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5 ETFs to Play Record-Breaking U.S. Gaming Sales in Q2
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The gaming industry is booming this year buoyed by the pandemic as people are mostly stuck at home. This is especially true as spending on video games in the United States skyrocketed to new heights in the second quarter.
Per market researcher NPD, consumers spent $11.6 billion on video game hardware, software and accessories during the second quarter, up 30% year over year and 7% from the first quarter, when spending had hit $10.9 billion. Most of the spending comes from video game content, which saw a 28% year-over-year increase to $10.2 billion on the back of gains across digital console, mobile, subscription spending and new physical games (read: Video Gaming ETFs to Keep Soaring Amid Coronavirus Crisis).
Hardware sales jumped 57% to $848 million driven by strong demand for Nintendo Switch, PlayStation 4 and Xbox One consoles. Meanwhile, sales of accessories, including gamepads, steering wheels, headsets and other peripherals, spiked 50% to $584 million.
Top selling games include Animal Crossing: New Horizons, Call of Duty: Modern Warfare, Call of Duty: Warzone, Candy Crush Saga, Candy Crush Soda Saga, Final Fantasy VII: Remake, Grand Theft Auto V, Mario Kart 8: Deluxe, Minecraft, NBA 2K20, Pokémon Go and The Last of Us: Part II.
With the pandemic showing no signs of abating, NPD expects similarly impressive sales figures for the third quarter and beyond. The future for the industry looks bright as people are increasingly turning to games, and a new console generation is just months away. Games and esports analytics firm Newzoo projects video gaming revenues to increase 9.3% this year to $159.3 billion and surpass $200 billion by the end of 2023.
ETFs to Play
While investing in gaming stocks could reward investors, a diverse approach in a basket form can also be a great choice. For this, investors can splurge on the gaming industry with the following ETFs.
This ETF offers exposure to the companies involved in the video game technology industry —game developers, console and chip manufacturers, and game retailers — by tracking the EEFund Video Game Tech Index. It holds 88 stocks in its basket and charges 75 bps in annual fees. The fund has amassed $115.7 million in its asset base and trades in volume of about 24,000 shares a day on average. It has gained 48.8% this year.
VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report)
This fund offers exposure to global companies involved in video game development, esports, and related hardware and software by tracking the MVIS Global Video Gaming and eSports Index. It holds 25 stocks in its basket with American firms accounting for more than one-third of the portfolio, while Japan and China round off the next two with a double-digit allocation each. The fund has gathered $414 million in its asset base while trading in an average daily volume of 168,000 shares. It charges 55 bps in annual fees from investors and has soared 53.4% this year (read: Activision ETFs Set to Shine on Strong Q2 Results).
This ETF offers exposure to companies that develop or publish video games, facilitate streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality. This can be easily done by the Solactive Video Games & Esports Index. Holding 40 securities in its basket, the fund has AUM of $218.5 million and charges 50 bps in annual fees. It trades in an average daily volume of 148,000 shares and has surged 56.5% so far this year.
Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD - Free Report)
This fund offers retail and institutional investors exposure to 30 esports & digital entertainment stocks by tracking the Roundhill BITKRAFT Esports Index. The index consists of a modified equal-weighted portfolio of globally listed companies that are actively involved in the competitive video gaming industry. From a country exposure, China and the United States take the largest share at 29.5% and 18.3%, respectively, while South Korea and Sweden round off the next two spots. NERD has accumulated $39.4 million in its asset base while trading in an average daily volume of 47,000 shares. It charges 25 bps in annual fees and expenses and has gained 51.5% so far this year.
This ETF debuted in early June and has already attracted $87.6 million in AUM. It is designed to offer retail and institutional investors global exposure to sports betting and iGaming industries by tracking the Roundhill Sports Betting & iGaming Index. The fund holds 37 stocks in its basket with American firms accounting for the largest share at 34.5%, followed by 13.4% allocation in Britain and 11.3% in Sweden. It charges 75 bps in annual fees and trades in an average daily volume of 460,000 shares. The ETF is up 11% since its inception (read: 4 Sector ETFs That Are Up Double-Digits to Start August).
