Online video gaming is a huge part of internet culture. It is a big business, with entire ecosystems built around publishing and merchandising. 

Shares of its major publishers are under intense pressure this fall, but they should come roaring back when risk sentiment improves. 

Last week, the industry put on a tuxedo and celebrated its bright future with an awards show, complete with long speeches, glitzy choreography and spectacle. It was an epic event.

The event showed that in a world shrunk by trade wars and politicos, video gaming is uniquely and unapologetically global.

Game culture is so big in China that young children are developing myopia. Bloomberg reported in September that China's Ministry of Education set guidelines to help parent stop kids from hopping on their smartphones to play games. According to state officials, children should spend 30-40 minutes using electronic products geared toward learning, followed by a 10-minute break for gaming.

The bigger picture is that China has become the biggest consumer of video game culture. It makes sense. In August, the China Internet Network Information Center boasted the country was home to 802 million internet users.

NetEase (NTES) , a leading online community, and Tencent (TCEHY) , the parent company of Epic Games, Riot Games, Supercell and Tencent Games, have built thriving franchises serving a fervent market.

Activision Blizzard (ATVI) , in which Tencent holds a 5% stake, looked east when it sought partners for its Overwatch League, a professional sports league built around the game Overwatch, an online first person shooter game. NetEase became a founding member and fielded the Dragons team in 2017. 

The Overwatch League is built in the mold of a traditional professional sports franchises. It has city-based teams, rich and famous owners, a regular season and playoff schedule, and highly paid athletes grouped into 6-member units.

The widespread appeal, and ramping prospects of video gaming as a spectator sport has attracted a lot of savvy investors. The San Francisco Shock is owned by NRG Sports. Its investors include Shaquille O'Neal and the owners of the NBA Sacramento Kings. The Kraft Group, of the New England Patriots fame, is running the Boston franchise. And the Los Angles Gladiators is owned by Kroenke Sports, the company behind the L.A. Rams, the Denver Nuggets and Arsenal Football Club.

NetEase spared no expense marketing the Dragons. The eSports team has a flashy logo, professional merchandise and a young energetic team. Unfortunately, the Dragons finished 0 for 40 in the 2017 maiden season. But who's counting?

The early investors see big money in video gaming. They are not alone.

In 2015, Amazon  (AMZN)  got into a bidding war with Alphabet's (GOOGL) YouTube for the rights to Twitch, a wildly popular online streaming site. The online retail giant eventually paid $970 million for a website where people congregate to watch others play video games. By January 2018, Twitch had more viewers than CNN.

Felix Arvid Kjellberg, a.k.a. PewDiePie, is a 28-year-old Swede. He owns the most popular channel on YouTube. Kjellberg's gig is color commentating as he streams video gameplay to his 75 million subscribers. The channel has 18.2 billion views. In 2017, PewDiePie earned $12 million playing video games on YouTube.

Ryan Wyatt, global head of gaming and VR, a YouTube Gaming notes that 50 billion hours of gaming videos were viewed on the network during the past year. Venture Beat reports that every day, 200 million people view game content. These are people tuning in to watch other people play video games. And Wyatt says that 2018 has been the biggest year ever for YouTube Gaming.

Online games were big winners at the Game Awards. Red Dead Redemption 2, a Western-themed action adventure game from Take Two Interactive (TTWO)  has become a global phenomenon. It won more trophies than any other title, including best narrative, performance by an actor and best musical score.

The stock is down from $140 in October 2018. The market capitalization has shrunk back to $12 billion. This is a fair price for a company with a large catalog of video game titles, and that trades at only 20x forward earnings.

Consider buying Take Two shares into weakness.

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The author does not own any of the stocks mentioned in thhis article.

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