Invest in the Future of Sports with Esports
January 13, 2022
Read Time 3 MIN
The video gaming and esports industries represent a globally diverse set of companies tapping into changing consumer preferences and key demographic trends. The growing popularity of gaming, along with the revenue potential across the industry, help make this industry a compelling investment opportunity, in our view. From home consoles to in-game events with millions of attendees, the video game industry is disrupting traditional sports and media and experiencing a period of transformative growth.
Four Reasons to Invest in Video Gaming and Esports
We believe the growth of video gaming and esports is a trend, not a fad. It reflects broader movements around the increasing consumer demand for online, interactive entertainment, the fragmentation of the digital media landscape amid the rise of cord-cutters, and the demographic shift, as digital natives get older.
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Esports Viewership and Engagement Reach New Heights
Esports viewership continues to grow and set new records, driven in part by the rising population of digital natives. An eNASCAR race broadcast on Fox and Fox Sports 1 on March 29, 2020 drew over 1.3 million viewers, making it the most watched broadcast TV esports event in history.1
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Technology and Diversification Drive Revenue Potential in Esports
Video game revenues have been growing consistently in recent years, and with the help of technological innovation, video game publishers have diversified their revenue streams. Notably, the rise of the “game as a service” model has helped extend the revenue lifecycle of games.
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Access to Esports Fast-Growing Revenues and User-Base
Global revenues and player numbers have increased in tandem since 2015 and show the potential for sustained growth as gaming and esports continue to gain traction.
Long Term Structural Growth of Global Revenues and Players
Source: Newzoo. Projected revenues and global players 2021-2023. For illustrative purposes only; not a guarantee of future performance.
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Esports are Transforming Entertainment, Sports and Media
Esports reflect the convergence of entertainment, video gaming, sports, and media businesses. With an active, engaged and relatively young demographic, the stage is set for sustainable long-term growth.
Consumer Demand
- Social ecosystem around video gaming illustrates demand for online interactive entertainment.
Cord Cutting
- Content is increasingly being consumed through online platforms.
Demographics
- The average age of esports enthusiasts is under 30.
Video Game Stocks Outperform the Broad Market Since Inception
Video game and esports stocks are uniquely positioned for the current market as shelter-in-place orders remain in effect. Across the industry, analysts have noted a sharp increase in video game and esports engagement, from people playing games to viewership numbers.
MVIS Global Video Gaming and eSports Index Performance Since Inception
7/16/2018-6/30/2021
Source: Morningstar. Past performance is no guarantee of future results. Index performance is not representative of fund performance. For fund performance current to the most recent month-end, visit vaneck.com. Investors cannot invest directly in the Index.
Capturing the Transformative Growth of Video Gaming and Esports
In our view, video gaming and esports present a compelling investment opportunity, and we believe a pure play approach is the best way to access this opportunity.
Investing in Video Gaming and Esports with VanEck Video Gaming and eSports ETF
Get in the game with video gaming and esports investing. Learn more about how the VanEck Video Gaming and eSports ETF (ESPO) offers investors exposure to this dynamic industry.
ESPO offers exposure to a diversified basket of video gaming and esports stocks.
- Targeted: Index captures the largest companies that generate at least 50% of their revenues from video gaming and esports.
- Power Players: Targeted index allows for high relative exposures to pure-play companies driving transformation in the industry, with top 10 names comprising over 60% of the portfolio weight.
- Exposure: May offer portfolio diversification away from technology giants like Apple, Google, and Microsoft through targeted and pure-play exposure.
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Important Disclosures
1 https://www.foxnews.com/auto/foxs-virtual-texas-nascar-esports-record.
An investment in the Fund may be subject to risks which include, among others, investing in the video gaming and esports companies, software, internet software & services and semiconductor industries, equity securities, communication services and information technology sectors, small- and medium-capitalization companies, issuer-specific changes, special risk considerations of investing in Asian, Chinese and Japanese issuers, emerging markets issuers, foreign securities, foreign currency, depositary receipts, market, operational, cash transactions, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Small- and medium-capitalization companies may be subject to elevated risks.
MVIS Global Video Gaming and eSports Index is the exclusive property of MarketVector Indexes GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MarketVector Indexes GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. The VanEck Vectors Video Gaming and eSports ETF is not sponsored, endorsed, sold or promoted by MarketVector Indexes GmbH and MarketVector Indexes GmbH makes no representation regarding the advisability of investing in the Fund.
Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
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Important Disclosures
1 https://www.foxnews.com/auto/foxs-virtual-texas-nascar-esports-record.
An investment in the Fund may be subject to risks which include, among others, investing in the video gaming and esports companies, software, internet software & services and semiconductor industries, equity securities, communication services and information technology sectors, small- and medium-capitalization companies, issuer-specific changes, special risk considerations of investing in Asian, Chinese and Japanese issuers, emerging markets issuers, foreign securities, foreign currency, depositary receipts, market, operational, cash transactions, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Small- and medium-capitalization companies may be subject to elevated risks.
MVIS Global Video Gaming and eSports Index is the exclusive property of MarketVector Indexes GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MarketVector Indexes GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. The VanEck Vectors Video Gaming and eSports ETF is not sponsored, endorsed, sold or promoted by MarketVector Indexes GmbH and MarketVector Indexes GmbH makes no representation regarding the advisability of investing in the Fund.
Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.