENT NETWORK
That’s because it’s stayed out of the spotlight for years. But I believe that’s about to change, thanks to its new technology that will be cru-cial to eSports moving to the next level of growth.
Now, Extreme Networks is no stranger to the sports world.
It’s the official Wi-Fi and analytics provider for the NFL. Meaning, the company is internationally known for implementing solutions in professional sports stadiums.
And it’s deeply aware of the problem facing the growing eSports industry.
Bob Nilsson, director of vertical solutions at Extreme Networks, explains:
“Every millisecond counts during an esports game, and a robust network is a prerequisite when it comes to preventing potential performance issues, such as connectivity glitches or slow internet connection.”
That’s why the company developed a line of products to solve exactly that problem.
It’s called ExtremeSwitching. Essentially, the technology can allocate and distribute bandwidth to higher need-areas — thus preventing potential catastrophes.
Bob Nilsson continues…
“By deploying our high-density, low-latency network solutions that are used by professional sports venues across the nation, [we can deliver a] seamless, stable connection whether practicing or in the heat of competition.”
Now, while ExtremeSwitching accounts for high-performance connec-tivity, the company also offers support software like Extreme Manage-ment Center and Extreme Control, which help the IT departments affect network activity any time, anywhere.
It also developed ExtremeAnalytics, which allows the client using this service to gather data from users and devices on the network, and to increase visibility.
12
ALTUCHER’S INVESTMENT NETWORK
The best part is, this technology is already proven. In fact, the company has secured some heavy-hitting contracts.
Not only are they renowned for their work with the NFL, they’re also dominating the college eSports market.
Yes - even colleges are launching eSports leagues. And they’ll need an outfitted gaming arena with serious bandwidth capabilities to keep their games running smoothly.
Extreme Networks has already proven it’s up for the challenge…
On its website, Extreme Networks even includes a specific solution section regarding campus connectivity.
Take a look at this picture below…
13
ALTUCHER’S INVESTMENT NETWORK
This is SUNY Canton’s brand new, state-of-the-art eSports gaming area, with high-speed WiFi, management, and analytics capabilities.
When SUNY Canton decided to bake eSports into its program struc-ture, it received 270 applications for its “Game Design & Development Program.” Even students previously considering transferring stayed.
SUNY Canton looked to Extreme Networks — because of its spe-cialized products and its reputation with the NFL — to update its IT infrastructure.
And that’s not all Extreme Networks is doing.
A Strong Edge Over the CompetitionExtreme Networks’ reach extends to education, healthcare, manufac-turing, hospitality, transportation, and logistics, as well as government agencies, private cloud data centers, and universities.
The company’s innovations and solutions have not gone unnoticed…
It started to creep into the spotlight recently for introducing 5G, Wi-Fi 6, and AI-powered networking solutions to the Mobile World Con-gress in 2019…
It teamed up with leading tech innovators at the Healthcare Infor-mation and Management Systems Society (HIMSS) 2019 Intelligent Health Pavilion (IHP) to demonstrate what networking and IoT (internet-of-everything) solutions could do to update hospitals with highly connected, state-of-the-art networking infrastructure…
To top it off, Extreme Networks is the official network and analytics provider for the IHP!
It recently implemented a new on-site energy source that runs on Bloom Energy’s proprietary fuel cell technology.
Why is that important? Well, part of the configuration operates on a microgrid. The uninterrupted electricity supply can’t fail, even if the grid does.
14
ALTUCHER’S INVESTMENT NETWORK
If “advanced networking is the unsung hero of our digital future,” as Deloitte says, then Extreme Networks definitely has an edge on its competition.
Extreme Networks’ share price has jumped 20% in the last few months… which can only be linked to its breakout innovations, contracts, and partnerships.
But I’m convinced that’s just the beginning.
According to the latest analysis, Extreme Networks can expect 187.8% annual growth in earnings. That’s more than 12 times the rate of growth for the communications sector AND the U.S. market average.
But I believe that Extreme Networks has been positioning itself to benefit from several colliding industries, INCLUDING the eSports revolution.
The company has made some very strategic partnerships, developed niche products for clients in all of its areas of operation, and already made some pretty big waves in the industry.
Right now, the stock is trading around $8 per share. That’s a long way off it’s all-time high of $127 per share in 2000.
With that said, we’re going to keep the stock on our watchlist for now. I’m digging in a bit more to consider long-term growth, since that’s the goal at Altucher’s Investment Network.
If you do choose to buy shares of Extreme Networks, we recommend that you allocate no more than 2.5% of the funds you’ve dedicated to this strategy.
We welcome comments, suggestions, and customer service inquiries at [email protected]. You can also call (844)-449-6520. Please note: The law prohibits us from giving personalized financial advice.
© Choose Yourself Media. All rights reserved. Any reproduction, copying, or redistribution of this report, in whole or in part, is strictly prohibited without written permission from Choose Yourself Media. Choose Yourself Media forbids its writers from having a financial interest in any security they recommend. All employees of Choose Yourself Media, other than writers, must wait 24 hours after a recommendation is published before acting on that recommendation.
Choose Yourself Media does not recommend or endorse any brokers, dealers, or advisors. This work is based on SEC filings, current events, interviews, corporate press releases, and our own personal networks. It may contain errors, and you shouldn’t make any financial decisions based solely on what you read here.
