Despite the commercial failure of some mainstream titles, the gaming industry stocks have racked up substantial gains this year.
So much so that some major video game companies have double-to-triple digit gains this year. This is despite the industry continuing to transition from physical to digital media and an unprecedented unpredictability in sales.
Now might just be the time to invest more than just time in our favorite hobby.
Global revenue from video games is expected to hit $93.2 billion by 2019, according to a report released by reputable consulting firm PricewaterhouseCooper (PwC). PWC also estimates that digital games global distribution will reach $12.9 billion during the same timeframe. That figure represents an exceptional 19.6% of overall revenue.
Here are three gaming stocks that have experienced the biggest gains so far this year.
Activision Blizzard Inc.
With franchises like Call of Duty and World of Warcraft in your arsenal, this was always going to make easy reading to Activision Blizzard Inc. – and that’s before you taking into account the acquisition of app games company Kings Digital last year.
During its latest quarter, Activision Blizzard reported $1 billion from in-app purchases during its latest quarter and has said that it is revamping content in its existing games to promote spending.
Shares are up by 76.6% this year. Incredible.
Take Two Interactive Software, Inc.
According to Goldman Sachs, Take-Two is in a “sweet spot” for game releases. The runaway success of Grand Theft Auto Online and a steady stream of updates means that the cash should keep flowing in for the foreseeable future. The company has confirmed a healthy cash position of $1.3 billion.
That’s a whole lotta Shark Cards.
Take-Two Interactive stock is already up by 102.4% this year. With Red Dead Redemption on the horizon, there is the potential for shares to continue to rise in the near future.
Electronic Arts Inc.
Electronic Arts digital sales rose 23% during the first quarter of 2018 as compared with the same period last year. Digital sales now account for 61% of EA’s overall revenue, showing the shift from physical media is having a much more significant impact than previously.
The lower cost of digital media is helping with gross margins due to the lower fixed costs for each sale, and the continued success of Origin Access looks promising.
Electronic Arts Inc. shares have been bid up by investors to the tune of 50% since the start of this year. With the imminent releases of Fifa 18 and Star Wars Battlefront II, share prices could continue to increase before 2017 is through.
Research firm Goldman Sachs stated that video game publishers are “in the middle of a renaissance.” Looking at these statistics, I dare say that they’re probably right.