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ValueTheMarkets News Commentary - With the gaming market projected to expand from $178bn to $267bn between 2021 and 2025, well-positioned service providers to this industry could reap the benefits. This article discusses the issue with reference to Apple Inc (NASDAQ: AAPL), NVIDIA (NASDAQ: NVDA), Amazon (NASDAQ: AMZN) and ESE Entertainment (TSXV: ESE) (OTCQX: ENTEF).
ESE Entertainment (TSXV: ESE) (OTCQX: ENTEF) is an entertainment and technology company focused on gaming and esports. In particular, the business is concerned with player acquisition services and the creation and distribution of digital content.
In short, the company are experts in programmatic marketing for the videogames industry.
With its targeted programmatic campaigns, the business is clocking up more than 7.3 billion impressions and sourcing 500,000 new players each month using its sophisticated technology.
These figures have helped attract the attention of some of the biggest names in the industry and seen ESE Entertainment source legions of players for their games.
For example, projects for Roblox and Game of Thrones: Winter is Coming helped bring in 3.6 million and 2 million new players respectively.
On the back of these successes, ESE Entertainment has just announced a US$5m contract to deliver its technology and user acquisition services to a major European video game developer and publisher who is a new customer for the business.
The company’s CEO, Conrad Wasiela, commented:
“This is yet another example of us executing and securing new long-term multimillion dollar contracts for our gaming technology.
“We are keenly focused on increasing sales and improving margins, and we believe landing larger technology contracts is the key to achieving these goals. We are excited to continue updating current and future shareholders with new developments at ESE.”
It’s the latest update following a slew of positive news from ESE Entertainment, with its recent record-breaking third quarter financial earnings showing 276% revenue growth to CA$15.9m. Gross profit soared too, climbing by 595% to CA$3.1m after the business signed 25 new deals so far this year.
The business will be hoping that its customer acquisition expertise and technology will make it a key partner for major developers in the coming years.
Apple Inc (NASDAQ: AAPL) designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories. The company also offers payment, digital content, cloud and advertising services. The business’ customers are primarily in consumer, small & mid-sized business, education, enterprise and government markets worldwide.
A key way in which Apple Inc is poised to enjoy the gaming boom is through its App Store. The platform is already a major money-spinner for the tech giant and it reportedly features more than one million games alongside other applications.
The company has confirmed that it is hiking prices on the App Store platform though, noting that a “slower economy” has impacted revenues. Additionally, the platform is becoming more ad-heavy as Apple Inc looks for more ways to increase revenue.
While the company has a tight grasp on consumers through the popularity of its iPhones, it seems like these changes to its mobile gaming platform could hurt its popularity among both gamers and developers.
Additionally, while Apple Inc’s iPhone is still enormously popular, the business appears to have had some issues with sales of its new model. Late September saw Bloomberg report that the company was shelving plans to hike production of the iPhone 14 after initially overestimating demand.
The business will be hoping that this is merely a blip and not an indicator that its products are losing their appeal.
Nvidia (NASDAQ: NVDA) designs, develops and markets three-dimensional graphics processors and related software. The company offers products that provide interactive 3D graphics to the mainstream personal computer market.
The primary way in which this business enjoys exposure to the videogames industry is through its graphics cards, which are present in many gamers’ computers. These include top-of-the-line chips that utilize advance technology like artificial intelligence but can set users back over $1,500 apiece.
In addition to its work on the hardware side of things, Nvidia works with videogame developers through offerings like Omniverse, the company’s real-time design collaboration and simulation platform.
The idea behind Nvidia’s software is that it can help artists and designers enjoy more seamless collaboration within the development process as gaming industry progress leads projects to become increasingly complex and challenging.
But the omniverse platform is just one of many software applications developed by Nvidia for use by game developers. The company’s expansive suite of game development tools include applications for simulation, asset processing, lighting and 3D creation platforms.
The business will be hoping that continued growth in gaming industry revenues will bleed through to both its hardware and software development offerings.
Jeff Bezos’ Amazon (NASDAQ: AMZN) is an online retailer that offers a wide range of products, including books, music, computers, electronics and numerous other products. The business offers personalized shopping services, Web-based credit card payment and direct shipping to customers. The company also operates a cloud platform offering services globally.
While Amazon is perhaps best known for its ecommerce and video streaming service offerings, the company also offers services for videogame development. These come through Amazon Web Services (AWS), the business’ cloud computing platform.
The company has boasted that its AWS for Games solution will help developers build, run, and grow their games through dedicated solutions for cloud game development, game servers, game security and more besides.
The dedicated gaming offering, which Amazon announced the launch of in March 2022, could be very successful as the company claimed in its most recent earnings that AWS is already the most broadly adopted set of cloud infrastructure services.
While the business now has tools on offer for other game developers, the business has also tried its hand at creating games itself. Increasingly ambitious titles from the Amazon Games subsidiary have included New World and Lost Ark.
Things haven’t all been plain sailing at the game studio though, with reports last year suggesting workers at the studio faced “draconian” limitations on their own personal projects.
ValueTheMarkets News Commentary
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