Video games are a key pillar of the modern entertainment industry and China is no exception. In the billion-plus person nation, however, regulatory approvals can sometimes hold up game development and release. Recently, however, the Chinese government approved more than 100 games including games from key names like Tencent (TCEHY) and Alibaba (BABA) subsidiaries. That may boost their outlook in a China tech ETF like KWEB.
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The approved list included Tencent’s multiplayer, online game Roco Kingdom: World, which could provide a new, meaningful revenue stream as part of the company’s growing focus on esports. For Alibaba, meanwhile, its studio Lingxi Games received approval from the National Press and Publication Administration (NPPA) for its own game, Ruyuan. Video games in China reached a market value of $41.7 billion in 2023, a 14% increase YoY..
Video Games and China Tech ETF KWEB
That positive video game news boosts the outlook for those firms, but they benefit from macro trends as well. Chinese consumers still remain a powerful force in the global economy. While the nation’s housing issues and debt problems among its regional governments remain issues, it still pays to retain the right exposure to China, and a China tech ETF may present one option to do so.
The KraneShares CSI China Internet ETF (KWEB ) represents one China tech ETF option for exposure to that space. It currently holds both companies at a 10.3% and 8.9% weight respectively per ETF Database. KWEB charges 69 basis points (bps) for its exposures, tracking the CSI Overseas China Internet index. The ETF has returned 12.6% versus its NAV over the last three months.
Video games aren’t just a potent route into consumer spending. They represent a growing part of entertainment that captures the attention of a key consumer segment in younger people. Amid much tough China news, a China tech ETF like KWEB and its exposure to China tech firms can provide one more exciting option for exposure.
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