The VanEck Vectors Video Gaming and eSports ETF (NASDAQ: ESPO) hit another all-time high Monday and is higher by almost 36% year-to-date with some of that epic performance attributable to increased gaming due to the coronavirus pandemic.
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.
Data confirm that plenty of people turned to gaming as a form of entertainment or avenue to relieve stress among shelter-in-place policies.
“According to our survey results, a third of Americans have increased their time playing video games since quarantining. But with more people online, you may need faster internet to keep up with the competition: 39% of online gamers have experienced increased buffering during the quarantine,” according to Satellite Internet.
ESPO Shines
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. Other data points confirm just how devoted some gamers are.
“And it’s not just a quick round or two of Mario Kart either—30% of socially isolating gamers play video games for two to three hours a day. And nearly 23% of all our gaming survey respondents played four hours or more every day,” notes Satellite Internet. “On top of that, 18% of respondents would skip sleeping to get more gaming in, and 14% would skip eating or working. If you think that’s a bit over the line, you’re not alone: 81% of respondents think video games are addictive.”
It’s no secret anymore that gaming, or esports, is big business and that trend should continue in 2020. That said, investors should keep gaming-focused ETFs on their watch lists for the new year. Importantly, video game equities have a reputation for performing well after the past instances of virus situations comparable to COVID-19.
Importantly, mobile gaming is on the rise, providing ESPO with another tangible, long-term catalyst.
“When it comes to gaming, 35% are using their phones to play games, which is just a little more than those who use gaming consoles (34%), notes Satellite Internet.
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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.
