Can Videogame ETFs Continue Their Hot Streak?
Video games and esports are one of the best performing areas of 2020. The four ETFs in this space--VanEck Vectors Video Gaming and eSports (ESPO - Free Report), ETFMG Video Game Tech (GAMR - Free Report), Roundhill Bitkraft Esports & Digital Entertainment (NERD - Free Report), and Global X Video Games & Esports ETF (HERO - Free Report) --are all up more than 65% year to date.
People stuck at home during the pandemic are spending a lot of time and money on videogames, and some of these trends can continue even after movie theaters, bars and sports venues reopen. In fact, the industry was growing fast even before COVID-19. Per VanEck, the industry has benefited from three broader trends.
Microsoft (MSFT - Free Report) and Sony (SNE - Free Report) released their new next-generation gaming consoles recently. What should investors know about them? We also discuss the new trends like mobile gaming, cloud gaming, and subscription models.
ESPO—the most popular videogaming ETF—holds companies that derive at least 50% of total revenues from video gaming and/or esports. Tencent Holdings (TCEHY - Free Report), Sea Limited (SE - Free Report) Nvidia (NVDA - Free Report), and AMD (AMD - Free Report) are its top holdings. The fund has gathered $442 million in assets and has surged more than 70% in 2020. Tune into the podcast to learn more.
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Video games will certainly continue to be profitable because the number of addicts continues to grow. And the business model is solid: developing a good product and then selling millions of copies for a high price. Production costs are low although creation costs can be quite a bit. But the best part of the business plan is that the customers always want more. Boredom and a short attention span are the game sellers best friends.And the attention span capability of growing segments of the population is getting shorter every day.