16-year-old Kyle ‘Bugha’ Giersdorf from Pennsylvania celebrates winning the Fortnite World Cup1

Fortnite, the free-to-play, multi-faceted online video game, has taken the gaming world by storm since its debut in 2017.  Quite simply, Fortnite pits 100 empty-handed players against each other on a virtual island, as they battle to be the last person standing.  Originally launched by Epic Games in 2017, this multi-player enterprise earned $2.4 billion in revenue last year alone1 propelling it into the rarefied air of top-tier video games.

About 40 million of Fortnite’s more than 250 million registered players competed in online qualifying over 10 weeks for the opportunity to come to New York for the finals. The 200 finalists (average age: 16) hailed from 34 different countries around the world.  The winner, 16-year-old Kyle ‘Bugha’ Giersdorf, was awarded $3 million.

 

 

From recent efforts to make esports a 2024 Olympic event,2 to universities like Robert Morris and University of California at Irvine offering scholarship money to high school students who are exceptional at esports,3 eSports is no longer just a leisure activity for distracted youth.

 

 

GAMR, ETF Managers Group’s Video Game Tech ETF is a globally diversified, liquid, exchange traded fund for investors who are looking to participate in the growth of the video gaming theme.  GAMR offers representation of the entire gaming ecosystem, which includes the full range of companies that contribute to esports events.  These essential contributors cover the spectrum, including Graphics (NVIDIA), Console providers (Sony, Microsoft), and broadcasters of events (Alphabet, YY, Bilibili).  We include Tencent as a major stakeholder, as they own 40% of Epic Games, the maker of Fortnite.  This list of participants comprises approximately 22% of the ETFMG Video Game Tech ETF (GAMR).

 

 

Summary

While baby boomers struggle with the idea of playing video games as a competitive sport, the rest of the world has already made the adjustment, as esports continues to expand its footprint on society.   In 2017, Americans spent 355 billion minutes watching Esports on Twitch and YouTube, which grew at a rate of 22% from the prior year.5   An effective way to capture the success of not only esports, but the entire gaming ecosystem, is by investing in GAMR, ETF Managers Group’s Video Game Tech ETF.

 

Sources

1. https://www.theguardian.com/sport/2019/jul/30/fortnite-world-cup-esports

2.  https://www.businessinsider.com/esports-in-consideration-for-2024-olympics-2017-8

3. https://www.scholarships.com/financial-aid/college-scholarships/sports-scholarships/esports-scholarships-scholarships-for-gamers/

4. https://esportsobserver.com/esports-scholarships/

5. https://www.goldmansachs.com/insights/pages/infographics/e-sports/index.html?cid=sch-pd-bing-esportshub-searchad-201810—–&mkwid=FQzOon5B

Carefully consider the Fund’s investment objectives, risks, and charges and expenses before investing. This and other information can be found in the Fund’s summary or statutory prospectuses. Please read the prospectus carefully before investing.

For complete holdings info, visit the fund page.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility. Video Game Tech Companies face intense competition, both domestically and internationally, may have limited product lines, markets, financial resources or personnel, may have products that face rapid obsolescence, and are heavily dependent on the protection of patent and intellectual property rights. Video Game Tech Companies are also subject to increasing regulatory constraints, particularly with respect to cybersecurity and privacy. Such factors may adversely affect the profitability and value of such companies. Investments in foreign securities involve political, economic issues and currency risks, greater volatility and differences in accounting methods. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Investments in smaller companies tend to have limited liquidity and greater price volatility than large capitalization companies. The Fund’s return may not match or achieve a high degree of correlation with the return of the EEFund Video Game Tech Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index. Diversification does not guarantee a profit, nor does it protect against a loss in a declining market

The Fund is distributed by ETFMG Financial LLC.

Author Portrait
With more than 30 years’ experience in investment management, James brings a wealth of experience in global markets to ETFMG’s platform. Prior to joining ETFMG, James held Senior Portfolio Management roles at Deutsche Bank, Geode Capital Management, and SSgA, where he was a member of the team that in 1994 launched the first-ever ETF. James holds a Bachelor of Science degree in Applied Mathematics from the University of Massachusetts, Amherst.