Video Gaming, Esports Taking Media and Entertainment to the Next Level

March 2019

ESPO® VanEck Vectors® Video Gaming and eSports ETF Video gaming evolution and the rise of esports

Technology advancements have made games more complex, interactive, and dynamic

. Development and proliferation of video games mirrors the dawn of the internet, which featured a long research incubation period, followed by explosive growth, as the public adapted to the new technology

Tennis for Two Activision Formed PC Gaming, Internet Rise of Esports First known video game First third-party video 3D graphics, local area network Massive growth in viewership created for entertainment game developer (LAN) parties, multiplayer online and big brand sponsorships games

1958 1972 1979 1985 1990s 2000s 2010s

Atari 2600 NES - Nintendo Mobile Gaming First home console with Entertainment System Introduction of “apps” and game cartridges Revolutionized U.S. gaming multiplayer phone games industry

Source: VanEck.

2 What are esports?

Esports are a form of competitive video gaming, commonly held as organized, multiplayer spectator events, often between professional players

. A broad consortium of companies are actively investing in esports related ventures, with a growing number of collaborations between video game developers, tech companies, and traditional sports franchises . Esports are a global phenomenon, with the most notable participation in Asia Pacific and North America

Type of Company or Organization (Example) Example of Esports Investment • Develop and publish video games Video Game Companies (Activision, Tencent) • Develop and support professional esports leagues • Franchise fees to league owners Professional Esports Teams (Team Liquid, Cloud9) • Corporate sponsorships • Investing in new infrastructure projects Esports Venues (Barclays Center, Staples Center) • Utilizing existing arenas and venues for esports events • Technology infrastructure to support massive online viewership Online Streaming Services (Twitch.tv, YouTube.com) • Facilitate sponsorship of individual streaming personalities • Invested in streaming services Tech Companies (Amazon, Microsoft) • Build consoles, hardware used to play video games • Scholarships to esports athletes Colleges and High Schools (NYU, UC Irvine) • Gaming tech labs • Investments and sponsorships of professional esports teams Professional Sports Organizations (Philadelphia 76ers, NY Yankees) • Shared resources of team equipment and facilities

Cities and Municipalities (Arlington TX, Sydney AU) • Dedicated esports arenas built

Traditional Brands (Mercedes, Red Bull) • Advertisements targeted towards esports viewers and participants

Media Companies (Disney, Turner Sports) • Licensing rights for live tournament broadcasts

Source: VanEck.

3 Video game makers winning in esports

Video game companies are becoming global entertainment powerhouses

. Globally, video game maker revenues have grown 12% yearly since 2015 . Game publishers develop and market video games and own the commercial rights to the games . Esports has created new potential revenue streams from game publisher fees, media rights, merchandise, ticket sales, and advertising . Publishers are likely going to continue to invest in new technology developments while competing to maintain market share and producing games people want to play

Global Video Games Revenues Esports Revenue Streams as of 2018

2021* 19%

2020*

2019* 18% 40% Esports

Billions ($) 2018* revenues generated directly by 13% 2017 video game 11% publishers 2016

2015 Game Publisher Fees Merchandise & Tickets Sponsorship Advertising 0 40 80 120 160 200 Media Rights

Source: Newzoo Global Games Market Report, 2016, 2017, 2018. Past performance is not indicative of future results; current data may differ from data quoted. * Projected.

4 Invest in the future of sports

. The competitive video gaming audience is expected to reach 454 million people globally in 20191 — Esports investment is growing exponentially including audience, participants, sponsorships, advertising, and team franchises — Cultural paradigm shift as esports athletes and competitions are considered by many to be on par with traditional sporting events — Major investments by video game developers, broad tech companies, professional sports teams, local cities, and municipalities

. Esports revenue growth has averaged almost 40% yearly since 2015, supported by a young, affluent audience2 — Esports revenue has nearly tripled over the last three years — Evolving revenue streams as variety of investors seek to monetize esports’ exploding popularity — Audience base is young, has money, and appears to be willing to spend over long time horizon

. Dynamic, evolving revenue stream3 — As this segment evolves, companies from different industries continue to invest in new business lines — Since 2014, the global average revenue per person of esports enthusiasts has increased by 175%3

1 Newzoo Global Esports Market Report, 2019. 2 Newzoo Global Esports Market Report, 2017, 2018, 2019. 3 Newzoo The Global Growth of Esports, 2014. Global Esports Market Report, 2018.

