The ETFMG Video Game Tech ETF (NYSEArca: GAMR), the world’s first ETF focused on the video game industry, is up 54.3% year-to-date as the industry reaches unprecedented levels.
GAMR tracks companies across the video gaming industry, such as game retailers, game developers, and console and chip manufacturers.
“The video game industry has seen explosive growth over the course of the past several years, with worldwide revenue reaching a staggering $91 billion in 2016. Of this amount, mobile gaming is the largest segment, responsible for approximately $41 billion in revenue alone. These numbers greatly exceed estimates by companies such as PwC that global video game revenue would top $90 billion for the first time in 2020,” reports Seeking Alpha.
New technologies, such as virtual and augmented reality, have enhanced gaming experiences and contributed to this recent growth. In addition, the video gaming world has seen the rise in a modern video gaming sport called eSports, where thousands of people gather across the world to watch professional video gamers battle it out.
“Professional gaming competitions are bigger than ever. The world’s top players frequently duel it out in front of massive online audiences for millions of dollars in cash prizes,” says ZACKS Investment Research.
In addition to the growth of the industry, GAMR has become increasingly popular due to new game releases before the holiday season.
“Continued strength in games like Grand Theft Auto V, Grand Theft Auto Online, NBA 2K17 & 2K18, Monster Legends and XCOM 2 is the major reason for the outperformance and their demand will continue in the holiday season. The industry will continue to see upsides in consumer reception,” explains NASDAQ.
GAMR follows the EEFund Video Game Tech Index, which tracks the performance of companies across the video gaming space. The ETF contains holdings from across the globe but with a focus on companies in the United States and in Asian countries; this includes 35% in the U.S., 31% in Japan, 9% in Korea, and 7% in China.
Related: A Look at the First ETF Dedicated to Video Game Industry
Asian countries are playing a strong role in the development of the industry. For example, “in 2015, China made the decision to end its ban on video game consoles and hasn’t looked back since. In 2014, game revenues in China stood at $18 billion, second only to US revenues coming in at $21.3 billion. By 2018, however, Chinese revenues are expected to almost double to $32.8 billion, compared to $24.0 billion in the US. Furthermore, a burgeoning eSports market is thriving. Year-over-year revenue growth in 2017 is expected to be 41.3% and rise to $696 million. By 2020, this figure is anticipated to rise to approximately $1.5 billion,” says Seeking Alpha.
“The video game industry has a firm foundation and is rapidly growing. The rise of eSports will continue to popularize the industry and expansion into new technologies will continue to drive growth”
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