News Details – Smallcapnetwork
One Small Stock to Own for eSports Growth
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February 2, 2024

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PDT

The idea of a "megatrend" is one we've discussed before. Although economic cycles repeat themselves over and over again, favoring different sectors at different times, a "megatrend" is a once-in-a-lifetime change... an opportunity that's bigger than any economic cycle. Sometimes they're so big they're difficult to recognize. For investors savvy enough to see the writing on the wall though, the reward can be massive. Well, we think we've identified such an opportunity in its infancy right now, and we've uncovered a company that looks like an ideal way to plug into this budding trend. That company? SPYR Inc. (OTCMKTS:SPYR). But first, a closer look at the brand new category of entertainment paving the way for SPYR. Ever heard of eSports? If the global statistics hold up for our readers, the answer for some of you is 'yes,' but for most of you it's 'no.' Everyone needs to familiarize themselves with the term though, because eSports is quickly growing its way into the mainstream and could soon start to displace the world's favorite pastimes like watching professional baseball or football. eSports is professional video gaming. Yes, you read that right - people now get paid to play video games (and some of the top players can make a six-figure incomes). That's not the truly amazing part of eSports though. What's jaw-dropping is the fact that video game enthusiasts will actually pay to watch professional gamers perform their craft, packing crowded arenas to see a live event displayed on a jumbotron. Crazy? We would have thought so too... until we started doing some research and examining the numbers. That's where things got exciting. Last year, the eSports industry generated $493 million worth of revenue in the form of ticket sales, sponsorships, and all the other ways a traditional sports team might monetize itself. It's arguably the first year the business left little doubt it was the real deal, and here to stay. That tally was just the beginning though. Based on the current growth trajectory of the eSports business, video-game market analytics website Newzoo believes the global eSports market will be worth $1.5 billion by 2020. Or if that doesn't do it for you, this will. Last year, the League of Legends eSports championship was the second-most-viewed sporting event in the world. The first was the Super Bowl, and not by a huge margin. Professional sports teams are right to be concerned. The more recent phenomenon is how desperate so many companies are to get into this space. For example, the NBA's Philadelphia 76ers recently acquired an eSports team now called Team Dignitas. (Yep, there's an organized league complete with organized teams, if that tells you anything.) And, a couple of years ago e-commerce giant Amazon.com (NASDAQ:AMZN) spent nearly a billion dollars to acquire a company called Twitch, which simply lets people watch other people play video games online. Then there's the recent success of Pokemen Go, from Nintendo (OTCMKTS:NTDOY), which melded the real world with the gaming world using so-called augmented reality. Nintendo didn't build all of that game itself - much of the technology needed to make the augmented reality game work so well on smartphones was actually garnered through acquisitions. Point being, the big are buying the small as this nascent market starts to shine. As for where SPYR fits into the picture... The name may ring a bell with some of you. We first introduced the company back in April of 2015 when it was just getting into the mobile games business. A lot's changed since then, all of it for the better. In the meantime, SPYR added Plucky Rush to its inaugural game called Plucky, but has also introduced Rune Guardian, Retro Shot, and a space-conquest game called Pocket Starships. It's this last one -- Pocket Starships -- that makes SPYR such an interesting story here. The games played by eSports athletes are not chosen at random on the day of an event. A player or team specializes in one game, and plays it head-to-head against other teams in a tournament-style contest. Ever heard of a game called World of Warcraft, or Halo, or Call of Duty? Those are among the most commonly played video games for eSports tournaments and events. Almost needless to say, it's a big deal for a company when its game is chosen as the proverbial battleground by eSports leagues and teams. In the same sense Tom Brady fans want to wear a Patriots jersey with a #12 on it and go out and play football in the backyard, video game fans want to be like their gaming heroes, playing the same games the pros do, and maybe even getting a chance to challenge the big-leaguers. Of course, having the gamemaker's name linked to a game or event helps them promote their other games as well. Pocket Starships could be the next big eSports playing field, so to speak, if SPYR has anything to say about it. That's the goal anyway. It's worth checking out the website, www.pocketstarships.com, just to see what it is. You may also want to play it. (Warning! It's a rather addictive game.) More important, there's a nuance about Pocket Starships most investors don't fully appreciate. See, unlike any other game out there, Pocket Starships can be played in real-time with multiple players participating regardless of the kind of device each player is using. In other words, a gamer in New York can play on a personal computer, doing battle against a gamer in California who's playing on an Android tablet, who's teamed up with a player in Hawaii using an iPhone.... you get the idea. It's a true cross-platform, real-time, multiplayer video game, and works just as well on all devices. That flexibility makes it appealing to a wide array of gamers, and therefore makes it appealing to a wide number of sponsors. It's very rare to see a game of such quality and depth be that flexible. Only time will ultimately tell to what extent Pocket Starships will penetrate the world of professional eSports market, but given all the upgrades and overhauls SPYR has given the game, it's an encouraging possibility. The kicker: SPYR has been recruiting a massive amount of video game talent of late. Ever heard of Lars Koschin? He's one of the names that helped make a game called 'World of Tanks' into one of the most successful titles of all time. He now works for SPYR. What about Mike Turner? He helped turn World of Tanks into a cash cow as well, though he also spent time with FASA Studios at Microsoft. He now works for SPYR too. Then there's Farshid Almassizadeh -- the former VP and COO of EA Interactive -- who now acts as chief strategic advisor for SPYR. (Yes, EA Interactive is a part of video game giant Electronic Arts.) Almassizadeh could likely write his own ticket wherever he went. He wanted to hook up with SPYR. That should tell you a ton about the company's prospects. With all of that being said, perhaps the most compelling reason of all to consider a stake in SPYR sooner rather than later is the simple fact that this mostly-unknown name is quickly becoming a known name, and investors like what they see. The evidence to that end is the chart of SPYR itself. It's up nearly 400% since March of last year, and is still going strong. The rally's taking a breather right now, but in light of the pattern we've seen SPYR shares form over the course of the past twelve months, we suspect there's another wave of bullishness around the corner. And, after considering SPYR's history and recent press releases and what could potentially be coming in the future, you might not want to wait for the next batch news to come out. Once it does, it may well be too late to jump in at a price you like. Look, you each know how this works by now. Never commit more to a trade than you can afford to lose, use an entry limit if you're going to get in, and use a stop-loss to protect yourself once you're in. The flipside is, you can't reap any reward if you don't take any risk. Bottom line: eSports is growing fast, but most people don't realize how big it's getting, and how big it's already become. Mobile gaming is also still growing fast, and SPYR has more than demonstrated it knows how to make a good mobile game into a great one. The next natural evolution is SPYR's convergence of the two megatrends into one on the heels of Pocket Starships, which is an ideal platform simply because it's so accessible. We'd be very surprised if the game wasn't one of the core eSports arenas in the foreseeable future. We'd also be very surprised if SPYR wasn't eventually acquired, in light of all the other deals being made in the video gaming space lately. Even if SPYR remains independent though, that would be ok too. The World of Tanks game we mentioned earlier? Bloomberg recently reported that franchise is now worth an estimated $1.5 billion, up from essentially nothing just a few years ago. In our opinion, the opportunity is clearly very real.