A Canadian ETF executive explains his outlook for the gaming investment market.
Raj Lala: Impressed by Gaming Revenue Models youtu.be
2020 turned out to be the biggest year ever in gaming spending, but 2021 arrived with many questions about the market's long-term growth potential.
To review the year in gaming investments and look ahead at what’s to come in 2022, the Investing News Network (INN) spoke with Raj Lala, president and CEO of Evolve ETFs, about his takeaways in this space.
Evolve ETFs is involved in the gaming industry by offering the Evolve E-Gaming Index ETF (TSX:HERO) to investors interested in the broad gaming sector.
“You’re definitely seeing this pattern of growth as it relates to the overall engagement,” Lala told INN. The exchange-traded fund executive indicated that he’s noticed a 30 percent uptick for gaming investments in 2021.
In a world affected by the global COVID-19 pandemic, gaming gained more space in the minds of consumers as a method of distraction, creating a general increase in the number of people playing games day in and day out.
The executive highlighted mobile gaming as a core pillar of the industry, particularly when it comes to skepticism surrounding gaming investments.
He noted that revenue models have drastically changed for the gaming market. Whereas in the past spending would stop as soon as a game was purchased, Lala explained that today games can continue to attract revenue through subscriptions and other pay-to-play models.
“These companies from an investment perspective — many of them have developed a very comprehensive ecosystem of revenues for themselves, and that’s why we find the space so exciting,” he said.
In November, the NPD Group issued a report indicating the Q3 2021 period saw a total tally of US$13.3 billion in gaming spending globally. This total represents a 7 percent uptick from the same period in 2020.
When it comes to mobile gaming spending, an area of massive growth highlighted by Lala, it’s been another strong year. Research firm Sensor Tower indicates that spending for mobile reached US$89.6 billion.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.