Video Gamers Rejoice: A New eSports ETF Has Hit the Market

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Published: October 17, 2018 12:30 pm

Last Updated: January 11, 2020 4:17 pm

The “future of sports” is here, and now investors have the option to put their money in it. eSports has been a growing phenomenon in the United States, and it is drawing a lot of attention with the advent of new exciting games like Fortnite or Call of Duty. VanEck is offering the opportunity to invest in this virtual arena with the launch of its new VanEck Vectors Video Gaming and eSports ETF (NYSEARCA: ESPO).

The video game market is undergoing a period of transformative growth and is predicted to generate close to $140 billion in revenue in 2018, an increase of more than 13% from 2017. For one, it’s not just that people are playing more video games on more platforms, but with the emergence of professional video gaming, or eSports, there is an even greater draw.

VanEck anticipates that established video game companies are set to benefit the most with the rise of eSports, through partnerships, league ownership, sponsorships, franchising and other marketing arrangements.

Ed Lopez, Head of ETF product at VanEck, commented:

Just a few years ago, talk of sold out stadiums, viewership in the millions, high-profile sponsors, and notable marketing arrangements would have been centered on football, baseball, basketball or hockey. But today, that talk can just as easily be applied to the world of video games and eSports. This is the future of sports and a growth story that is global in scope.

eSports have brought video games out of the rec room and into the stadiums. eSports has become one of the largest spectator sports in the world with games streamed online or on major broadcast outlets like ESPN and at live gaming events held in stadiums. For example, the League of Legends world finals in 2017 attracted more viewers than the MLB World Series, the NBA finals, and the NHL Stanley Cup finals. In 2018, the global eSports audience is expected to reach 380 million people.

The ETF seeks to track, before fees and expenses, the performance of the MVIS Global Video Gaming and eSports Index (MVESPO). The index is a rules-based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in video gaming and eSports.

Again the ETF will include companies developing video games and related software, streaming services or those involved in eSports events. To be included in the index, companies must generate at least 50% of their revenues from video gaming or eSports. This allows ESPO to have the highest concentration, among U.S.-listed ETFs, of pure play names participating in this fast-growing space.

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