The VanEck Vectors Video Gaming and eSports ETF (NASDAQ: ESPO) is in the midst of a breathtaking run that’s seen it surge more than 71% this year. While that run is powered by video game publishers and semiconductor makers, investors shouldn’t overlook the ESPO’s eSports thesis.
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.
Integral to the eSports investment thesis are compelling demographic trends and how eSports are pulling television viewers from traditional sporting events.
“It’s not just the size of gaming and eSports audiences that has changed — the demographics of those audiences have, too. Because there are so many different games on so many different platforms, fans and players encompass people of all ages, genders, cultures, and financial backgrounds,” according to Adobe Analytics.
The ESPO ETF and eSports for the Long Haul
eSports, or competitive gaming, will be a sector that will continue to garner investor interest as the proliferation of viewers will make the industry a multimedia powerhouse with lucrative corporate sponsorships.
But finding opportunities in today’s market environment is not all fun and games. In certain sectors amid social distancing measures and renewed government lockdowns, certain ETFs are offering investors fun and gains, like those that focus on eSports.
“Previously, the average video game player was thought to be a 26-year-old male on a computer, but that doesn’t capture the real picture of who a gamer is today,” notes Adobe Analytics. “For example, in almost every market surveyed by YouGov, mobile gamers outnumbered desktop and console players. Today’s gamers also extend across genders and ages: women make up a significant portion of Overwatch players (16 percent) and Roblox players are between nine and 15 years old. Gaming, it seems, is for everyone.”
Adding to the case for ESPO is the variety of advertisers tapping into this burgeoning market, providing some ESPO components with new, diverse revenue streams.
“Even seemingly unrelated brands can tap into eSports audiences if they do it with care and creativity. Mastercard’s League of Legends sponsorship maximized engagement by giving fans the opportunity to take part in special experiences, such as rehearsals for a tournament’s opening ceremony. DHL’s cheeky videos for ESL One were so successful that arenas of people were chanting the courier’s name,” according to Adobe.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.