Analysts called Netflix the “quarantine king” when the company gained 15.8 million subscribers in the first quarter. Six months later, this title passed to the video games and esports market: quotes of public companies in the gaming segment increased by 77%, and Netflix quotes — only by 44%.
According to Bloomberg, since the beginning of the self-isolation regime in March, the Solactive Video Games & Esports index has grown by 77%, and the profitability of exchange-traded funds (ETFs) of gaming companies in 2020 amounted to more than 50%. Individual companies also recorded revenue growth. Among them are Electronic Arts (21%), Take-Two Interactive (54%), Tencent (29%) and others.
According to analysts, the profitability of the video games and esports market will continue to grow even after the end of the pandemic.
Nevertheless, some investors are cautious and are in no hurry to invest in video games and esports. Bloomberg calculated that although the average yield of “cloud” ETFs is 49%, they received eight times more money from investors than gaming ETFs with a yield of 56%.
This behavior is attributed to the fact that investors may not fully understand the potential of the game industry.
ETFs are exchange-traded funds that collect shares of several companies at once in one place. Through the purchase of the fund’s securities, the investor invests in gaming companies whose shares are in the EFT pot.
Solactive Video Games & Esports is an index that tracks the financial condition of the largest organizations in the video games and esports market (with a minimum market capitalization of over $200 million).
Also on the topic:
- Electronic Arts called the last quarter unprecedented for its businessThe main thing from the Take-Two report: the growth of digital sales and revenue from microtransactions
- Tencent’s quarterly revenue was $16.2 billion, and online gaming revenue increased by 40%
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