Meanwhile, a multitude of such events fill calendars around the world and everyone can watch via various streams. “Gaming has arrived in the middle of society,” according to a study by the IT industry association Bitkom e. V. According to this study, 50 percent of Germans already play video or computer games at least now and then (source: Bitkom, “Halb Deutschland spielt Video- oder Computerspiele,” August 23, 2021). Germany is no exception! eSports and gaming are booming worldwide. With the index certificate on the Global eSports & Gaming Index (Net Return) (EUR) investors can benefit from an upward trend in the global eSports and gaming market. In the first half of this year, a large proportion of the stocks included in the index came under significant pressure, and so did the index. Nevertheless, the index is still performing significantly better than the DAX and EuroStoxx50. Since the end of June, however, the index has recovered significantly and indicates a breakout from the downward trend formed since the end of November 2021.

According to a study by Mordor Intelligence, the gaming market was worth around US$198 billion in 2021. According to the experts, the market volume could grow to almost 340 billion US dollars by 2027. The coronavirus has ensured above-average growth in recent years. Thousands of new players are now logging on to Elden Ring, Fortnite, Anno 1800 or Lost Ark on consoles or laptops.

Business is booming

The gaming boom is not only setting new sales records in Germany, the industry is also flourishing worldwide. Last year, Xbox manufacturer Microsoft threw its hooks into the world’s leading game developer, Activsion Blizzard. The software giant plans to invest more than $68 billion to expand this business. Nintendo and Electronic Arts are also big players. Nevertheless, the barriers to market entry for new game developers are not particularly high. Gaming apps are an easy way to pass the time waiting for the bus or the train ride. It is therefore not surprising that tech giants such as Meta Platforms (formerly Facebook) and Netflix have now also entered the gaming market.

However, the share price performance of some gaming companies in recent months has shown that these stocks are not free of risk. For example, corona measures have been scaled back in many places, and sports and recreational activities have been allowed. This dampened the appetite for console games and was recently also reflected in the figures of some groups. Activision Blizzard, for example, reported a significant drop in profits and sales for the first half of 2022 compared to the same quarter of the previous year. However, this development by no means applies to the entire sector. Electronic Arts, Hasbro and Take Two were able to increase their sales most recently. Nevertheless, these shares were also unable to escape the general turbulence on the stock markets. Rising yields, the situation in Ukraine and fears of a recession put pressure on share prices in the first half of the year.

In recent weeks, the situation on the bond market has visibly eased and yields came back significantly. This supported the stock markets. In addition, there were in part good corporate news. Unity Software, for example, is possibly planning to spin off its China business. The semiconductor manufacturer AMD reported record figures for Q2. The shares of AMD, Nvidia, Roblox and Unity Software rose by double digits compared to the previous week and thus supported the Global eSports & Gaming Index (Net Return) (EUR).

Compact index investment

The index contains up to 25 companies that, among other things, are active in the development or marketing of video games, offer consoles and accessories, or organize eSports events. This means that the investment risk is broadly diversified. In addition to the companies already mentioned, the index includes BANDAI NAMCO Holdings Inc, Facebook Inc, Microsoft Corp, Netflix Inc and Sony. The stock index is reviewed and adjusted semi-annually. Net dividends are reinvested. However, if the price of one or more stocks falls, the price of the index may also fall, resulting in price losses for the index certificate. In mid-June, the index marked its most recent low at 740 points. Since then, the Global eSports & Gaming Index (Net Return) (EUR) gained double digits and now indicates a breakout from the downtrend formed since November 2021.

Index certificate on the Global eSports & Gaming Index for speculation that the index will rise.

*The issuer, UniCredit Bank AG, is entitled to terminate the certificate on an ordinary basis and to redeem it at the respective redemption amount; Source: HypoVereinsbank onemarkets; as of: 03.08.2022; 11:00 a.m.

Photo credit: mauritius images: Dmytro Sidelnikov / Alamy

The post eSports and Gaming Index – Nvidia, Roblox and Unity Software inspire! appeared first on onemarkets Blog (HypoVereinsbank – UniCredit Bank AG).