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Video Gaming ETFs to Surge on Soaring Sales Amid Pandemic

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The video games industry continues to see growing demand since the pandemic had begun last year. According to a report from The NPD Group, the video game industry including packaged media, digital, consoles and accessories saw strong sales in the second quarter of 2021 with people spending $14 billion in total. The figure inched up 2% year over year. Understandably, the ongoing health crisis has been a blessing in disguise for this space so far.

Some of the best-selling and most-played titles during the second quarter of 2021 included new ones, live service games and mobile titles like Call of Duty: Warzone, Among Us, Candy Crush Saga, Fortnite, Genshin Impact, Mario Kart 8, Resident Evil: Village, Mass Effect: Legendary Edition, per The NPD Group report.

Commenting on the soaring sales, the games industry analyst Mat Piscatella at The NPD Group reportedly said that "Despite changing pandemic conditions across the country, video games spending remained strong in the second quarter of 2021. A year ago, in the second quarter of 2020, consumer spending on video games increased a remarkable 47% compared to the same period in 2019. Consumer spending has not only maintained the elevated levels reached a year ago but exceeded them in key areas such as hardware, mobile, and subscription spending." This was mentioned in a GameSpot article.

In fact, a previous report from the industry-tracking firm highlighted that the video game industry saw strong sales in the first quarter of 2021 as well with people spending $14.92 billion on the whole. The figure surged 30% year over year.

Video Game Sales Continue to Soar

Recently-released data from The NPD Group emphasizes that the video game industry including packaged media, digital, consoles and accessories witnessed robust sales in June with people spending $4.9 billion in all, up 5% year over year. Consumer spending on videogames was $28.9 billion in the first half of the year, delivering a 15% year-over-year jump. 

Spending on content that includes physical & digital full game, DLC/MTX console, cloud, mobile, portable, PC and VR platforms increased 1% on a year-over-year basis. Besides, hardware spending surged 112% in June to $401 million, marking the maximum for the month of June since 2008, per the same The NPD Group report.

Titles like Ratchet & Clank: Rift Apart, Call of Duty: Black Ops Cold War, Mario Gold: Super Rush, MLB: The Show and Scarlet Nexus were among the best-selling and most played games in June.

Once again, analysing the data, Piscatella reportedly said that “I think the data suggest that the video game market is holding on, and even expanding in some cases, to gains that were driven by pandemic influenced changes in consumer behaviors. Last year we saw more players, playing for more hours, across more devices. The current data suggest that this behavior is likely persisting, despite the changing market conditions”. This was included in a GameDaily.biz article.

Game developers are continuing to innovate and attract users every day and also retain the old ones. They are increasing engagement for the existing players by providing new titles, levels, arenas or environments as the games require at regular intervals. Furthermore, mergers and acquisitions continue to support the gaming space.

Video Gaming ETFs to Keep Gaining

It seems that the boom in the video gaming space may remain even in the post-pandemic era as the outbreak changed the lifestyles and preferences of US citizens to a large extent. Against this backdrop, investors can take a look at the following video gaming ETFs:

The Roundhill BITKRAFT Esports & Digital Entertainment ETF  (NERD - Free Report)

The fund is designed to offer investors exposure to esports & digital entertainment by providing investment results that closely correspond, before fees and expenses, to the performance of the Roundhill BITKRAFT Esports Index. It holds 33 stocks in its basket. With an AUM of $89 million, the fund charges 50 basis points (bps) in expense ratio (read: Video Gaming ETFs to Shine Bright on Surging Sales in May).

VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report)

The fund aims to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS Global Video Gaming and eSports Index, which is intended to track the overall performance of companies involved in video game development, esports and the related hardware and software. It holds 26 stocks in its basket. With an AUM of $778.8 million, the fund charges 55 bps in expense ratio (read:  Nvidia Blockbuster Q1 Earnings Put These ETFs in Focus).

Global X Video Games & Esports ETF (HERO - Free Report)

The fund looks to invest in companies that develop or publish video games, facilitate the 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. It holds 39 stocks in its basket. With an AUM of $621.9 million, the fund charges 50 bps in expense ratio (read:  5 ETFs Worth Your Attention as Delta Variant Continues to Spread).

Wedbush ETFMG Video Game Tech ETF (GAMR - Free Report)

The fund provides pure-play and diversified exposure to a dynamic intersection of technology and entertainment. It also corresponds generally to the price and yield performance of the EEFund Video Game Tech Index.  The index is designed to reflect the performance of companies involved in the video game technology industry including game developers, console and chip manufacturers, and game retailers. It holds 136 stocks in its basket. With an AUM of $142.2 million, the fund charges 75 bps in expense ratio.

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