The video game business is a vast, rapidly expanding industry with substantial long-term growth potential. During the COVID-19 epidemic, the biggest corporations in the sector benefited from a significant increase in demand. Sales have been affected by supply chain concerns with the latest gaming systems, but the video game industry’s future looks bright.
Best Video Game Stocks
1. Capcom
Capcom is thriving as a video game developer and publisher, thanks to strong releases that have bolstered its main brands and resulted in impressive sales and earnings growth. Mega Man, Devil May Cry, & Street Fighter are one of the company’s properties, in addition to the Resident Evil and Monster Hunter franchises. Capcom also has a sizable back catalog of lesser-known but adored classic titles.
There are numerous reasons to admire this long-running company, which has dominated the video game industry for decades and produced some of the most unforgettable gaming experiences ever. Since its premiere in May 2021, Capcom’s Resident Evil Village has sold over 5 million units. Capcom pays a dividend and intends to distribute around 30% of its annual income to shareholders through dividend payments. In the video game sector, earnings can be volatile, but Capcom’s management clearly prioritizes returning income to shareholders.
2. Take-Two Interactive
The value of Take-Two Interactive has risen dramatically as a result of the success of its primary properties. Grand Theft Auto is the company’s biggest and most important property, as well as one of the most profitable gaming franchises ever. Take-Red Two’s Dead Redemption series is a hit, and its NBA 2K basketball series is the best-selling in the genre. In addition, the corporation owns a number of minor series and other development activities that aid in its expansion.
Game development is notoriously difficult and resource-intensive, yet Take-main Two’s brands’ development studios have consistently provided great results. Take-Two is an expert in delighting players and generating high levels of in-game engagement and spending. Because of its excellent financial position, the company is able to seek new development prospects in areas like mobile gaming and esports.
3. Microsoft
Microsoft is best known for its productivity tools and cloud computing, but the computer behemoth is also a major player in the video gaming business. Microsoft owns a number of game studios and is the creator of the Xbox game platform. Its Windows operating system is the de facto industry standard for PC gaming. Microsoft controls Minecraft developer Mojang and Elder Scrolls producer Bethesda, as well as video game behemoth Activision Blizzard, which it agreed to buy in a stunning $70 billion deal.
Call of Duty, World of Warcraft, and Candy Crush are just a few of the legendary franchises owned by Activision Blizzard. Activision is a pioneer in the esports industry, with a strong presence in mobile games. The Activision deal, maybe most importantly for Microsoft, gives it a considerably stronger hand in the quest to establish and dominate the metaverse.
4. Electronic Arts
Electronic Arts, which was founded in 1982, continues to play a pivotal role in the evolution of the interactive entertainment business. It is the second-largest video game company in terms of revenue, and it dominates the sports gaming subgenre.
The pioneering game publisher holds a collection of high-profile original properties, including The Sims, Apex Legends, and Battlefield, as well as popular licensed titles like Madden NFL and FIFA. The acquisition of Glu Mobile by Electronic Arts in June 2021 indicates that the firm is now aggressively moving into mobile games.
5. Nintendo
Nintendo is a video game console industry pioneer. In the 1980s, Nintendo released the Nintendo Entertainment System, which was followed by a series of popular systems. Nintendo’s most recent platform, the Switch, has sold over 100 million copies globally since its launch.
Nintendo is known for producing a large number of the most popular games for its own platforms. Mario, Zelda, Super Smash Bros., Animal Crossing, and Pokemon are just a few of the iconic properties that have inspired an infinite series of games and hundreds of millions of unit sales over the years. Despite all of the changes in the gaming business over the last few decades, Nintendo has remained one of the greatest video game stocks to invest in.
The Stock with the Fastest Growth in the Video Game Industry
These are the best video game stocks, according to a growth model that weighs companies’ most recent quarterly year-over-year percentage revenue growth and earnings-per-share (EPS) growth equally. Both sales and earnings are critical to a company’s success. As a result, judging a company solely on its growth indicator exposes it to accounting irregularities (such as changes in tax law or restructuring charges) that may render one or both figures unrepresentative of the company as a whole. Companies with a quarterly EPS or revenue growth of more than 2,500 % were classified as outliers.
• Inspired Entertainment Inc.: Inspired Entertainment is a company that specializes in game technologies. It supplies lottery, betting, and gaming companies with content, platforms, and other services. Sportech Lotteries Inc., a subsidiary of Sportech PLC, was bought by the firm on January 4th. Sportech Lotteries’ main asset is its lottery systems contract with the Dominican Republic’s Lotera Electrónica Internacional Dominicana S.A. (LEIDSA). The deal between Sportech and LEIDSA was supposed to end in 2025. Concurrent with the transaction, the lottery systems contract was renewed through 2035. The $12.5 million acquisition broadens Inspired’s geographical and lottery-related reach.
• Enthusiast Gaming Holdings Inc.: Enthusiast Gaming is a video game and eSports company based in Canada. Its primary goal is to create a global social networking platform for video game and eSports lovers to connect. An EPS growth rate could not be calculated for the above table since the company recorded negative EPS in the most recent quarter.
• Sea Ltd.: Sea is an Internet and mobile platform company established in Singapore. It offers online gambling, operates third-party online markets, and offers a variety of financial services, including e-wallet and payment services. The company’s net losses widened in the third quarter of 2021, which concluded on September 30, despite revenue more than doubling year over year. Revenue increased as a result of strong performances across all segments, although cost of revenue and sales and marketing expenses increased significantly. An EPS growth rate could not be calculated for the above table since the company recorded negative EPS in the most recent quarter.
People enjoy a variety of forms of entertainment, and video games provide a diverse set of experiences that can be particularly captivating. The global popularity of video games is expected to grow in the future decades, giving top game publishers numerous chances to engage new players and increase sales in both developed and emerging regions.
While not all video game firms will continue to produce popular franchises, those who are at the forefront of video game development and growth are likely to benefit the most from the industry’s continued expansion.