General Industry Update

The global games market is set to bounce back in 2024, according to a market trends report from industry watch site Newzoo. Video games will build on their 2023 rebound after a decline in 2022, with the Xbox Series and PlayStation 5 driving growth alongside live-service games and back catalogue sales. 

The report highlights that Xbox is poised to enter the mobile market in 2024 with its own app store following Microsoft’s acquisition of Activision Blizzard.¹ And mobile gaming may see an overall boost thanks to a recent court victory by Epic Games, maker of “Fortnite” (and who is 40% owned by Tencent, held by the Fund). 

A federal court jury in San Francisco found in Epic’s favour by declaring Alphabet Inc engaged in anticompetitive conduct via the Google Play store by denying game makers payment and app distribution methods beyond Google Play. This ruling (though certain to be appealed) could radically alter the mobile app economy and make more games available in more places and with more price competition, as Epic sought court-ordered changes to Google Play policies and not monetary damages.² 

Meanwhile, multi-game subscriptions are reaching their saturation point, according to Newzoo, as players seek more diverse gaming experiences like those offered by “Fortnite” and “ROBLOX.” Because these games are free-to-play experiences, they may be a significant competitor for paid all-you-can-play subscription services. 

And the Newzoo report highlights that though generative AI tools may accelerate game production, they’re unlikely to fundamentally revolutionize the industry in 2024. Developers and players alike will continue to play integral roles in game development and operations throughout the year.³

Company Specific Updates

Nintendo Co Ltd

Nintendo is poised to unveil a new Switch console this year, according to analysts, as the game company banks on the enduring popularity of characters like Mario and Zelda. The original Switch, launched in March 2017, revolutionized gaming with its hybrid design, allowing seamless transitions between TV play and on-the-go gaming. With over 132.46 million units sold, it stands as Nintendo’s second-most successful console. 

However, after seven years, sales have begun to taper off, prompting anticipation for the “Switch 2” to reinvigorate Nintendo’s console sales, with analysts expecting a rollout in Q4 of this year. 

Details on the new console remain speculative, but analysts expect it will maintain the “Switch 1” hybrid model but with upgraded controller capabilities. Success hinges on product availability, with projections suggesting sales matching the original Switch’s early performance of seven to eight million in its first quarter of sales.⁴ 

Capcom Co Ltd

Capcom announced in January that “Street Fighter 6” has surpassed 3 million units sold globally, leveraging its presence in esports and continuous content updates. The Street Fighter series, which debuted in 1987, remains immensely popular, with cumulative sales exceeding 52 million units worldwide. 

“Street Fighter 6,” released in June 2023 after a seven-year series hiatus, has revitalized the franchise, becoming a cornerstone in the fighting game genre. The game features prominently in esports tournaments, including the Capcom Pro Tour 2023, which boasts a record-high prize purse of $1 million USD. Continuous content updates, collaborations, and accolades, such as winning the Best Fighting Game Award at The Game Awards 2023, have contributed to the game’s success.⁵

This news came as Capcom announced it is poised to meet its full-year guidance for the 11th consecutive year. Capcom reported significant YoY increases in net sales, operating income, and ordinary income for the nine months ended December 31, 2023. Notably, Capcom’s Digital Contents business played a pivotal role in driving global video game software sales to 32.6 million units, a marked increase from the previous year’s 29.1 million units.⁶ 

HERO ETF: Diversified Investing in Video Games

Interested in a diversified approach to investing in video games? Canada’s first esports and gaming ETF, the Evolve E-Gaming Index ETF (HERO ETF), is an index-based exchange-traded fund that invests in the leading video game companies across the globe. To learn more about HERO ETF, please click here: 

Portfolio Strategy and Activity

For the month, Capcom Co Ltd made the largest contribution to the Fund, followed by Konami Group Corporation and Nintendo Co Ltd. The largest detractors to performance for the month were Roblox Corp, followed by Nexon Co Ltd and Embracer Group AB. 



  1. Wijman, T., “Newzoo’s outlook on the market in 2024 featuring insights from leading voices in games,” Newzoo, January 23, 2024;
  2. Bobrowsky, M., “Google Loses Antitrust Case Brought by Epic Games,” The Wall Street Journal, December 11, 2023;
  3. Wijman, T., “Newzoo’s outlook on the market in 2024 featuring insights from leading voices in games,” Newzoo, January 23, 2024;
  4. Kharpal, A., “Nintendo is expected to launch the ‘Switch 2’ console this year. Here’s what to expect,” CNBC, January 7, 2024;
  5. “Street Fighter 6 Tops Over 3 Million Units Sold Worldwide!,” Capcom, January 16, 2024;
  6. “Capcom On Track to Achieve Full-Year Guidance,” Capcom, January 31, 2024;
Header image source: Getty Images Credit: filo
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