Bet on These Video Gaming ETFs to Ride the Surging Sales Trend


You’re reading Entrepreneur United States, an international franchise of Entrepreneur Media.

This story originally appeared on Zacks

Video gaming lovers in the United States have spent generously in October again. The industry continues to gain amid the health crisis. For 10 months, the total consumer spending on gaming is up 12% year over year to $46.67 billion (per The NPD Group data). Market experts are optimistic about the strength that the video gaming industry is witnessing in the terms of solid sales growth despite tough year-over-year comparisons, highlighting the momentum in the space.

– Zacks

Going on, 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 video gaming ETFs like The Roundhill BITKRAFT Esports & Digital Entertainment ETF NERD, VanEck Video Gaming and eSports ETF ESPO, Global X Video Games & Esports ETF HERO and Wedbush ETFMG Video Game Tech ETF GAMR, which have a high probability of gaining from the trend.

Video Game Sales Rise Again

Recently-released data from The NPD Group emphasizes that the video game industry, including packaged media, digital, consoles and accessories, witnessed robust sales in October, with people spending $4.39 billion in all, reflecting 16% growth year over year.

Hardware spending surged 82% in October to $472 million, led by a wider distribution of new-generation consoles from Sony SONY, per the same NPD Group report. Spending on consoles jumped 53% year over year to $3.88 billion in the year-to-date period. Rising on the popularity of Switch OLED models, Nintendo’s NTDOY Switch-dominated Sony’s PlayStation 5, in terms of unit sales in October (per a GameDaily article). However, the latter won in terms of dollars sales.

Spending on content that includes physical and digital full game, DLC/MTX console, cloud, mobile, portable, PC and VR platforms jumped 11% to $3.76 billion on a year-over-year basis. Year-to-date sales rose 10% to $40.87 billion.

Titles like Far Cry 6, Back 4 Blood, Madden NFL 22, FIFA 22 and Demon Slayer: Kimetsu no Yaiba: The Hinokami Chronicles were among the top-five best-sellers in October. Notably, Far Cry 6 has stood out to be the 8th best-selling title of the year (per the GameDaily article).

Game developers continue to innovate and attract users every day 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. Mergers and acquisitions continue to support the gaming space. November’s report on the space can see some major launches of fresh titles like Call of Duty Vanguard, Forza Horizon 5, Pokemon Brilliant Diamond and Shining Pearl, and Shin Megami Tensei V, which can further provide a boost to the industry (according to the GameDaily article).

Staying optimistic about the market prospects, experts are looking forward to the holiday season numbers that can see increasing sales for gifting purposes. Although the new cases from the Delta-variant are declining, an increasing number of people have started enjoying video games at the comfort of their homes. Therefore, the trend is likely to gain traction amid the holidays as well.

Video Gaming ETFs to Keep Gaining

Investors can consider the following video gaming ETFs:

The Roundhill BITKRAFT Esports & Digital Entertainment ETF 

The Roundhill BITKRAFT Esports & Digital Entertainment ETF 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.

NERD holds 37 stocks in its basket. With AUM of $74.6 million, The Roundhill BITKRAFT Esports & Digital Entertainment ETF charges 50 basis points (bps) as expense ratio (read:  Gaming ETFs to Gain Post Apple-Epic Games Ruling).

VanEck Video Gaming and eSports ETF

VanEck Video Gaming and eSports ETF 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.

ESPO holds 26 stocks in its basket. With AUM of $671 million, VanEck Video Gaming and eSports ETF charges 55 bps as expense ratio (read:  Nvidia ETFs in Focus Ahead of Q3 Earnings).

Global X Video Games & Esports ETF

Global X Video Games & Esports ETF 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.

HERO holds 40 stocks in its basket. With AUM of $498 million, Global X Video Games & Esports ETF charges 50 bps as expense ratio (read: How Are Activision ETFs Reacting to Q3 Earnings Results?).

Wedbush ETFMG Video Game Tech ETF

Wedbush ETFMG Video Game Tech ETF 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.

GAMR holds 116 stocks in its basket. With AUM of $109.4 million, Wedbush ETFMG Video Game Tech ETF charges 75 bps in expense ratio.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.

Get it free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free 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
 
To read this article on Zacks.com click here.
 
Zacks Investment Research



Source

Leave a Reply

Your email address will not be published. Required fields are marked *