The gaming industry is gearing up for its biggest event of the year.
The Electronic Entertainment Expo, known as E3 for short, will kick off Tuesday and feature games, products and announcements from the most well-known names in the video game space, which research firm Newzoo estimates will be worth almost $150 billion in 2019.
But while game publishers will largely be pushing their products at E3, VanEck's head of ETF product, Ed Lopez, says that investors can get in on another space in which many of these same publishers have been investing: esports.
Known as electronic sports, or competitive video gaming, esports is projected to generate over $1 billion in revenue this year, and over a third of that revenue will come from the North American market.
"It's a new generation with technology that has really facilitated online gaming, interactive content and new outlets for entertainment for a younger generation that plays games," he said Friday on CNBC's "ETF Edge." "Now they have the opportunity to see people play games at a very high level, and I think that's the reason why you're seeing [the growth of esports]."
And that $1 billion revenue projection comes from a "whole new ecosystem" that Lopez emphasizes will be largely derived from media rights deals, advertising and sponsorships.
VanEck wanted to give investors a way to play the esports ecosystem and launched the VanEck Video Gaming and Esports ETF (ESPO) in October as a result. That ETF is outperforming the market this year, up 23% compared to the S&P 500's 15% rally.
A second esports-focused ETF was also launched last Tuesday, the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD). Unlike ESPO, which is largely made of game publishers to also allow for a more broad-based gaming industry play, NERD is made of a variety of publishers, streaming network operator and hardware companies -- over half of which are based in Asia given how established the esports industry is in that region.
Since launching on Tuesday, NERD is up 2%.
Both ETFs feature U.S. game publishers Activision Blizzard, which launched a professional league for their "Overwatch" game in 2018 and has confirmed the launch of a "Call of Duty" league as well, and Take-Two, which currently runs the NBA 2K League based on their NBA 2K game franchise. Chipmaker Nvidia also features prominently given the company's key role as a hardware provider.