The World’s Fastest Growing Sport
Plus: The Hungry Jack's and McDonald's Feud
Hi,
Welcome to The Ramble, a weekly newsletter covering the stuff you should know surrounding Australian business, tech, and investing. If you’d like to sign up, you can do so here. Or you can just read on…
In this article, we explore the booming esports and gaming industry including an interview with Chris Smith, an Aussie gaming expert. We also cover the Hungry Jacks vs McDonald’s debacle.
In case you missed last week’s edition you can find that here.
Anyway, here’s today’s stories…
Gaming Galore
The gaming and esports industry is one that has managed to thrive through the pandemic.
Video game consumption has gone up 75% since early this year and doesn’t look to slow down anytime soon, with esports now being the fastest growing sports segment in the world.
Huge prize pools and endless hours of entertainment (plus being locked indoors all day) is attracting more and more people into esports and it’s predicted that by 2021 the number of active gamers worldwide will reach over 2.7 billion. That’s waaay more than the world’s most popular sport, soccer.
Aussies are entering the game
People down under are starting to recognise the huge opportunities in gaming and with 68% of Australian’s playing video games, the esports market has massive untapped potential.
Places like Monash University are developing their own esports programs and Perth has just announced funding of $360 million to go towards building its own esports stadium. New doors into the industry seem to be opening on a regular basis…
Australia has just welcomed its first video game and esports ETF
Aussie’s who want to back the massive growth in the gaming industry now have access to 25 gaming stocks bundled into one fund.
Hitting the ASX last Thursday, the VanEck Vectors Video Gaming and eSports ETF (ASX:ESPO) has holdings in global companies with over $5 trillion in market cap. Some of its top holdings include Tencent and Nintendo.
Could ESPO be the perfect way for Australians to get a piece of this booming market?
Q & A With an Australian Gaming Expert
Chris Smith is a consultant in the gaming community and the director of BIG eSports.
I recently spoke with Chris to find out more about the opportunities in eSports:
Have you invested in the gaming market? If so, in what way?
Yes, all of my professional life from 18 onwards. I’ve invested with my time and by building my company BIG eSports.
How does the Australian gaming and e-sports market compare with the rest of the world?
The Australian market is 5ish years behind the US.
Our consumer profile is extremely similar. We enjoy the same products, games, and marketing. Our influencer and games market is extremely advanced, but esports is infant and growing…slowly.
What trends do you believe will emerge (or are emerging) in the industry?
One word: crossovers
The crossover between gaming & esports (influencers)
The crossover between traditional influencers & esports (Ben Simmons into FaZe)
The crossover between traditional sports & esports (especially looking at things like F1).
What do you think is the most promising platform to accommodate esports?
Twitch is currently the number one platform for gamers, however, Youtube is hot on their heels.
How do you think the average Australian consumer will benefit from the growing esports and gaming industry?
Just like growth in F1 created many new innovations in our cars, such as paddle shifting, growth in esports makes for innovation surrounding our tech products. Especially in things like mice, graphics cards, headsets, CPUs and monitors.
Quick Bits
Facebook has started offering Small Business Grants in Australia.
The unemployment rate isn’t as bad as expected, despite struggling Victoria.
JobKeeper cuts could rip $9.9 billion out of the Aus economy.
Burger Wars: Big Jack Bites Back
Australian burger chain, Hungry Jack’s has hit back at McDonald’s, after Maccas filed a lawsuit against them.
In their most recent campaign, HJs launched their new burger the ‘Big Jack’ which sounds and looks a whole lot like the infamous ‘Big Mac’ burger. The ad clearly rubbed the people at McDonald’s HQ the wrong way as they quickly tried to sue Hungry Jack’s, claiming that they ‘deliberately imitated’ their beloved burger.
Hungry Jack’s don’t seem to be too worried
McDonald’s may have played right into the Australian burger chain’s hands, as they used the lawsuit as fuel for another Big Jack ad.
In the cheeky follow-up commercial, Hungry Jack’s lapped up their newfound attention, pointing out that “They reckon Aussies are confusing the Big Jack with some American burger. But the Big Jack is clearly bigger with 25 per cent more Aussie beef, flame-grilled with a barbecue taste.”
While there are no figures on sales since the launch of this ad, the fast-food spotlight has clearly shifted towards Hungry Jack’s, with many people siding with the Aussie chain.
Why does this matter?
The Australian fast food industry is massive with Australians eating out - or ordering in - at an average of two to three times a week (more than 50 million meals per week).
Despite Australian’s becoming more health conscious, fast food is expected to steadily grow, with outlets continuing to roll out across the country.
The below graph shows Australian’s preferences for fast food:
Clearly, McDonald’s is dominating with over 30% of Aussie’s favouring their grub.
With heavy competition, food businesses are looking to steal market share wherever they can. It seems likely that this is exactly what Hungry Jack’s have tried to do in this recent debacle.
Is it possible that Hungry Jack’s newfound attention could swing the fast-food market their way?
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Thanks for reading, and see you next Monday!