Video game stocks are having a triumphant year, outperforming the broader market as investors are betting big on blockbuster game releases and next-generation hardware. The highly anticipated launch of Grand Theft Auto VI (GTA 6) from Take-Two Interactive Software TTWO and Nintendo’s NTDOY upcoming Switch 2 console seem like lucrative opportunities for investors.
Given the solid rally, ETFs in the space are surging. Roundhill Video Games ETF NERD, Global X Video Games & Esports ETF HERO and VanEck Video Gaming and eSports ETF ESPO have risen nearly 15% each, whereas Pacer BlueStar Digital Entertainment ETF ODDS and Amplify Video Game Leaders ETF GAMR has gained about 12% in February (read: 5 Best-Performing Sector ETFs Halfway Through Q1).
Grand Theft Auto VI
Investors are expecting high for Grand Theft Auto VI, which is set to arrive in autumn — 12 years after GTA 5 broke records. Grand Theft Auto V remains the third best-selling video game of all time, with 210 million copies sold, trailing only Minecraft (300 million copies) and Tetris (520 million copies), according to Gamespot.
The trailer for GTA 6 was released last December and garnered more than 90 million views in mere 24 hours, setting the stage for one of the biggest game launches of all time. Analysts at Ned Davis Research estimate the game to sell 250 million units over its lifetime, easily surpassing GTA 5.
Nintendo’s Switch 2 Console
The Nintendo Switch 2, which is expected to be released before the 2025 holiday season, will likely see massive demand. This is because the original Switch has sold more than 146 million units since its 2017 launch. Analyst at JPMorgan believes that the console’s backward compatibility will significantly boost Nintendo’s software sales. They project that Nintendo will sell 190 million software units in fiscal 2025, growing to 272 million by fiscal 2029.
Solid Industry Trends
The video game market is experiencing significant growth with the rise of 3D games and 3D graphics. Artificial Intelligence is playing a bigger role in game development and in-game monetization. The rollout of 5G networks, augmented reality, virtual reality and the increasing popularity of gaming among women will continue to fuel growth in the market.
The global video game market is projected to grow, seeing a CAGR of 8.6% from 2025 to 2029, according to Technavio. The rising penetration of smartphones and improving internet access are driving market growth. Video games, which are the largest forms of entertainment globally, will continue to achieve significant growth in the coming decades.
The global video game industry is expected to reach $522.46 billion in 2025 and increase to $691.31 billion in 2029, per Amplify.
ETFs in Focus
Roundhill Video Games ETF (NERD)
Roundhill Video Games ETF offers exposure to companies engaged in video game publishing and/or video game development. It follows the Nasdaq CTA Global Video Games Software Index, holding 35 stocks in its basket, with double-digit concentration on the top two firms. Other firms hold no more than 5.7% of assets (read: 4 Best ETF Charts of This Earnings Season).
Roundhill Video Games ETF has accumulated $23.3 million in its asset base while trading in an average daily volume of 5,000 shares. It charges 50 bps in annual fees from investors.
Global X Video Games & Esports ETF (HERO)
Global X Video Games & Esports ETF offers exposure to companies developing or publishing video games, facilitating streaming and distribution of video gaming or esports content, owning and operating within competitive esports leagues or producing hardware used in video games and esports, including augmented and virtual reality. This can be easily done by the Solactive Video Games & Esports Index.
Holding 45 securities in its basket, Global X Video Games & Esports ETF has an AUM of $110.4 million and charges 50 bps as annual fees. HERO trades in an average daily volume of 28,000 shares.
VanEck Video Gaming and eSports ETF (ESPO)
VanEck Video Gaming and eSports ETF offers exposure to global companies involved in video-game development, e-sports, and related hardware and software by tracking the MVIS Global Video Gaming and eSports Index. ESPO holds 29 stocks in its basket with a moderate concentration on the top firms. VanEck Video Gaming and eSports ETF is tilted toward American firms, accounting for 37% of the portfolio, whereas Japan and China round off the next two spots with double-digit allocations each (read: Gaming ETF Hits New 52-Week High).
VanEck Video Gaming and eSports ETF gathered $331.1 million in its asset base while trading an average daily volume of 32,000 shares. ESPO charges 57 bps in annual fees from investors.
Pacer BlueStar Digital Entertainment ETF (ODDS)
Pacer BlueStar Digital Entertainment ETF aims to offer investors exposure to globally listed companies and depositary receipts that generate the majority of their revenues from online gambling, video game development or eSports. It follows the BlueStar Global Online Gambling, Video Gaming, and eSports Index and holds 48 stocks in its basket with concentration among the top firms.
Pacer BlueStar Digital Entertainment ETF has an AUM of $1.2 million and charges 60 bps in annual fees. It trades in an average daily volume of under 1,000 shares.
Amplify Video Game Leaders ETF (GAMR)
Amplify Video Game Leaders ETF offers exposure to global companies in the video gaming value chain, including game development, publishing, mobile and online games, GPUs, development platforms, supporting software, hardware, peripherals, and the metaverse. It tracks the VettaFi Video Game Leaders Index and holds 21 stocks in its basket with a concentration among the top firms.
Amplify Video Game Leaders ETF has amassed $44.7 million in its asset base and charges 59 bps in annual fees. It trades in an average daily volume of 2,000 shares.
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