October 22, 2021

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Gaming ETFs to Keep Shining Bright Amid Surging Sales


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This story originally appeared on Zacks

The video game industry continues to surprise investors with the consistent strength in sales amid the ongoing health crisis. The total consumer spending on gaming for eight months is up 13% year over year to $37.9 billion, per The NPD Group report. What impresses more is that the video gaming industry is delivering robust growth despite tough year-over-year comparisons, highlighting the true strength in the space.

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Video Game Sales Keep Soaring

Recently-released data from The NPD Group emphasizes that the video game industry, including packaged media, digital, consoles and accessories, witnessed robust sales in August with people spending $4.37 billion in all, reflecting 7% growth year over year.

Hardware spending surged 45% in August to $329 million, led by wider distribution of new-generation consoles from Microsoft MSFT and Sony, per the same NPD Group report. Spending on consoles jumped 49% year over year to $3 billion in the year-to-date period. Nintendo’s NTDOY Switch continues to be the top-selling console in terms of units sold for August and year to date, per a GameDaily article. Meanwhile, Sony’s SONY PlayStation 5 dominates the charts in terms of dollar sales in both the periods.

Spending on content that includes physical & digital full game, DLC/MTX console, cloud, mobile, portable, PC and VR platforms increased 5% on a year-over-year basis to $3.88 billion. Year-to-date sales rose 11% to $33.33 billion. Meanwhile, accessories spending remained flat in August at $164 million, per the same NPD Group report. Moreover, there was a 12% rise in accessories sales to $1.59 billion in the year-to-date period.

Titles like Madden NFL 22, Ghost of Tsushima, Call of Duty: Black Ops: Cold War, Humankind and Marvel’s Spider-Man: Miles Morales were among the top-five best-sellers in August.

Game developers are continuing to innovate and attract users every day and also retain the old ones. They are increasing engagement for existing players by providing new titles, levels, arenas or environments as the games require at regular intervals. Mergers and acquisitions continue to support the gaming space.

Video Gaming ETFs to Keep Gaining

It seems that the boom in the video gaming space may remain even in the post-pandemic era as the outbreak changed the lifestyles and preferences of U.S. citizens to a large extent. Against this backdrop, investors can take a look at the following video gaming ETFs:

The Roundhill BITKRAFT Esports & Digital Entertainment ETF NERD

The fund is designed to offer investors exposure to esports & digital entertainment by providing investment results that closely correspond, before fees and expenses, to the performance of the Roundhill BITKRAFT Esports Index. It holds 35 stocks in its basket. With AUM of $77.6 million, the fund charges 50 basis points (bps) as expense ratio (read:  Gaming ETFs to Gain Post Apple-Epic Games Ruling).

VanEck Video Gaming and eSports ETF ESPO

The fund aims to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS Global Video Gaming and eSports Index, which is intended to track the overall performance of companies involved in video game development, esports and the related hardware and software. It holds 26 stocks in its basket. With AUM of $703.7 million, the fund charges 55 bps as expense ratio (read:  Sports Betting ETFs Set to Soar on NFL Wagers).

Global X Video Games & Esports ETF HERO

The fund looks to invest in companies that develop or publish video games, facilitate the streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues or produce hardware used in video games and esports including augmented and virtual reality. It holds 40 stocks in its basket. With AUM of $551 million, the fund charges 50 bps as expense ratio (read: Thematic ETF Investing: What You Should Know).

Wedbush ETFMG Video Game Tech ETF GAMR

The fund provides pure-play and diversified exposure to a dynamic intersection of technology and entertainment. It also corresponds generally to the price and yield performance of the EEFund Video Game Tech Index.  The index is designed to reflect the performance of companies involved in the video game technology industry, including game developers, console and chip manufacturers as well as game retailers. It holds 135 stocks in its basket. With AUM of $107.4 million, the fund charges 75 bps in expense ratio (read: 5 Bargain ETFs to Tap Renewed Tech Strength).

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Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Global X Video Games & Esports ETF (HERO): ETF Research Reports
 
Nintendo Co. (NTDOY): Free Stock Analysis Report
 
Wedbush ETFMG Video Game Tech ETF (GAMR): ETF Research Reports
 
VanEck Video Gaming and eSports ETF (ESPO): ETF Research Reports
 
Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD): ETF Research Reports
 
Sony Corporation (SONY): Free Stock Analysis Report
 
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