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With one of the fastest-growing fan bases in the entire entertainment industry…

A global audience that’s already bigger than many traditional sports leagues…

And players that are becoming overnight millionaires…

Esports have officially arrived.

But some think this is just the beginning.

For one, fans are already spending more time watching gamers than HBO, Netflix and Hulu – combined.  More than that, however, the industry still in its early days…

That’s why even media masters like Tom Rogers are getting involved.  

He was the CEO of TiVo before creating CNBC and then bringing both Netflix and Amazon to our screens…

Now, he believes the future of the media industry is in gaming.

That’s why he’s bringing his company, WinView Games, together with Frankly Media and Torque Esports (TSX.V:GAME, OTCMKTS:MLLLD) in a mega-merger that could send ripples throughout the industry.

And he’s not alone.

Over 400 of the smartest angel investors, venture capital firms and accelerators have already joined the race.  

Here are three trends everyone needs to know about the esports race:

#1 – The Streaming Wars Are Heating Up

Just last year, viewers spent over 6.6 billion hours watching their favorite players online.

That’s why Amazon (NASDAQ:AMZN) paid nearly $1 billion to acquire streaming giant Twitch.

Amazon’s Twitch.tv, as the de facto leader in the space, with over 15 million unique visitors per day, has become so engrained in the industry that new video game consoles even have the platform’s streaming functionality built in.

It’s so popular that it accounts for 1.8 percent of peak internet traffic.

Even Microsoft (NASDAQ:MSFT) is looking to get into the game with its acquisition of Mixer, another streaming service.

In fact, eager to get new subscribers, Microsoft paid a rumored $100 million to get Fortnite superstar Tyler “Ninja” Blevins on its platform.

While Amazon and Microsoft face off, however, another company is quietly operating in the shadows of the streaming boom and positioning itself to fill a key role in the industry.

Torque (TSX.V:GAME, OTCMKTS:MLLLD) has already made a name for itself in the esports world with its involvement in events, development and hardware production, but thanks to its acquisition of Stream Hatchet, it’s now a major player in the data analytics game.

A necessity to any business looking to take advantage of the streaming trend.

Gathering viewer data from platforms like Twitch, YouTube and more, Torque is able to create in-depth reports that help companies improve engagement, and in turn, profits.

The best way to make serious inroads in this burgeoning new industry is to know exactly what viewers are doing and why they are doing it, and Torque (TSX.V:GAME, OTCMKTS:MLLLD) knows exactly how to take advantage of this information.

Understanding how players interact with the games helped developers create hits like Take-Two’s (NASDAQ:TTWO)  Grand Theft Auto V, which clocks as the third highest selling video game of all time, generating over $6 billion in revenue.

Thanks to the data they’ve collected, they have been able to create entire universes for their player bases, packed with compelling stories and interfaces that truly transport gamers into the world’s they’ve created.

#2 –Big In Asia

Currently South Korea is the place to be for esports in Asia, but China is quickly gaining momentum.

The Chinese government made headlines earlier this year when they officially recognized the roles of “esports professionals” and “esports operators” as official job titles in the country.

Not only that, esports-related majors have been added to many of the country’s national colleges.

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Even entire cities are competing to reel in esports professionals.

Hangzhou, the capital of Zhejiang Province in east China, created a US$280 million, 39.4 million-square-foot, officially designated “esports town” which it hopes will draw in hundreds of millions of dollars in revenue every year.

And one Chinese streaming company, Huya (NYSE:HUYA), is on track to propel this new craze into hyperdrive.  

As a part of its ambitious and aggressive plan to capture its share of the Asian markets, Huya is looking to partner with some of the top teams in the business, and it’s got a massive war chest to help its cause.

The streaming giant is already a force to be reckoned with, but it’s only going to grow from here. 

Another major player in the Asian market is Tencent Holdings (OTC:TCEHY).

The Chinese tech giant responsible for WeChat and QQ has not ignored the video game boom.

Not only is its subsidiary Riot Games responsible for one of the world’s most played esports, League of Legends, boasting over 89 million players, it has also taken significant stakes in other game developers.

