AFR has a good article on this topic (paywall removed).

Very interesting comments from the fellow interviewed that states the growth of esports is unparrelled across sports products. And that ETFs cannot capture this upside:

"In an industry that was changing week to week with hot brands and high-performing gaming teams winning and losing in real time, the exposure to 30 stocks in a slow-moving index was never going to capture the upside that Larcombe knew was there.

“You need to be long and short and be really active,” he says.

Spurred on by the quiet demand from family offices keen for exposure to high growth and high-return investments, Larcombe started the PAC Global Esports Fund four years ago."

So the trend is real. But the access may not be worth it via an ETF.

Or perhaps it is an advertisement for his private fund.

I don’t think the theme around eSports can be questioned. So, the only bear case here would be do you own the ETF and get the passive returns, or do you own specific individual companies that may outperform the ETF? This is a pretty standard bear case for any ETF.

It can be challenging to reconstruct your notion of an athlete to consider a gamer with his or her fingers wriggling across a controller, but esports are forcing us to rethink traditional sports at a growing rate. Like other organized sports, these players have sponsors, coaches, teams, and practice schedules. They train hard and create cutting-edge strategies. They suffer upsets and enjoy exhilarating wins.

eSports has a much larger and much more diverse audience than most professional sports. Hundreds of millions of individuals across a range of ages, income strata, and backgrounds all over the world are united by their love of video games and competitive gaming.

Check out these articles and posts about the scope and magnitude of eSports – link 1 – link 2 – link 3

Google and youtube these games for some of the most popular today; FIFA, League of Legends, Fortnite, Counter-Strike, StarCraft, Overwatch. I know personally, that Counter-Strike and Starcraft have been played since early 2000s… so games are not always just a fad.

Bottom line. eSports is growing internationally. The eco-system will grow with it, and all the revenues associated with that ecosystem.

It is becoming more accepted that everyone should hold a couple of ETFs in their portfolio. The reasons vary; maybe its core and satellite portfolio method, maybe it’s a lack of share market knowledge, maybe you know shares, but don’t have the time. The ASX is very small, and there is an argument for international exposure in every Aussie’s share portfolio. ETFs offer international exposure with no complexities for your tax or broker.

ASX:ESPO is an ETF. It seeks to track the MVIS Global Video Gaming & eSports Index. Its investment style is replication, and therefore a passive ETF. It is also considered theme based – as the companies in the index must be large and liquid listed companies that generate at least 50% of their revenues from video gaming and/or eSports.

ESPO holdings include companies from; USA, France, Korea, Japan, and others.

It charges you a management fee of 0.55%, or $5.50 for every $1000 invested. This is higher than an ASX200 or ASX300 ETF (such as ASX:A200 which is 0.07% or $0.70 fee for every $1000 invested). You need to decide if this is too high for the theme, being a passive ETF, and how it fits into the rest of your portfolio.

VanEck’s is the firm that operates the ETF. They were founded in the USA in 1955, and commenced operations in Australia in 2013.

It can be challenging to reconstruct your notion of an athlete to consider a gamer with his or her fingers wriggling across a controller, but esports are forcing us to rethink traditional sports at a growing rate. Like other organized sports, these players have sponsors, coaches, teams, and practice schedules. They train hard and create cutting-edge strategies. They suffer upsets and enjoy exhilarating wins.

eSports used to be LAN parties. Friends would bring their computers to each other’s houses, connect them up (on the LAN, or local area network) and play games whilst fuelling themselves with junk food.

Then came dial-up internet. You no longer had to move your computer to your friend’s house, you just dialled into each other over the internet – again playing all night long, fuelled on junk food.

Then came broadband. The same, but faster. Better games, better graphics, still lots of junk food.

Then came actual paid tournaments. Some of the earliest were games called Counterstrike and Starcraft. (watch a few minutes of each – notice the age of the computers, but also the lack of corporate slickness, but feel the love for the game).

Today it has only grown from there – this is what tournaments are today: The International - Dota 2 Championships – up to a $30 million prize pool.

eSports is now a business with revenues. The video game and e-Sports sector has grown into a bona fide industry. The ecosystem consists of game studios, developers, testers, marketers, distributors, and players. Also companies that build specialized hardware, gaming systems, equipment, peripheral devices, and even gaming chairs. Then there are platforms like Steam and Origin that allow you to buy and play licensed games, as well as platforms like Twitch that allow professional gamers to monetize their skills and the audiences that value them.