While many industries (especially travel, leisure and hospitality) have been hit hard both during and after Covid-19, it’s fair to say that some markets have experienced a boom.
Taking gaming for example, we are seeing a significant wave of deals between companies in both the private and public markets.
According to investment management company Investecin 2021, there were approximately 30% more transactions and an average 45% increase in transaction value since the pandemic, driven by increased demand and the relentless growth of mobile gaming.
But how exactly is the video game industry shaping up, and what are the best stocks to invest in through 2022 and beyond?
How is the video game industry evolving?
As the furlough scheme kicked in and others sadly lost their jobs, the market saw a huge increase in demand for games, consoles and bundles.
To this end, the video game market is set to grow by 26% between 2019 and 2021, with growth in the developed world and countries such as the US and the UK being a key driver of this trend.
Of course, some games have been boosted by well-timed launches, including Nintendo’s Animal Crossing: New Horizons, released in March 2020 to coincide with the start of lockdowns in the UK and US.
Partly as a result of this name moved 13.4 million units in its first six weeks alone, while it has since become one of the best-selling Nintendo Switch games of all time.
Perhaps the coronavirus has also turned millions of us into avid gamers, and encouraged existing players to buy more consoles and even more titles.
The best gaming stocks for investors
The question that remains, of course, is which gaming stocks offer investors the most value. We’ve outlined a few of the best below, based on current trends and the core values each company boasts.
- #1. Electronic Arts (EA): EA is an American gaming brand that spans multiple genres, but is best known for its sports and arcade games. It’s the brand’s sports-themed hits that continue to drive its growth beyond the video game market, from the FIFA Soccer franchise to Madden NFL and the NBA Live Series. EA also boasts several proprietary titles that complement its core value, while the total market capitalization of the business as of October 2022 was $34/75 billion.
- #2. Zynga (ZNGA): Zynga is a popular video game company that pioneered the social media gaming market, developing interactive games such as FarmVille (which debuted in 2009) on Facebook. The title reached a staggering 10 million daily active users in just two months, while Zynga grew to 95 million active users and 30 million daily users by 2019. Zynga’s market cap is $9.30 billion, and its shares are more affordable than those of EA.
- #3. Take-Two Interactive Software (TTWO): Take Two Interactive Software is a New York-based brand that produces and distributes video games (along with optional computer accessories). At the heart of the appeal of these promotions are their many subsidiaries, including 2K Games, K Sports and the bestseller Grand Theft V (which sold an incredible $800 million on launch day). The market capitalization of the firm $20.52 billion, making it a mid-range option for interested investors.
