How ETF Investors Can Play The Gaming Console War

by on June 14, 2013 | ETFs Mentioned:

Sony and Microsoft both announced earlier this Spring that the companies will be releasing new editions of their popular gaming consoles. The Xbox One from Microsoft was announced in late May and has already faced harsh backlash from consumers for a number of changes to the system, but it has also been praised for the new games assigned onto the system. Sony’s PlayStation 4 was recently unveiled at the Electronic Entertainment Expo and while first reactions are more positive than the Xbox’s, not as many details have been given on this updated console. Neither gaming system is set to launch before the end of the summer, instead aiming for the busy holiday shopping season at the end of the year, but this will leave plenty of time for investors to pick their side in the console war [for updates on ETF investing, sign up for the free ETFdb newsletter].

NDTV Gadgets

NDTV Gadgets

With a stronger graphics card, more RAM, and reinvented motion capture technology for the Kinect, the Xbox One has provided that MSFT has once again created an impressive gaming system. There are some changes, however, that have put consumers off; the kinect’s ability to track user heart rate and a required periodic online check-in that will occur whether of not the console is on have been criticized as infringing on consumer privacy. Still, Microsoft has already announced close to 15 new games that will be sold exclusively for Xbox, and this strong selection is what users are coming back for. Below we highlight three ETF with exposure to Microsoft:

  1. S&P North American Technology-Software Index Fund (IGV, B): As the top holding in this major U.S. software ETF, Microsoft is joined by other major tech firms like Oracle, Adobe, and Intuit [also see What Investors Need To Know About 3-D Printing].
  2. Dow Jones US Technology Index Fund (IYW, A-): Much like IGV, IYW covers a major U.S. index focused on technology, but here Microsoft is only outpaced by Apple in the top holdings.
  3. NASDAQ Technology Dividend Index Fund (TDIV, A): This index includes up to 100 technology and telecom companies that pay a regular dividend and strong historical returns, making Microsoft a clear top holding [also see Head-To-Head: Technology Industry Standouts].

Edge Online

Edge Online

As the first new console for Sony in seven years, the pressure on the PlayStation 4 to wow players is massive. By announcing that there will be no restrictions on reselling games, a lower price tag, and compatibility with PS3 games, Sony is making a direct attack at Microsoft’s restrictions, hoping these features will make up for historically less popular games. Below we highlight three ETFs with exposure to Sony:

  1. NASDAQ CEA Smartphone Index Fund (FONE, B): Designed to track the performance of companies engaged in the smartphone market segment, Sony makes up 3% for its Xperia mobile phones [check out the High Tech ETFdb Portfolio].
  2. Value Line Equity Allocation Index Fund (FVI, C+)By objectively identifying and selecting stocks that appear to have the greatest potential for capital appreciation, FVI has created a portfolio of strong funds, including Sony ADR.
  3. SPDR Gloabl Dow ETF (DGT, B+)This index of 150 stocks is made up of leading blue chip companies from around the world that have a long history of success and a strong precence in the global market [see Free Report: How To Pick The Right ETF Every Time].

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Disclosure: No positions at time of writing.