5 Strong revenue growth

Esports revenue is forecasted to reach upward of $1.7 billion by 2021 from a projected $1.09 million in 2019

Esports Revenue Growth 2015-2022 2,000

1,800

1,600

1,400

1,200

Millions ($) Millions 1,000

800

600

400

200

0 2015 2016 2017 2018 2019* 2022*

Source: Newzoo. Global Esports Market Report 2017, 2018, 2019. Past performance is not indicative of future results; current data may differ from data quoted. * Projected.

6 Revenues are global

International esports leagues . Global leagues comprised of competing teams from local markets . Franchisees have paid up to $20 million per team to enter professional leagues owned by video game companies

Global investments into esports arenas . Private companies, municipalities, and cities around the world have built dedicated esports arenas . Locations include Las Vegas, Nevada; Arlington, Texas; Sydney, Australia; Chongqing, China

Esports Revenues by Region as of 2018

18%

38% 6%

China S. Korea 38% North America Rest of World

Source: Forbes.com, Las Vegas Review Journal, ABC.net.au, SportsBusinessDaily.com, Newzoo Global Esports Market Report 2018.

7 Viewership larger than traditional sports

League of Legends 2018 world finals attracted more viewers than the deciding games of MLB World Series, NBA Finals, and the NHL Stanley Cup

US Sports Viewership vs eSports Unique Viewers 120 Esports events Traditional sporting events 100

40 Millions Millions of Viewers 20

0 NFL Superbowl LOL World Mid-Season LOL World Intel Extreme CFS World College Football MLB World NBA Finals NHL Stanley 2018 Championship Invitational Championship 2017 Championship Championship Series Game 5 Game 4 Cup Finals 2018 2018 2017 2017 2018 2018 2018 Game 4 2018

eSports audience growth 2014-2022 700 645

600

500 454 395 400 335 281 300 235 205

Millions Millions of People 200

100

0 2014 2015 2016 2017 2018 2019* 2022*

Source: Sports Media Watch, Statista.com, ESPN.com, ProgrammingInsider.com, Riot Games, dotesports.com, lolesports.com, Newzoo Global Esports Market Report 2018, 2017. Newzoo The Global Growth of Esports 2014. Past performance is not indicative of future results; current data may differ from data quoted. * Projected.

8 Young and affluent audience

. Captivated consumer with disposable income willing to spend on entertainment — 43% of esports enthusiasts have annual household income over $75k — 31% of esports enthusiasts have annual household income over $90k

. Potential for long and loyal brand relationships — Esports consumer base skews much younger compared to traditional sports fans — More years of purchasing video game products and esports related entertainment

Average Age of U.S. Sports Fan versus Esports Enthusiast 70

40 Age 30

0 PGA MLB NFL NHL NBA Esports

Source: Street & Smith’s SportsBusiness Journal, Interpret, LLC. As of 2017.

9 Attracting large investors

Esports-related mergers and acquisitions demonstrate the worldwide business potential of the industry

. Majority of deals are primarily from established tech companies, but there has been interest from non-tech related industries (such as, United Talent Agency)

Year Acquiring Company Acquired Company Details

Tencent invested $632 million into Douyu, a gaming and 2018 Tencent Douyu entertainment live streaming platform in China

United Talent Agency acquired esports talent agency Press 2018 United Talent Agency Press X and Everyday Influencers X and esports management company Everyday Influencers for an undisclosed amount

Alibaba invested $150 million into the International e-Sports 2016 Alibaba International e-Sports Federation Federation, whose mission is to promote esports as a traditional sport

Activision Blizzard paid $46 million for Major League 2016 Activision Blizzard Major League Gaming Gaming, a specialist in esports events

Amazon paid $970 million for Twitch.tv, a live streaming 2014 Amazon Twitch video platform that initially focused on video game streaming

Source: Business Insider, Mashable, Variety, Major League Gaming, China Money Network.

