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​​Best gaming stocks: Which pro players are trending?

By Prachi Sinha

Edited by Vanessa Kintu


Updated

gaming game play tv fun gamer gamepad guy controller video console play player holding hobby playful browsing concept - stock image
​​Best gaming stocks: Which pro players are trending? – Photo: Shutterstock

Video games were launched in the 1970s primarily as entertainment avenues for children and adults alike. With technology becoming more sophisticated, investing in gaming stocks has gained popularity in the past few decades. The gaming industry includes dozens of job disciplines and employs millions of people worldwide.

According to Statista, the global gaming companies on the stock market were worth $178bn (£131bn) in 2021. By 2025, the market share of the gaming industry stocks is anticipated to grow to $268.8bn globally. An exciting business sector, the gaming industry weighs heavily on providing entertainment through innovative technological advancements.

Global market value of gaming industry

From PC to gaming consoles, the industry has embraced virtual reality and augmented reality to offer a truly skin-in-the-game experience. The most recent example of this has been the popular augmented reality mobile game Pokémon Go, developed by Niantic in partnership with Nintendo and The Pokémon Company. Launched in 2016, the game drew more than 250 million people per month at its peak and became a global cultural phenomenon.

In this article, we dig deep into the gaming industry by way of a list of the top 5 gaming stocks and analyse the gaming companies to invest in.

Implications of Covid-19 on the gaming industry

In early 2020, when Covid-19 made its debut and induced global lockdowns, user engagement in video games surged. In 2020, there were nearly 2.69 billion video game players worldwide. According to research firm Newzoo, this figure is set to rise to 3.07 billion in 2023 based on a 5.6% year-on-year (YoY) growth forecast.

Active video game players globally (2015 to 2023)

Anthony Benites, a video game enthusiast and finance major student at The Bentley University, said

“The video game industry is arguably one of the greatest beneficiaries of the pandemic.”

During the early waves of Covid-19, social media trends, such as #PlayApartTogether, were initiated by gaming giants like Activision Blizzard to encourage people to entertain themselves during lockdowns while also practising safe social distancing.

The World Health Organisation (WHO), which had previously designated video game addiction as an official mental health disorder, changed its stance and supported the initiative as well.

Tracking 5 gaming companies

According to the data compiled by CompaniesMarketCap, as of 21 February 2022, the following are the best online gaming stocks based on the market capitalisation metrics. In this article, we zoom in on some of the top gaming stocks to watch.

Top 5 Gaming companies by market capitalisation

Microsoft

An American multinational technology corporation, Microsoft (MSFT) is one of the Big Five American information technology companies, along with Alphabet (previously known as Google), Apple, Amazon and Meta. In April 2019, the company became the third US public company to reach trillion-dollar market capitalisation.

With the Xbox video game console being one of its flagship hardware products, Microsoft has recently taken another step to strengthen its position in the gaming industry. In its 18 January 2022 press release, Microsoft announced its acquisition of Activision Blizzard, a market leader in interactive entertainment and creator of renowned games such as Candy Crush, Call of Duty and World of Warcraft.

The all-cash transaction valued at $68.7bn, inclusive of Activision Blizzard’s net cash, is set to be the biggest-ever buyout in tech sector history. Offering $95 per share, Microsoft combined with Activision Blizzard will become the third largest gaming company by revenue, globally.

Microsoft is not new to acquisitions in the gaming industry. In September 2020, it took over ZeniMax Media, an American video game company that owns Bethesda Softworks, for $7.5bn. ZeniMax had produced popular video game franchises such as Doom and Fallout, and the acquisition helped Microsoft further its business position as a digital video game subscriber.

At the time of writing on 21 February 2022, the MSFT stock had last closed at $287.93. The stock has dropped by nearly 14% since the start of this year. It had closed at $334.75 as of 3 January 2022. 

MSFT 5-year stock price chart

The algorithm forecasting of Wallet Investor suggests that the MSFT stock price could potentially increase to $657.116 by January 2027, five years from now.

According to data compiled by Tip Ranks, at the time of writing 29 analysts gave the stock a ‘buy’ rating. The average price target was set at $375.22 by the Wall Street analysts, 30.31% on the upside of the last close price of $287.93.

