Gaming and eSports ETFs
In a bilateral benefit, implementation of blockchain technology could help further gaming’s cause as the image of the typical sport jock lifting weights and participating in locker room banter may soon be replaced by the quick-thinking, button-pushing video gamer as competitive video gaming, or eSports, is positioning itself to become a disruptor in traditional media and entertainment. ETFs like the VanEck Vectors® Video Gaming and eSports ETF (NYSEArca: ESPO) are looking to capitalize on this market share.
ESPO seeks to track the performance of the MVIS® Global Video Gaming and eSports Index (MVESPO). The index is a rules-based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in video gaming and eSports.
The list of companies within the index may include developing video games and related software, streaming services, and/or those involved in eSports events. To be included in the index, companies must generate at least 50% of their revenues from video gaming or eSports, which allows ESPO to have the highest concentration, among U.S.-listed ETFs, of pure play names participating in this fast-growing space.
ESPO will take aim at in industry that is already garnering more interest than traditional sporting events like the MLB and NHL. ESPO will tap into an eSports market share that boasts 380 million people globally and has been experiencing exponential growth in just a short span–40% average growth since 2015.
Additionally, the growth of eSports has also sparked a gush of revenue, which equates to a 175% growth per person since 2014.
“Just a few years ago, talk of sold out stadiums, viewership in the millions, high-profile sponsors, and notable marketing arrangements would have been centered on football, baseball, basketball or hockey. But today, that talk can just as easily be applied to the world of video games and eSports,” said Ed Lopez, Head of ETF product at VanEck. “This is the future of sports and a growth story that is global in scope.”
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