VanEck's New eSports ETF is More than Just Fun and Games

The idea of the typical sport jocks 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. As such, enter today’s launch of the VanEck Vectors® Video Gaming and eSports ETF (NYSEArca: ESPO).

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.

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ESPO will take aim at in industry that is already garnering more interest than traditional sporting events like the MLB and NHL.

ESports ETF is More Than Just Fun and GamesFurthermore, 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.

Newly-Launched ESports ETF is More than Just Fun and Games 2

“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.”

A recent Newzoo Global Games Market Report estimates that the video game market itself is set to generate close to $140 billion in revenue in 2018, an increase of more than 13 percent from 2017. VanEck anticipates that established video game companies are set to benefit the most with the rise of eSports, through partnerships, league ownership, sponsorships, franchising, and other marketing arrangements.