On 9 February 2022, Barclays analyst Raimo Lenschow retained his MSFT price target at $363 and ‘buy’ rating. KGI Securities bumped its price target on Microsoft to $410 from $400 and maintained an ‘outperform’ rating, as of 8 February 2022.

Tencent

Founded in 1998 with headquarters in China, Tencent (TCEHY) is a leading technology and internet company. A multinational technology and entertainment company, its stock is one of the most popular online gaming stocks.

As of November 2017, it became the first-ever Asian company to earn over $500bn in market value.

On 10 November 2021, the company published its Q3 2021 financial results and reported a 13% YoY increase in its revenues. Specifically, in its reportable segment of gaming, the revenues from domestic games increased by 5% compared with Q3 2020. From its international games such as Valorant and Clash of Clans, the top-line increased by 20% YoY to RMB11.3bn ($1.78bn).

At the time of writing on 21 February 2022, the Tencent stock had last closed at $59.03. From its close price of $57.10 as of 4 January 2022, the stock has rallied by 3.38% in the year to date.

RDDT

52.31 Price
-8.240% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.16

AMD

181.32 Price
+1.390% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.13

NVDA

907.05 Price
+0.730% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.53

COIN

265.99 Price
+2.500% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.35

TCEHY 5-year stock price chart

According to Wallet Investor, Tencent stock price could potentially increase to $101.229 by January 2027.

Data compiled by Market Beat indicated four analysts gave the stock a ‘buy’ rating, three analysts recommended to ‘hold’ and two analysts suggested a ‘sell’. The average price target was set at $186.05, varying from a range of $60.18 to $510.

On 2 November 2021, Barclays set its price target at $84 with an ‘outperform’ rating. Mizuho Securities lowered its price target to $510 from $530 and maintained a ‘neutral’ stance as of 11 October 2021. On 11 February, Investec downgraded its rating to ‘hold’ from an earlier ‘buy’ position.

Sony

A Japanese company, Sony (SONY) is one of the biggest comprehensive media companies with a huge footprint in the video game market. Its multinational video game and the digital entertainment business are carried on by Sony Interactive Entertainment.

A tough competitor to Microsoft and other gaming companies, Sony recently announced a potential acquisition of Bungie, an American video game developer responsible for the popular video games, Halo and Destiny. In a move to reach a larger portfolio of gamers, Sony will leverage Bungie’s technology expertise from this acquisition, which will cost the former $3.6bn.

At the time of writing, Sony stock had last closed at $104.53. From its close price of $148 as of 4 January 2022, the stock has fallen by 29.37% in the year to date.

SONY 5-year stock price chart

According to algorithm forecaster Wallet Investor, Sony stock price could potentially increase to $244.314 five years from now in January 2027.

On 27 September 2021, Cowen initiated coverage on Sony with a price target of $144 and an ‘outperform’ rating. Morgan Stanley bumped up its rating to ‘overweight’ from ‘equal weight’ on 28 July 2021.

Sea (Garena)

An e-commerce and video game development company, Garena is a Singaporean online game developer owned by the Sea Group (SE). Garena takes care of all gaming pursuits of Sea and champions video games for a global community of gamers.

On 16 November 2021, the company released its Q3 financial results and reported total gross profits of $1bn, at a 147.5% YoY increase. Its Quarterly Active Users and Quarterly Paying Users grew by 27.4% and 42.7%, on a YoY basis. According to App Annie, its self-developed game Free Fire was the highest-grossing mobile game in Q3 2021, in all of Southeast Asia, Latin America and India.

On 21 February 2022, the Sea (Garena) stock had last closed at $127.69. From its close price of $223.31 as of 3 January 2022, the stock had fallen by 42.81% in the year to date.

SE 5-year stock price chart

According to Wallet Investor, the Sea (Garena) stock price could potentially increase to $543.869 by January 2027.

Data compiled by Tip Ranks showed eight analysts gave the stock a ‘buy’ rating. The average price target was set at $269.50, by eight Wall Street analysts, 111.05% on the upside of the last close price of $127.69.

Meanwhile, the analysts consensus rating on Market Beat was a ