However, Sony’s video game output is massive, making it the world’s biggest console manufacturer and game publisher by revenue. Will 2023 and beyond see yet more consolidation among video game companies, or will increased regulatory oversight put the major stocks off? Maintaining independence and editorial freedom is essential to our mission of empowering investor success.
The report goes on to further outline that this growth will be driven by the uptick in internet and cellular connections and government initiatives for projects such as smart cities. There are many reasons to like this long-standing business, which has been a video game industry stalwart for decades and created some of the medium’s most memorable gaming experiences. Most recently, Capcom’s Resident Evil Village topped 5 million units sold since its May 2021 launch. Video game developer and publisher Capcom is thriving, thanks to successful releases that have strengthened its key franchises and produced impressive sales and earnings growth. In addition to its Resident Evil and Monster Hunter franchises, the company’s properties include Mega Man, Devil May Cry, and Street Fighter. Like its rival Microsoft, Sony is much bigger than its gaming division, with operations in film, consumer electronics, music and more.
It’s the second-largest video game company by revenue and maintains a leading position in the sports subgenre of gaming. Tencent is a Chinese conglomerate and the most valuable company on the Hong Kong Stock Exchange. While it also has huge operations outside of the gaming sphere, its investments in video games led to it topping the chart of companies in the sector by revenue in 2019. The video game industry is vast – with expected revenues of $200 billion in 2022 – and features a wide range of companies both big and small.
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Here are 10 stocks to watch in the sector, split across hardware manufacturers, developers and retailers. People in most areas are no longer under lockdown, though, and with the economic picture looking poor video games may be seen as an unnecessary luxury. This has led to fears of an impending industry sell off, which were only fuelled further by a poor Q earnings season. Market data firm Ampere Analysis has announced that it expects sales to drop this year for the first time since 2015. According to market research firm Grand View Research, the global video game market was over $195 billion in 2021 and is expected to grow at a compound annual growth rate of 12.9% through 2030. Capcom has long been a major player in the video games industry and remains so today.
The video game industry is involved in the development, marketing, and sale of video game hardware and software. Video game industry sales generally performed well early in the COVID-19 pandemic as business shutdowns and social-distancing measures limited peoples’ entertainment options. Because consumers can play video games in the home, they have become a popular option. One of the industry’s challenges retaining newly minted gamers as employees return to work at offices amid the reopening of the the economy after the COVID-19 pandemic.
GameStop is the largest video game retailer in the world, with 1,000s of stores across North America, Europe and Australia. Often, investors are pouring over upcoming release schedules to decide where sales might come in. Video games are generally announced years ahead of their release, but delays and cancellations are common. However, concerns about Microsoft restricting access to key titles saw the US regulator vote to block the deal in December 2022. With the company planning on leveraging Activision Blizzard’s key IP to boost subscriptions to its Xbox Game Pass service – and console sales – the decision is a major blow to Microsoft’s plans.
Roblox Corporation (NYSE:RBLX)
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“Take-Two is one of the larger third-party video game publishers and owns one of the largest most well-known video game franchises in Grand Theft Auto. With the acquisition of Zynga, the company is now also one of the largest mobile game publishers. We believe the firm is well positioned not only to capitalize on the success of GTA but also to continue diversifying its revenue beyond its signature franchise. We expect Take-Two to continue to benefit from the high demand for consoles, the ongoing revitalization of PC gaming, and the growth of mobile gaming. Therefore, ranking companies by only one growth metric is susceptible to the accounting anomalies of that quarter that may make one or the other figure unrepresentative of the business in general.
Undervalued Video Game Stocks
We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Provide specific products and services to you, such as portfolio management or data aggregation. During 2022, the gaming index fell 16.1%, outperforming the 20.7% decline in the overall U.S. stock market.
The firm owns one of the most well-known massively multiplayer franchises in China—Fantasy Westward Journey. Over the past decade, NetEase has capitalized on the industry shift toward mobile gaming and now focuses on developing innovative, high-quality, and long-cycle games with a mobile-first approach. Over the past years, the firm has established iconic titles such as Onmyoji, Knives Out, and Identity V. Every year, the company publishes dozens of games across almost every genre and game play. In addition, NetEase is also collaborating with firms such as Blizzard, Marvel, and Microsoft to release games based on famous global intellectual property like Diablo, Harry Potter, and Lord of the Rings.
Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers. Like many sectors, video game stocks saw a sharp decline at the outset of the Covid-19 pandemic, as market panic triggered a global sell-off. However, after the initial fallout investors realised that the gaming industry could seriously benefit from a populace that’s stuck at home – as they did, sending share prices rallying. “NetEase started as a Chinese internet portal in the late 1990s but has now become the second-largest mobile game company in the world.
Supply chain issues related to the latest game consoles have been hurting sales, but the future looks bright for the video game industry. The companies were then ranked according to Insider Monkey’s survey of 895 hedge funds for the second quarter of this year. This growth has also led to optimistic estimates for the video game industry. For instance, a research report from Markets Research Future estimates that the gaming market will grow at a strong compounded annual growth rate of 13% to be worth a staggering $547 billion by the end of 2030.
ESPO’s total return was -32.4% over the past 12 months versus the Russell 1000’s total return of -12.5%. Microsoft owns Minecraft developer Mojang, Elder Scrolls developer Bethesda, and it agreed to acquire video game juggernaut Activision Blizzard in a blockbuster $70 billion deal. Activision Blizzard owns some iconic franchises, including Call of Duty, World of Warcraft, and Candy Crush. Gaming hardware stocks don’t end with the ‘big three’, and there are lots of other options you can investigate. One is Corsair Gaming, a computer hardware and peripherals company that sells high-end hardware to the PC gaming market. The company’s gaming strategy has shifted in recent years, away from a total focus on console sales and towards its Xbox Game Pass subscription model.
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Video game companies are competing to provide the most popular form of entertainment. Get the most updated comparison by key indicators and discover each stock’s price target as well as recommendations by top Wall Street experts. “Roblox operates an online video game platform that lets gamers create, develop, and monetize games for other players. The firm offers its developers a hybrid of a game engine, publishing platform, online hosting and services, marketplace with payment processing, and social network.
Another report from KBV Research estimates that the market will grow at a similar CAGR of 12% to sit at $413 billion by 2028 end. Microsoft is primarily a productivity software and cloud computing company, but the tech giant is also one of the most prominent players in the video game industry. Microsoft is behind the Xbox game console, its Windows operating system is the de facto standard for PC gaming, and it owns a wide variety of game studios. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
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The company had seen a significant recent uplift in revenues thanks to COVID-19, which had driven demand for its products. But its share price has struggled since the listing, halving from $34 down to below $17. Manufacturing bottlenecks have seen Switch sales slump, and with no tentpole releases to prop things up, Nintendo has seen revenue and income fall.