Happy Sunday Financial Gurus.
Today HNFC wants to introduce you to the gaming industry and state best performing stocks of
the gaming sector for the last 6 months. See you inside!
The gaming industry has proved to be very competitive because consumers are ever on the look to satisfy their desire for newer experiences. This, and the fact that it has been a booming industry since its inception. This combined with the introduction of mobile gaming has furthered strengthened the digital entertainment sector as a potential sector for long term investment.
The industry is currently held by top gaming companies that include Nintendo, the valve corporation, rockstar games, electronic arts, Ubisoft and Sony computer entertainment among others.
A closer look at the gains to be expected in 2017 reveals consumer accessibility as one of the strengths to be exploited. For instance, Nintendo a long-term maker of hand held video games has opted to exploit the mobile option.
Statistics gathered from Nintendo video consumers could be summarised as follows.
Nintendo indicated the average age of gamers to be at 35, the game purchaser’s average age was classified to be at 38 and households that own devices for playing video games was classified to be averagely at 65%. The devices that are frequently used for gaming were also classified in terms of percentage of popularity as follows: PC 56%, dedicated game console was put at 53%, smartphone is put at 36% by usage, wireless device at 31% and dedicated handheld device at 17%.
With the global games sector attracting circa and 2 billion customers, and the global revenue is expected to grow from the $101.1b (USD) in 2016 to an estimated $128.5 billion by the end of 2020, the opportunities and reasons to invest in the gaming industry has never been more appealing to investors. With a forecasted increase of 27.1% over the next 3 years and a year on year increase
of 36% last year in relation to share price for gaming industry stocks, could easily see the growth exceed the forecast in the coming years with new mediums and ways to access to gaming platforms evolving at an effervescent pace with microtransactions, AR & VR (Augmented & Virtual Reality) adding further revenue streams. Furthermore, with some companies outgrowing the 36% industry growth last year, below is a sample of best performing stocks and their 6-month performance.
(Share Price Growth of selected gaming industry stocks over the past 6 months that operate in a variety of sub sectors to show overall market growth)
Take Two Interactive - (Ticker TTWO) - 61.83% Zynga - (Ticker ZNGA) - 40.55%
Activision Blizzard - (Ticker ATVI) - 54.29% GLU Mobile Inc - (Ticker GLUU)- 23.39%
Electronic Arts -(Ticker EA) - 43.79% Netease Inc - (Ticker NTES) - 17.71%
This is outstanding results within such short time frame. Investing in stocks most likely will provide nice returns which you unlikely to get elsewhere. Also, investing in stocks will make your money work harder for you. If you don't know which stocks to invest in check free portfolio by HNFC
In addition to the tangible products and traditional gaming experiences, the world of eSports is becoming a pivotal part in the spearheading of the gaming industries revolution. E-sports are a competitive environment in which video games are played for cash prizes. These include a multitude of genres and have even gone as far as having professional football associations sponsoring E-sports players to wear their apparel in tournaments to advertise their branch, particularly in the Asian markets where E-sports are more prominent and are heavily watched.
To summarise, more people (36 million to be precise) watched the League of Legends tournament (Abbreviated to LoL) than the NBA finals.
League of Legends is owned by the holding company Tencent Holdings ( Ticker TCEHY)
Add merchandise sales for competitive gaming teams and this only adds to the revenue streams that are able to be generated under the gaming industry banner. Viewing figures In 2016, indicated sales from one of the most popular games, DOTA 2 reached a tune of $37,251,051.07 from 118 tournaments played. This industry is on the cusp of truly breaking out into a Billion USD industry, and with interest in eSports, that ultimately means there is money to be made.
These statistics indicate investing in the gaming industry would not be for granted while taking into consideration that gamers are continuously looking for something new in the market that can excite them. The key issue to consider while investing in gaming stocks remains taking into consideration what potential clients would love. Since gaming is an urge created by a desire to satisfy
a certain inner feeling.
My final thought on the gaming industry is the teens of today will soon have their own disposable income to be able to further boost the gaming industry, and with YouTube stars such as PewDiePie attracting mainstream attention, having own dedicated social media platforms such as Twitch which continues to grow in its active user base, the gaming industry is a lucrative investment and is a prominent sector of the entertainment industry. Games franchises further bolster this such as the commercial success of Assassins Creed getting their own movies (Movie rights only add gross value to the industry), the gaming industry is just sifting through the sand to find the right stock and strike oil.
3 best performing stocks of the Gaming Industry over last 6 months
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Written by Graham Laxton │Young financial analyst and Co-founder of HNFC
Edited by Vee Venski