10 Pure and targeted index

. Companies must derive at least 50% of total revenues from video gaming and/or esports to be initially eligible for the index — Revenue requirements ensure targeted exposure to video gaming and esports companies — Focus on the largest pure-play video gaming companies — Modified market cap weighting ensures that no single company dominates the index . What companies don’t meet inclusion requirements? — Companies like Microsoft (Xbox), Sony (PlayStation), and Amazon (Twitch.tv) generate substantial revenue dollars from other sources besides video gaming and esports related business lines — Due to index revenue percentage rules, these companies are excluded to maintain the index’s focus on video gaming and esports

Included in index Reason for inclusion Excluded from index Reason for exclusion

Activision Blizzard Video game developer Alphabet Tech conglomerate (based on revenue test)

Nintendo Video game developer Amazon.com Tech retail (based on revenue test)

Tencent Holdings Video game developer Microsoft Tech conglomerate (based on revenue test)

NVIDIA Hardware company Sony Tech conglomerate (based on revenue test)

Advanced Micro Devices Hardware company Intel Hardware (based on revenue test)

Source: MVIS.

11 Index methodology

MVIS Global Video Gaming and eSports Index

. Selection universe: Global universe of equity securities — Freely investable for foreign investors — Market capitalization and liquidity screens . Revenue analysis — Company must generate at least 50% of revenues from video gaming and/or esports to be initially eligible — Software and hardware companies may also be included if their end product is used in video gaming systems . Index portfolio size — At least 25 securities . Buffer rule — At each review, companies which generate less than 25% of revenues from video gaming and/or esports are removed from the index . Modified market cap — Individual company weights are capped at 8%

Source: MVIS. See disclosures at the end of the presentation.

12 VanEck Vectors Video Gaming and eSports ETF (ESPO)

VanEck Vectors Video Gaming and eSports ETF (ESPO) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS® Global Video Gaming and eSports Index (MVESPO). The Index is a global index that tracks the performance of the global video gaming and esports (also known as electronic sports) segment.

Fund Details • Competitive video gaming audience Fund Ticker ESPO expected to reach 454 million people Intraday NAV Ticker ESPO.IV globally in 20191

Index Ticker MVESPOTR • Esports revenue growth has averaged Inception Date 10/16/2018 almost 40% yearly since 2015, supported by a young, affluent audience2 Gross Expense Ratio (%) 0.60

Net Expense Ratio3 (%) 0.55 • Companies must derive at least 50% of total revenues from video gaming and/or esports Listing Exchange NYSE Arca to be initially eligible for the Index Dividend Frequency Annually

1 Newzoo Global Esports Market Report, 2019. 2 Newzoo Global Esports Market Report, 2017, 2018, 2019. All information as of 12/31/2018 and subject to change. The Index is unmanaged and not a security in which investments can be made. You cannot invest in an Index. 3 Expenses are capped contractually until 2/1/2020. Cap excludes acquired fund fees and expenses, interest, trading, taxes, and extraordinary expenses. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

13 Fund performance

LIFE ESPO Performance History (%) as of 3/31/2019 YTD 1YR 3YR 5YR 10/16/2018 NAV 17.51 ------2.40 Share Price 18.30 ------2.82 MVESPO Index 17.48 ------3.27

Fees and Expenses1 Management Fee (%) 0.50 Other Expenses (%) 0.10 Gross Expense Ratio (%) 0.60 Fee Waivers and Expense Reimbursement (%) 0.05 Net Expense Ratio (%) 0.55

Source: VanEck, and FactSet. 1Expenses are capped contractually until 2/1/2020. Cap excludes acquired fund fees and expenses, interest, trading, taxes, and extraordinary expenses. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. The table presents past performance which is no guarantee of future results and which may be lower or higher than current performance. Returns reflect applicable fee waivers and/or expense reimbursements. Had the Fund incurred all expenses and fees, investment returns would have been reduced. Investment returns and Fund share values will fluctuate so that investor’s shares, when redeemed, may be worth more or less than their original cost. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV. Index returns assume that dividends of the Index constituents in the Index have been reinvested. Investing involves risk, including loss of principal. Please call 800.826.2333 or visit vaneck.com for performance current to the most recent month ended. All indices are unmanaged and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the fund. An index’s performance is not illustrative of the fund’s performance. Certain indices may take into account withholding taxes. Indices are not securities in which investments can be made. See disclosures at the end of this presentation.

