Video gaming-themed ETFs continue to gain momentum as the sudden shift in everyday life to increased demand for at-home entertainment helped fuel a growing trend.
Among the better performing non-leveraged ETFs of Wednesday, the VanEck Vectors Video Gaming and eSports ETF (ESPO) increased 2.3%, Roundhill BITKRAFT Esports & Digital Entertainment ETF (NYSE ARCA: NERD) rose 1.1%, Wedbush ETFMG Video Game Tech ETF (NYSEARCA: GAMR) advanced 1.6% and Global X Video Games & Esports ETF (HERO) gained 1.8%.
JP Lee, a product manager at VanEck, argued that the video game industry has capitalized on broad trends, including a rise in consumer demand for interactive entertainment, a move away from more expensive traditional media to cheaper alternatives, and the clout of younger consumers who are more enthusiastic about video games, the Wall Street Journal reports.
“Videogames sit right in the middle of those three pillars,” Lee gold the WSJ.
Will Hershey, chief executive of Roundhill Investments, also noted that the video gaming business was already doing well before the coronavirus outbreak, and it received a significant boost from “live, traditional sports being put on hold” as more look consider E-sports as another form of entertainment with stadiums locked down.
Jay Jacobs, head of research and strategy at Global X, argued that the industry could continue to thrive after the lockdowns are removed. The shutdown measures may have a long-term impact on the sector as a new et of gamers or esports viewers find out about the diversity offered by video games and continue to stick around when life returns to normal.
Michael Pachter, managing director of equity research and videogames analyst at Wedbush Securities, calculated that the lockdown measures helped increase the number of gamers by 10% worldwide, and projects at least half of these new gamers “are probably going to stay and continue playing moving forward.”
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