ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Beyond Basic Beta Channel
  2. Gaming Evolution Might Be Excellent for ESPO
Beyond Basic Beta Channel
Share

Gaming Evolution Might Be Excellent for ESPO

Tom LydonJul 20, 2022
2022-07-20

Owing to their status as growth stocks and members of the communication services sector, video game stocks are struggling this year.

In brighter news, this could be the ideal time for investors to consider related exchange traded funds, namely the VanEck Vectors Video Gaming and eSports ETF (ESPO B-). ESPO, which tracks the MVIS Global Video Gaming and eSports Index, is a diverse approach to the video game space, featuring ties to traditional gaming as well as next-generation concepts with potentially compelling growth trajectories.

In that latter category resides play-to-earn games (P2E) — a still nascent concept that could provide ESPO investors with credible inroads to the burgeoning metaverse investment thesis. P2E differs dramatically from the current video game model, which solely benefits game publishers and hardware makers.

“In P2E, the benefits flow both ways. The publisher/project makes money when players buy into the game by purchasing game assets (usually in the form of NFTs or non-fungible tokens),” according to VanEck research. “In this scenario, the player can sell his assets to others on an open marketplace, potentially at a profit. The player can also earn digital assets, like tokens, by playing or participating in the game itself. Ownership of some assets gives the owner the right to receive new assets if and when they are brought to market. Finally, P2E communities tend to be much more highly engaged than the traditional video game communities.”

The $319.4 million ESPO is home to 25 stocks, several of which are relevant in the P2E landscape. Those names include China’s Tencent, Roblox (RBLX), and Sea Ltd. (SE), among others. That trio combines for about 18% of the ESPO roster, according to VanEck data.

“P2E games are having an ever-expansive role in the Metaverse as they bring their communities into the Web3 world and connect their own ecosystems to an open, interoperable ecosystem,” added VanEck. “The most popular games in the world, whether it’s World of Warcraft, Call of Duty, or Fortnite, are closed systems (aka walled gardens). Within a walled garden, gamers do not enjoy true ownership of any of their assets or purchases. An asset or skin bought in Fortnite cannot be transferred to Call of Duty or World of Warcraft. These assets are specific to a single game!”

While the marriage of non-fungible tokens (NFTs), which are foundations in P2E, and traditional gaming has room to grow, it’s on old guard game publishers to realize and embrace this opportunity set. That could be a matter of “when” not “if.”

“We predict that at some point, the largest publishers will successfully launch an NFT project that is integrated into a flagship product, facilitating ownership and trading of digital items. While the timing is unclear, it’s obvious that the largest developers and publishers are working to make this happen,” concluded VanEck.

For more news, information, and strategy, visit the Beyond Basic Beta Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X