While many industries (especially travel, leisure, and hospitality) have suffered significantly both during and in the wake of Covid-19, it’s fair to say that some markets have experienced a boom.
Taking gaming, for example, has seen a considerable wave of dealmaking among companies across both private and public markets.
According to investment management firm Investec, 2021 saw approximately 30% more deals and an average 45% increase in transaction value since the pandemic, with this driven by increased demand and the relentless rise of mobile gaming.
But how exactly is the video game industry booming, and what are the best stocks to consider investing in through 2022 and beyond?
How is the Video Gaming Industry Booming?
As the furlough scheme kicked in and others were unfortunate enough to lose their jobs, the market saw a huge increase in demand for games, consoles, and associated kits.
To this end, the video game market increased by 26% between 2019 and 2021, with growth in the developed world and nations like the US and UK as key drivers of this trend.
Of course, some games were boosted by perfectly timed launches, with Nintendo’s ‘Animal Crossing: New Horizons’ released in March 2020 to coincide with the initiation of lockdowns in the UK and US.
Partially as a result of this, the title shifted 13.4 million units during its first six weeks alone, while it has since gone on to become one of the best-selling Nintendo Switch games of all time.
Arguably, the coronavirus has also turned millions of us into avid gamers, while also encouraging 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 the most value to investors. We’ve outlined a few of the best below, based on current trends and the underlying value boasted by each company.
- #1. Electronic Arts (EA): EA is an American gaming brand that covers multiple genres, although it’s best known for its sports and arcade titles. It’s the brand’s sports-themed hits that continue to drive its growth and transcend the video gaming market, from the FIFA Soccer franchise to Madden NFL and NBA Live Series. EA also boasts several proprietary titles that supplement its core value, while the business had a total market cap value of $34/75 billion as of October 2022.
- #2. Zynga (ZNGA): Zynga is a popular video game company that pioneered the social media gaming marketplace, developing interactive titles such as FarmVille (which debuted in 2009) on Facebook. This title reached a staggering 10 million daily active users within just two months, while Zynga had evolved to boast 95 million active users and 30 million daily users by 2019. Zynga’s market cap value is $9.30 billion, while its shares are more affordable than those associated with EA.
- #3. Take-Two Interactive Software (TTWO): Take Two Interactive Software is a New York-based brand that manufactures and distributes video games (along with additional computer accessories). At the heart of this stock’s appeal are its numerous subsidiaries, including 2K Games, K Sports and the best-selling Grand Theft V (which incredibly sold $800 million on its launch day). The firm’s market cap is $20.52 billion, making it something of a mid-range option for interested investors.
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