Gaming ETFs Score as Web3 Sector Shows Growth Potential
- Gaming ETFs are showing strong performance while SPY struggles in 2025.
- The web3 gaming market is projected to reach $183 billion by 2034.
- Fund flows remain negative across gaming ETFs despite positive returns.
Global video gaming ETFs are delivering impressive returns in 2025 while the broader market faces headwinds, according to data from the etf.com Comparison Tool. This performance comes as research indicates the emerging web3 gaming sector is positioned for long-term growth.
The VanEck Video Gaming and eSports ETF (ESPO) has gained 11.7% year to date, while the Global X Video Games & Esports ETF (HERO) has surged 15.9%, according to etf.com data. These returns stand in stark contrast to the SPDR S&P 500 ETF Trust (SPY), which has declined 5.8% over the same period.
The gaming ETFs' strong performance highlights the sector's resilience during a challenging market environment, offering investors potential opportunities in an industry poised for technological transformation through web3 integration.
Interestingly, this outperformance comes despite negative fund flows. ESPO has seen $13 million in outflows over the past month, while HERO has experienced $1.4 million in redemptions, according to etf.com data. The Amplify Video Game Tech ETF (GAMR) has recorded more modest gains at 3.2% year to date, with $3.7 million in outflows over the past quarter.
Source: etf.com Comparison Tool
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Web3 Gaming's Explosive Potential
The strong performance of gaming ETFs comes as the web3 gaming market shows promising growth prospects. According to a report from Precedence Research, the global web3 gaming market is projected to grow from $37.6 billion in 2025 to $183 billion by 2034, representing a compound annual growth rate of 19.2%.
The report notes that North America currently leads with 36% market share, while Asia Pacific is expected to witness the fastest growth during the forecast period. Play-to-earn games were identified as the dominant segment in 2024, according to the research.
Web3 gaming focuses on player ownership through blockchain technology, allowing gamers to truly own in-game assets and participate in decentralized gaming economies. This shift toward player-centric models is driving market growth, according to the report.
Gaming ETF Top Holdings
While current gaming ETFs don't specifically target web3 gaming companies, they provide exposure to established video game developers and technology companies that could potentially benefit from or participate in the broader gaming ecosystem's evolution.
ESPO's top holdings include traditional gaming powerhouses like Nintendo Co. (NTDOY) (7.7%), AppLovin Corp. (APP) (7.5%) and Tencent Holdings (TCEHY) (7.1%), according to etf.com data. Similarly, HERO features companies like KONAMI Group (KONMY) (8.1%), Nintendo (7%) and Take-Two Interactive Software Inc. (TTWO) (6.4%).
GAMR takes a different approach with its largest allocations to tech giants Microsoft Corp. (MSFT) (10.3%), Advanced Micro Devices Inc. (AMD) (9.7%) and Tencent Holdings (9.3%), companies that provide infrastructure supporting the gaming industry.
The gaming industry continues to evolve with new technologies, showing remarkable resilience even as broader markets struggle through the first months of 2025.