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5 ETFs to Play Record-Breaking U.S. Gaming Sales in Q2
The gaming industry is booming this year buoyed by the pandemic as people are mostly stuck at home. This is especially true as spending on video games in the United States skyrocketed to new heights in the second quarter.
Per market researcher NPD, consumers spent $11.6 billion on video game hardware, software and accessories during the second quarter, up 30% year over year and 7% from the first quarter, when spending had hit $10.9 billion. Most of the spending comes from video game content, which saw a 28% year-over-year increase to $10.2 billion on the back of gains across digital console, mobile, subscription spending and new physical games (read: Video Gaming ETFs to Keep Soaring Amid Coronavirus Crisis).
Hardware sales jumped 57% to $848 million driven by strong demand for Nintendo Switch, PlayStation 4 and Xbox One consoles. Meanwhile, sales of accessories, including gamepads, steering wheels, headsets and other peripherals, spiked 50% to $584 million.
Top selling games include Animal Crossing: New Horizons, Call of Duty: Modern Warfare, Call of Duty: Warzone, Candy Crush Saga, Candy Crush Soda Saga, Final Fantasy VII: Remake, Grand Theft Auto V, Mario Kart 8: Deluxe, Minecraft, NBA 2K20, Pokémon Go and The Last of Us: Part II.
With the pandemic showing no signs of abating, NPD expects similarly impressive sales figures for the third quarter and beyond. The future for the industry looks bright as people are increasingly turning to games, and a new console generation is just months away. Games and esports analytics firm Newzoo projects video gaming revenues to increase 9.3% this year to $159.3 billion and surpass $200 billion by the end of 2023.
ETFs to Play
While investing in gaming stocks could reward investors, a diverse approach in a basket form can also be a great choice. For this, investors can splurge on the gaming industry with the following ETFs.
Wedbush ETFMG Video Game Tech ETF (GAMR - Free Report)
This ETF offers exposure to the companies involved in the video game technology industry —game developers, console and chip manufacturers, and game retailers — by tracking the EEFund Video Game Tech Index. It holds 88 stocks in its basket and charges 75 bps in annual fees. The fund has amassed $115.7 million in its asset base and trades in volume of about 24,000 shares a day on average. It has gained 48.8% this year.
VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report)
This fund offers exposure to global companies involved in video game development, esports, and related hardware and software by tracking the MVIS Global Video Gaming and eSports Index. It holds 25 stocks in its basket with American firms accounting for more than one-third of the portfolio, while Japan and China round off the next two with a double-digit allocation each. The fund has gathered $414 million in its asset base while trading in an average daily volume of 168,000 shares. It charges 55 bps in annual fees from investors and has soared 53.4% this year (read: Activision ETFs Set to Shine on Strong Q2 Results).
Global X Video Games & Esports ETF (HERO - Free Report)
This ETF offers exposure to companies that develop or publish video games, facilitate streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality. This can be easily done by the Solactive Video Games & Esports Index. Holding 40 securities in its basket, the fund has AUM of $218.5 million and charges 50 bps in annual fees. It trades in an average daily volume of 148,000 shares and has surged 56.5% so far this year.
Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD - Free Report)
This fund offers retail and institutional investors exposure to 30 esports & digital entertainment stocks by tracking the Roundhill BITKRAFT Esports Index. The index consists of a modified equal-weighted portfolio of globally listed companies that are actively involved in the competitive video gaming industry. From a country exposure, China and the United States take the largest share at 29.5% and 18.3%, respectively, while South Korea and Sweden round off the next two spots. NERD has accumulated $39.4 million in its asset base while trading in an average daily volume of 47,000 shares. It charges 25 bps in annual fees and expenses and has gained 51.5% so far this year.
Roundhill Sports Betting & iGaming ETF (BETZ - Free Report)
This ETF debuted in early June and has already attracted $87.6 million in AUM. It is designed to offer retail and institutional investors global exposure to sports betting and iGaming industries by tracking the Roundhill Sports Betting & iGaming Index. The fund holds 37 stocks in its basket with American firms accounting for the largest share at 34.5%, followed by 13.4% allocation in Britain and 11.3% in Sweden. It charges 75 bps in annual fees and trades in an average daily volume of 460,000 shares. The ETF is up 11% since its inception (read: 4 Sector ETFs That Are Up Double-Digits to Start August).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>