We believe the growth of video gaming and esports is a trend, not a fad. It reflects broader trends 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 grow up.
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
Source: Newzoo Global Esports Market Report, 2020
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.
Source: Newzoo. Projected revenues and global players 2020-2020.
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.
Social ecosystem around video gaming illustrates demand for online interactive entertainment.
Content is increasingly being consumed through online platforms.
The average age of esports enthusiasts is under 30.
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.
7/16/2018-12/31/2020
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.
ESPO offers exposure to a diversified basket of video gaming and esports stocks.
Index captures the largest companies that generate at least 50% of their revenues from video gaming and esports.
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.
May offer portfolio diversification away from technology giants like Apple, Google, and Microsoft through targeted and pure-play exposure.
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.
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.