Tencent’s portfolio includes shares in Activision, Ubisoft, and even a 40 percent stake in Epic Games, producer of Fortnite.

#3 – Wheelin’ and Dealin’

The growth of the esports craze has led to a number of massive deals in the sector. From Amazon’s billion-dollar Twitch splurge to Tencent’s string of strategic acquisitions, staying ahead of the pack is an expensive – but lucrative – business.

Though Amazon and Tencent might get the most attention in this field, smaller companies like Torque Esports (TSX.V:GAME, OTCMKTS:MLLLD) are making major moves, as well.

Torque, for its part, has made headlines with its acquisitions of Eden Games, a developer whose hit mobile game Gear Club has over 6 million downloads to date, and it’s nearly completed deal which will also give it a major stake in Allinsports, a motorsport simulator manufacturer, founded by ex-Formula 1 engineer Anton Stipinovich.

Torque’s focus on the motorsports niche in esports allowed it to create one of the sector’s most popular  racing events: The World’s Fastest Gamer.

In just the first season of the competitive racing league, with a prize worth $1 million, World’s Fastest Gamer became a global hit.

It was broadcast in 48 countries through 86 global broadcasters, including ESPN, CNBC and Fox Sports. The show, sponsored by McLaren F1, reached an estimated 400 million households.

And it’s wheeling and dealing doesn’t end there. It’s also secured major partnerships with Nintendo and Porsche through its acquisitions.

As an industry, video games have surpassed nearly every other form of entertainment. Revenue has tripled since 2000—rising from less than $50 billion to more than $120 billion per year.

Estimates have the industry doubling again, to $300 billion by 2025.

Other companies to watch as esports take the global stage:

 Enthusiast Gaming (TSX:EGLX.V) is one of the most impressive video game communities on the web. Thanks to it’s aggressive acquisition strategy, it has a web of over 80 websites reaching more than 150 million people every month. It is also making significant moves in the esports arena, hosting wildly attended events in Canada, including the country’s largest gaming expo EGLX. Enthusiast also leverages its reach to provide advertisers with unique solutions across a wide array of publishers.

ePlay Digital Inc. (CSE:EPY) creates technology that helps TV networks, esports teams and leagues and even venues cut through the noise to reach their target audience. The company brings together multiple platforms to create engagement across social media, traditional media, streaming, and more. With a team built from sports, esports, and gaming experts, ePlay knows the video game industry inside and out. That’s why they’ve secured partnerships with companies including Time Warner Cable, ESPN, Sony Pictures, AXS TV, Intel, AXN, Fiat, CBS, Cineplex, and others.

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EXFO Inc (TSX:EXFO) isn’t new to the Canadian tech sector. The company was founded in 1985 in Quebec City, and its original products were portable testing products for optical networks. Since then, the company has acquired and build 3G, LTE, protocol, copper/xDSL, IMS, and VoIP test and service assurance products, all vital pieces of the gaming revolution.

Recent developments from EXFO are promising for long term growth potential. The new baseband unit emulation technology which is sure to be adopted on a large scale, as the tech offers operators a reduction of costs and a faster revenue stream. 

Evergreen Gaming (TSX.V:TNA) has succeeded in bringing back its total debt from $7 million to $5.4 million at the end of December 2018. Its cash flow in the meantime has been relatively steady at $5.8 million, giving lenders reason enough to issue new debt to the company in case it needs it for expansion activities.

Compared to its larger competitors in Nevada and the Great Canadian Gaming Corporation, the company is just a small player, but its focus and returns YTD have been strong, giving investors enough reason to keep an eye on this small but sound player.

Absolute Software Corporation (TSX:ABT) offers endpoint security and data risk-management solutions. And it looks like it’s on a path of securing strong new customers. The pipeline looks great, and forecasts have been increased.

It’s company that stands out a bit due to its backdoor potential. Some of the world’s leading industries trust Absolute with their most important security challenges, and nowhere is that task more essential than in the gaming industry, where so much rides on digital platforms.

By. Nick Hawes

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