Finally, a Video Game ETF!

There has been a saying for years that there is an exchange traded fund strategy for just about everything. Now that can include video games. Wednesday marked the launch of the PureFunds Video Game Tech (NYSEMKT: GAMR). The ETF launch showed that ISE ETF Ventures and EE Fund Management are the fund partners. Factor Advisors is in partnership with PureFunds, ISE ETF Ventures and EE Fund Management for the launch.

What matters here is that this is the first official ETF dedicated solely to the theme of video game technology. The ETF also has an expense ratio of 0.75%.

The GAMR ETF is designed to correspond to the price and yield performance of the EE Fund Video Game Tech Index. Some ETFs have limited components but this one is said to have 36 exchange-listed companies across the globe that are engaged in (supporting or utilizing) the video game industry.

Some of the qualifications to be included are to be a software developer, publisher, distributor or platform provider for the video game sector — to include interactive training or simulation segments.
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Also included are companies that design and make accessories and peripherals for video games, interactive training, and simulation. The index also is said to include large conglomerates with business models that actively support the video game and related segments.

Actual index membership for the companies was not readily available. Activision Blizzard Logitech Nintendo and Nvidia were some of the companies specifically noted as being components of the video game ETF.

It has been surprising that a video game ETF has not launched prior to this. That being said, many companies involved in and dominating the video game segment are also involved predominantly in other sectors as well. At issue is that not all video game companies are just tied to video games.

PureFunds said at its launch:

With humble origins in pizza parlors and arcades, the global video game industry has expanded to all corners of the world and to every size of screen. From mobile devices to personal computers, to consoles and set-top boxes, video games are enjoyed by over a billion people with estimates of global revenue approaching $100 billion annually.

Exciting trends such as the shift to digital distribution of software, proliferation of HD and 4K displays, cloud content and streaming, virtual/augmented reality, motion tracking, episodic content, and diversified monetization models, are stimulating innovation and offer expanded opportunities for entertainment, education, simulation, and other game tech applications.

Video games provide consumers with compelling cost-per-hour entertainment value, and attractive margin opportunities for software developers. The demand for increased processing and graphic capabilities motivate semiconductor companies to produce faster and more efficient chips. Platform makers continually improve their systems. Peripheral and component makers enjoy repeat sales of input devices, peripherals, and computer parts.

All this adds up to a dynamic and evolving industry landscape with multiple paths for potential future growth.