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A Comprehensive Guide to Video Gaming ETFs

After witnessing a huge rise in revenues and showing great growth prospects, the video game industry lost a little momentum post pandemic. However, it still remains an area showing great potential for growth in the future.

Game developers continue to innovate and attract users daily and 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.

A recent report from The NPD Group, highlights that consumer spending on video game hardware and content fell 5% in 2022 as compared to 2021. Still, spending totaled $56.6 billion. PlayStation 5 led the sales of consoles, while Nintendo Switch was the leader in hardware unit sales. Call of Duty: Modern Warfare 2 stood out as the best-selling video game of 2022.

ESports                                                                    

ESports, short for electronic sport, captures the experience of watching a professional sporting event, but viewers watch video gamers compete against each other. It has gained widespread popularity recently with many games being viewed at an organized arena, with EA Sports’s Madden NFL being one of the most popular games of 2022.

Per a report published on Yahoo Finance, the global eSports market size is likely to expand by $3.5 billion till 2027, at a CAGR of 21.81%. With the eSports market currently valued at $1.4 billion, the segment is seeing a rising trend in generating advertisement revenues, with companies like Red Bull and Monster Energy increasing their presence.

However, the growing consumer demand for quality enhancement and better in-game experience has raised the cost of game development, cutting back the growth of the market.

Metaverse to Push Gaming Craze

The major players in the video-gaming space are spending on innovative gaming-content creation and revolutionary new technologies as cloud-based gaming systems, increasing mobile offerings and a solid social media presence are expanding player communities and bringing them closer. In fact, among various metaverse applications, gaming stands out to be very popular.

Going by a GlobeNewswire report, the Global metaverse in the gaming market is set to excel the projected estimates of $663.8 billion by 2030, at a CAGR of 37.85%. Increasing adoption of Virtual Reality and Augment Reality continues to boost the growth prospects and revenues of the market by enhancing the gaming experience for users.

Video Game ETFs to Track

It seems as if the video-gaming market will continue to grow, given the bright prospects and innovation possibilities. According to Entertainment Software Association (ESA), the gaming industry market saw consumer spending reaching $56.6 billion in 2022.

Against this backdrop, investors can take a look at the following video-gaming ETFs:

Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD)

The Roundhill Video Games ETF offers investors exposure to the video game sector by providing investment results that closely correspond, before fees and expenses, to the performance of the Nasdaq CTA Global Video Games Software Index. The fund gained 3.75% in the year-to-date time frame. NERD holds 38 securities in its basket, with Nintendo Co Ltd NTDOY being the top company weighting 15.75% of the assets.

The fund gathered $25 million in its asset base and charges 50 bps in annual fees. It trades in an average monthly volume of about 6,500 shares.

VanEck Video Gaming and eSports ETF (ESPO)

The VanEck Video Gaming and eSports ETF seeks 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 related hardware and software. The fund has 26 securities in its holdings, with NVIDIA Corp NVDA and Tencent TCEHY being the top two holdings.

VanEck Video Gaming and eSports ETF amassed $260.9 million in its asset base. It charges 56 bps as its annual fees and has an average monthly trading volume of about 32,000 shares. The fund has gained 10.26% year to date.

Global X Video Games & Esports ETF (HERO)

The Global X Video Games & Esports ETF seeks to provide investment results that generally correspond to the price and yield performance, before fees and expenses, of the Solactive Video Games & Esports Index. The basket has 54 securities, with top companies like Activision Blizzard and Nintendo Co Ltd having spots in the top 10 holdings. HERO has earned 5.38% year to date.

The fund has been able to manage $155.3 million in its asset base, charging 50 bps in annual fees. It has an average monthly trading volume of about 64,000 shares.

Wedbush ETFMG Video Game Tech ETF (GAMR)

The Wedbush ETFMG Video Game Tech ETF seeks to provide investment results that correspond 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, and game retailers. It holds a basket of 88 stocks.

The fund has gathered $ 51.9 million in its asset base and charges 75 bps in annual fees. It has an average monthly trading volume of about 5,700 shares. GAMR is up 5.99% in the year-to-date time frame.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Tencent Holding Ltd. (TCEHY) : 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 Video Games ETF (NERD): ETF Research Reports

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