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Yahoo Esports Inks Deal with ESL, to Develop New Games

Zacks Equity Research
Updated

In a bid to tap the potential in the emerging esports market, Yahoo! Inc. YHOO recently announced that Yahoo Esports has signed a two-year agreement with ESL, the biggest esports company in the world.   

Popular ESL contests such as the IEM global competitive series and ESL One will be covered by Yahoo Esports. The two companies have also agreed to collaborate on creating new tournaments that will be streamed on Yahoo’s online properties. Moreover, Yahoo Esports will also work on streaming live ESL events in HD so as to make them more popular.

We also note that Yahoo Esports will offer exciting sponsorship opportunities to advertisers as well.

Scope of Esports

Esports, as the name suggests, stands for electronic sports where professional contenders compete with each other and play popular video games. While earlier it was assumed that only actual players would be interested in these events, it's becoming increasingly clear that these games make for good entertainment as well. So acquiring this content for distribution and splitting related advertising revenues are becoming important for online platform owners.

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As per some media reports, it is estimated that the esports market is worth about $892 million and has good growth potential.

We note that after its launch in Mar 2016, Yahoo Esports started covering and streaming major esports events. Moreover, with the emphasis being on live streaming tournaments on mobile devices, the company launched the Yahoo Esports app for both the iOS and Android platforms.

Previously, Yahoo had decided to provide coverage of various esports events only. Now, with the ESL agreement, Yahoo’s is foraying into the development of new tournaments and content. This demands attention of the investing community.

Competition

With esports gradually gaining popularity among the Internet community, other companies are jumping on the bandwagon to have their fair share of the pie. In this regard, we note that in Jul 2016, Twitter, Inc. TWTR also inked a similar deal with ELEAGUE to stream the latter’s live esports events on its platform.

YAHOO! INC Price

YAHOO! INC Price | YAHOO! INC Quote

Zacks Rank

At present, Yahoo! has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology space are Facebook, Inc. FB and LinkedIn Corporation LNKD, each sporting a Zacks Rank #1 (Strong Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
YAHOO! INC (YHOO): Free Stock Analysis Report
 
FACEBOOK INC-A (FB): Free Stock Analysis Report
 
LINKEDIN CORP-A (LNKD): Free Stock Analysis Report
 
TWITTER INC (TWTR): Free Stock Analysis Report
 
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