14 ETF disclosure

This material does not constitute an offer to sell or solicitation to buy any security, including shares of any fund. An offer or solicitation will be made only through a fund’s prospectus or summary prospectus and will be subject to the terms and conditions contained therein. This material and the information provided herein are not directed at or intended for distribution to any person (or entity) who is a citizen or resident of (or located or established in) any jurisdiction where the distribution of these materials and/or the purchase or sale of interests of a Fund would be contrary to applicable law or regulation or would subject a Fund to any registration or licensing requirement in such jurisdiction. Persons who wish to review this material are required to inform themselves about and to observe any legal or regulatory restrictions which may affect their eligibility to make an investment in a fund. Professional advice should be sought in cases of doubt.

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Any projections, market outlooks or estimates in this material are forward-looking statements and are based upon certain assumptions that are solely the opinion of VanEck. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. Further, any information regarding portfolio composition, portfolio composition methodology, investment process or limits, or valuation methods of evaluating companies and markets are intended as guidelines which may be modified or changed by VanEck at any time in its sole discretion without notice.

The performance data quoted represents past performance. Past performance is not a guarantee of future results.

Forecasts, estimates, and certain information contained herein are based upon proprietary research and the information contained in this material is not intended to be, nor should it be construed or used as investment, tax or legal advice, any recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security. References to specific securities and their issuers or sectors are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities or gain exposure to such sectors. The fund(s) may or may not own the securities or be exposed to the sectors referenced and, if such securities are owned or exposure maintained, no representation is being made that such securities will continue to be held or exposure maintained.

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15 ETF disclosure

Indices are unmanaged and are not securities in which an investment can be made. Index returns do not reflect a deduction for fees & expenses. MVIS® Global Video Gaming and eSports Index is the exclusive property of MVIS (a wholly owned subsidiary of Van Eck Associates Corporation), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MV Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. The VanEck Vectors Video Gaming and eSports ETF is not sponsored, endorsed, sold or promoted by MV Index Solutions GmbH and MV Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Shares may trade at a premium or discount to their NAV in the secondary market. You will incur brokerage expenses when trading Fund shares in the secondary market. Past performance is no guarantee of future results. Returns for actual Fund investments may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.

Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck. Principal VanEck Vectors Video Gaming and eSports ETF (the “Fund”) Risk Factors: An investment in the Fund may be subject to risks which include, among others, investing in the video gaming and esports companies, equity securities, communication services and information technology sectors, medium-capitalization companies, issuer-specific changes, special risk considerations of investing in Asian, Japanese and emerging markets issuers, foreign securities, foreign currency, depositary receipts, market, operational, cash transactions, index tracking, authorized participant concentration, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Medium-capitalization companies may be subject to elevated risks.

For a more complete description of these and other risks, please refer to the Fund’s prospectus.

16 Definitions

Esports : Competitive gaming at a professional level and in an organized format (a tournament or league) with a specific goal (i.e., winning a championship title or prize money) and a clear distinction between players and teams that are competing against each other. Esports Enthusiasts: People who watch esports more than once a month. Esports Event: A competitive gaming tournament or league organized by a third party, where players and/or teams compete against each other with the goal to win. Media Rights Revenue: Revenues generated through media property, including all revenues paid to industry stakeholders to secure the rights to show esports content on a channel. Merchandise and Tickets Revenue: Revenues generated by the sales of tickets for live esports events and merchandise. Advertising Revenue: Revenues generated by advertisements seen by viewers via esports content, which are paid for per impression. Sponsorship Revenues: Revenues generated by teams and organizers through sponsorship deals. Game Publisher Fees: Revenues paid by game publishers to independent esports organizers for hosting events. This excludes investments or spending by game publishers on their own events, as we consider that to be part of their regular marketing efforts.