If you are looking to invest in a rapidly-growing industry that perfectly combines technology and entertainment, look no further than video games. Strong demand during the pandemic helped video game companies achieve new levels of success, and all signs point towards continued growth for these businesses in 2021. According to Insider Intelligence, there will be approximately 177.7 million monthly gamers in the U.S. this year, which accounts for more than half of the country’s population.
Whether people are playing on a television, computer, or mobile device, it’s clear that there are plenty of outlets for game developers to attract new users and increase engagement for existing players. Also, when you consider the way that video games provide social interaction virtually, it’s easier to grasp the full potential of this industry. Soon, younger generations might even view video games as one of the primary ways to communicate with one another and spend time with friends.
It’s quite clear that investing in companies at the forefront of video gaming technology and development could be a very rewarding strategy, which is why we’ve put together a list of 3 video game stocks to play now. Take-Two Interactive Software (NASDAQ:TTWO)
When it comes to evaluating video game companies for investment potential, seeking out developers with a strong track record of developing successful franchises is important. That’s the case with Take-Two Interactive Software, a developer, publisher, and marketer of entertainment for consumers all over the world. The company’s portfolio of software content is truly top-notch, with extremely successful franchises including Grand Theft Auto, Red Dead Redemption, Borderlands, Bioshock, and NBA 2K.
It’s worth noting that Take-Two
should benefit in the coming years as more people pick up the new Xbox Series X and Playstation 5 video game consoles. Investors should also applaud the company’s decision to introduce “GTA Online”, which provided a further way to monetize the company’s flagship game “Grand Theft Auto V”. Take-Two recently reported strong earnings results for FY 2021 including GAAP net revenue growth of 9% to $3.3 billion and GAAP net income growth of 46% to $588.9 million. The bottom line here is that this is one of the premier video game stocks to own for the long haul thanks to the company’s ability to develop memorable games that keep enthusiasts coming back time and time again. Roblox Corp (NYSE:RBLX)
I mentioned that Roblox
was a stock that looked like it could be a future winner a few weeks ago thanks to the way the company is disrupting the video game industry. While the stock has since broken out of its post-IPO base, investors should still look to add shares of this emerging growth stock on dips given its strong long-term prospects. The company’s gaming app offers a plethora of 3D-generated worlds where kids can play together and socialize. What’s really interesting about this company’s take on video games is that all of the games on its platform are created by Roblox users.
There’s also the fact that kids buy and spend a virtual currency called Robux to improve their gaming experience. You might have already seen gift cards for Roblox in major retail stores, and the amount of money that kids are spending on in-game purchases could deliver massive top-line growth for this company in the coming months. With eye-catching Q1 average daily active user growth of 79% year-over-year and the way this company combines video games, cloud platform providers, and social networks into one intriguing business model, it’s one of the best video game stocks to consider buying now. Activision Blizzard (NASDAQ:ATVI)
Finally, we have Activision Blizzard, a video game company with some of the most profitable gaming franchises in the world. As the world’s largest independent developer of video games and related content, the company had its best financial year ever in 2020 as gamers stayed home during the pandemic. With popular franchises that include Call of Duty, World of Warcraft, Starcraft, and Diablo, the sky is the limit for Activision as it brings these successful games to powerful new game consoles.
The company also has some of the most talented game developers in the industry, which is another quality that should be attractive to investors. Activision Blizzard reported solid Q1 earnings including total revenue growth of 35% year-over-year to $1.98 billion and GAAP EPS of $0.79, representing growth of 21.5% year-over-year. The company also offers a $0.47 per share annual dividend, which is rare for video game stocks. Finally, investors should be attracted to this company’s exposure to e-sports with its Major League Gaming business, which could be a big growth driver for both the gaming industry and Activision Blizzard
over the long term.
Before you consider Activision Blizzard, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Activision Blizzard wasn't on the list.
While Activision Blizzard currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The 5 Stocks Here
Companies Mentioned in This Article
Compare These Stocks
Add These Stocks to My Watchlist