THESCORE'S NEW ESPORTS APP WELL-TIMED FOR EXPANDING MARKET AND DEMAND

The Score Inc.’ s new ESPORTS app, which will cover competitive video gaming, could eventually reach as many users as the company’s flagship sports information app.

Beacon Securities analyst Vahan Ajamian noted that e-sports is a strong and quickly expanding market, with more than 30 million enthusiasts in the U.S and about 71 million globally. It also surpasses conventional sports in several metrics.

“We expect the newborn THESCORE ESPORTS app to exhibit meaningful growth from scratch,” Mr. Ajamian said in a research note.

He believes the company’s strong brand both in Canada and elsewhere can be leveraged to attract users and secure larger advertising contracts.

The analyst also noted that theScore should benefit from a first-mover advantage as there is no meaningful competition in the e-sports sector.

Mr. Ajamian highlighted forecasts for e-sports online advertising to grow at a compound annual rate of 28% in the next several years. Combine that with expected growth of 33% for U.S. mobile ad spending and 56% for daily fantasy sports, and theScore is poised to benefit from being in several high-growth industries.

The app will initially provide coverage of North American, European and Korean gaming leagues, including popular gaming titles such as Call of Duty, StarCraft II, League of Legends, CounterStrike and Dota 2.

“ESports [the sector] have been established in Asia for some time; however, we believe it is quickly gaining momentum in the West,” Mr. Ajamian said, adding that online ad revenue for the sector was estimated at US$32.8 million in 2013.