Bet on These Video Gaming ETFs to Gain From Surging Sales

·5 min read

The video game industry continues to thrive amid the ongoing health crisis. For nine months, the total consumer spending on gaming is up 12% year over year to $42.28 billion. It is impressive to observe that the video gaming industry is witnessing strong sales growth despite tough year-over-year comparisons, highlighting the strength in the space.

Video Game Sales Keep Rising

Recently-released data from The NPD Group emphasizes that the video game industry, including packaged media, digital, consoles and accessories, witnessed robust sales in September, with people spending $4.36 billion in all, reflecting 3% growth year over year.

Hardware spending surged 49% in September to $412 million, led by a wider distribution of new-generation consoles from Microsoft and Sony, per the same NPD Group report. Spending on consoles jumped 49% year over year to $3.41 billion in the year-to-date period. After ruling the chart for 33 months in unit sales, Nintendo’s NTDOY Switch was behind Sony’s SONY PlayStation 5, which dominates the charts in terms of dollar sales and unit sales in September.

In this regard, Mat Piscatella, executive director of games at NPD, commented that “33 months in a row for Switch was remarkable. And this month we had a significant influx of new PlayStation 5 inventory coupled with a Switch assortment that was being transitioned to focus more on the OLED model,” according to a GameDaily article.

Spending on content that includes physical and digital full game, DLC/MTX console, cloud, mobile, portable, PC and VR platforms remained flat at $3.78 billion on a year-over-year basis. Year-to-date sales rose 10% to $37.11 billion.

Titles like Madden NFL 22, FIFA 22, NBA 2K22, Tales of Arise and Diablo II: Resurrected were among the top-five best-sellers in September.

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.

Staying optimistic about the market prospects, Mat Piscatella has said that “Massive opportunity continues to exist for those companies that can get games, hardware, and accessories into the market in the short term. I'm becoming more optimistic on consumer demand for the fourth quarter, and there are at least some signs that supply may start inching up to help meet it. We’ll see.” This was mentioned in a GameDaily article.

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 37 stocks in its basket. With AUM of $72.8 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 $655.2 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 $506.7 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 116 stocks in its basket. With AUM of $107.3 million, the fund charges 75 bps in expense ratio (read: 5 Bargain ETFs to Tap Renewed Tech Strength).


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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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