Esports, or competitive gaming, will be a sector in 2020 that will continue to garner investor interest as the proliferation of viewers will make the industry a multimedia powerhouse. This should be welcome news for the  Global X Video Games & Esports ETF (NASDAQ: HERO) and the VanEck Vectors Video Gaming and eSports ETF (NYSEArca: ESPO).

“There are few current trends in media and entertainment as exciting and fast-growing as esports (an umbrella term encompassing competitive gaming across a number of distinct games),” wrote Jens Fischer—Territory Manager, DACH/Eastern Europe/ME/Japan, Signiant, in Sports Video Group News. “Growing out of the humble origins of arcade tournaments and online-game play-throughs, esports has experienced a meteoric rise recently, although tournaments have been broadcast by such channels as GIGA since the early 2000s.”

The explosive growth of esports could even power the space past traditional sports where revenue generation is now heavily tilted towards enhancing a fan’s multimedia experience.

“Still, the growth that media organizations have witnessed in the past half decade has been immensely impressive.,” Fishcer noted. “In 2018, Newzoo predicted that, by 2021, esports will become a bigger industry than traditional professional athletics, and the industry will see its first $100 million media-rights deal (an incredibly ambitious forecast). In a follow-up piece published in early 2019, it predicts an audience of 645 million viewers by 2022.”

“With this evolution comes a wealth of opportunities for organizations driving growth across media technology, especially those that better enable remote production and help facilitate fast, global multichannel distribution,” Fischer added. “This dynamic vertical combines the broadcasting opportunities of live sports coverage and entertainment with exciting differentiating factors that demand the aforementioned capabilities. If media-tech enterprises want to seize on this boom, understanding the unique nature of esports production and distribution is important: there are some different challenges and opportunities compared with traditional sports productions.”

HERO “seeks 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,” according to Global X.

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.

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