Video Gaming ETFs to Shine Bright on Surging Sales in May

The video games industry witnessed solid demand amid an improving pandemic and weather conditions in May. Notably, the ongoing health crisis has been a blessing in disguise for this space so far. In fact, consumer spending on video games in the pandemic-stricken 2020 touched a new record of $56.9 billion, rising 27% from the 2019 reading, per The NPD Group.

Another report from the market research group reflected that the video game industry including packaged media, digital, consoles and accessories saw strong sales in the first quarter of 2021 with people spending $14.92 billion in total. Notably, the figure surged 30% year over year. Markedly, the latest report from the industry-tracking firm highlights the same story.

Video Game Sales Soar Again

Recently-released data from The NPD Group highlights that the video game industry including packaged media, digital, consoles and accessories witnessed robust sales in May with people spending $4.45 billion in all, up 3% year over year. Further, year-to-date consumer spending has also risen 17% year over year to $24.02 billion.

Notably, spending on video game content including Physical & Digital Full Game as well as DLC/MTX and Subscription consumer spending across Console, Cloud, Mobile, Portable, PC and VR platforms also rose 3% from the prior year to $4.07 billion last month. Markedly, there was about 5% rise in hardware spending during May to $244 million.

Notably, Resident Evil: Village, MLB: The Show 21, Call of Duty: Black Ops: Cold War, New Pokemon Snap, Mortal Kombat 11, Mario Kart 8, Returnal, Animal Crossing: New Horizons, Minecraft and Call of Duty: Modern Warfare were among the best-selling and most played games in May.

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. Microsoft MSFT completed the buyout of Bethesda’s parent company ZeniMax Media in an all-cash deal worth $7.5 billion in March this year. At the Xbox & Bethesda Games Showcase, Microsoft announced an attractive games line-up for its Xbox consoles. It showcased 30 new titles including Forza Horizon 5 and Battlefield 2042. In fact, 27 of these 30 titles will be available with the Xbox Game Pass service.

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

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 35 stocks in its basket. With an AUM of $96.5 million, the fund charges 50 basis points (bps) in expense ratio (read: Likely Capital Gain Tax Hike a Buying Point for These ETFs?).

VanEck Vectors Video Gaming and eSports ETF ESPO

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 $797.6 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

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 $648.3 million, the fund charges 50 bps in expense ratio (read: Activision ETFs Set to Shine Bright on Strong Q1 Results).

Wedbush ETFMG Video Game Tech ETF GAMR

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 $145.6 million, the fund charges 75 bps in expense ratio.