Baird said video game maker investors remain largely focused on the pace of growth in the console cycle, but are missing several growth opportunities in back-end online monetization, free-to-play recurring revenue streams, virtual reality, and eSports. eSports, which is poised to become a multi-billion dollar business within three to five years, could lead to higher earnings multiples in the sector and incremental earnings for Activision Blizzard (ATVI), Electronic Arts (EA) and Take-Two Interactive (TTWO), according to analyst Colin Sebastian, who has Outperform ratings on Activision and Electronic Arts and a Neutral rating on Take-Two.

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