The video gaming industry continues to gain amid the health crisis as consumers spend generously, hitting record-breaking highs in 2021. Market experts are positive about the strength that the video gaming industry is witnessing in the terms of solid sales growth despite tough year-over-year comparisons, highlighting the momentum in the space.
Going on, 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 U.S. citizens to a large extent. Against this backdrop, investors can take a look at video gaming ETFs like The Roundhill BITKRAFT Esports & Digital Entertainment ETF NERD, VanEck Video Gaming and eSports ETF ESPO, Global X Video Games & Esports ETF HERO and Wedbush ETFMG Video Game Tech ETF GAMR, which have a high probability of gaining from the trend.
Video Game Sales Keep Soaring High
Recently-released data from The NPD Group emphasizes that the video game industry, including packaged media, digital, consoles and accessories, witnessed robust sales in 2021, with people spending $60.4 billion in all, reflecting 8% growth year over year.
Hardware spending surged 14% in 2021 to $6.06 billion. Rising on the popularity of Switch (NYSE:SWCH) OLED models, Nintendo’s NTDOY Switch-dominated Sony’s SONY PlayStation 5, in terms of unit sales in 2021 (per a GameDaily article).
Spending on content that includes physical and digital full game, DLC/MTX console, cloud, mobile, portable, PC and VR platforms jumped 7% to $51.69 billion in 2021 on a year-over-year basis.
Titles like Call of Duty: Vanguard, Call of Duty: Black Ops: Cold War, Madden NFL 22, Pokemon: Brilliant Diamond/Shining Pearl and Battlefield 2042 (EA) were among the top five best-sellers in 2021 (per The Gamer article).
Game developers continue to innovate and attract users every day and retain the old ones. They are increasing engagement for existing players by providing new titles, levels, arenas or environments as the games require at regular intervals. Mergers and acquisitions continue to support the gaming space.
Staying optimistic about the market prospects, experts are looking forward to the holiday season numbers that can see increasing sales for gifting purposes. Although the new cases from the Delta-variant are declining, an increasing number of people have started enjoying video games in the comfort of their homes. Therefore, the trend is likely to gain traction amid the holidays as well.
Going on, Microsoft MSFT has agreed to buy gaming giant Activision Blizzard (NASDAQ:ATVI) for $68.7 billion. Per the terms of the deal, Microsoft will acquire Activision Blizzard for $95.00 per share in an all-cash transaction. If the deal closes, it will be Microsoft's largest acquisition ever, topping its purchase of LinkedIn for $26.2 billion in December 2016.
The deal will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will play a key role in developing metaverse platforms. It will provide the software giant access to iconic franchises like Warcraft, Diablo, Overwatch, Call of Duty and Candy Crush. Microsoft will add many of Activision’s games to Xbox Game Pass and PC Game Pass. The acquisition, expected to close in fiscal 2023, will be accretive to non-GAAP earnings per share after the deal closes (read: 5 ETFs to Cash in on Microsoft-Activision Deal ).
Video Gaming ETFs to Keep Gaining
Investors can consider the following video gaming ETFs:
The Roundhill BITKRAFT Esports & Digital Entertainment ETF
The Roundhill BITKRAFT Esports & Digital Entertainment ETF 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.
NERD holds 38 stocks in its basket. With AUM of $56.9 million, The Roundhill BITKRAFT Esports & Digital Entertainment ETF charges 50 basis points (bps) as expense ratio (read: Gaming ETFs to Gain Post Apple-Epic Games Ruling).
VanEck Video Gaming and eSports ETF
VanEck Video Gaming and eSports ETF 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.
ESPO holds 25 stocks in its basket. With AUM of $527.5 million, VanEck Video Gaming and eSports ETF charges 55 bps as expense ratio.
Global X Video Games & Esports ETF
Global X Video Games & Esports ETF 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.
HERO holds 40 stocks in its basket. With AUM of $359.5 million, Global X Video Games & Esports ETF charges 50 bps as expense ratio (read: How Are Activision ETFs Reacting to Q3 Earnings Results?).
Wedbush ETFMG Video Game Tech ETF
Wedbush ETFMG Video Game Tech ETF 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 as well as game retailers.
GAMR holds 112 stocks in its basket. With AUM of $91.6 million, Wedbush ETFMG Video Game Tech ETF charges 75 bps in expense ratio.
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Microsoft Corporation (NASDAQ:MSFT): Free Stock Analysis Report
Global X Video Games & Esports ETF (HERO): ETF Research Reports
Nintendo Co. (OTC:NTDOY): Free Stock Analysis Report
Wedbush ETFMG Video Game Tech ETF (GAMR): ETF Research Reports
VanEck Video Gaming and eSports ETF (ESPO): ETF Research Reports
Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD): ETF Research Reports
Sony Corporation (NYSE:SONY): Free Stock Analysis Report
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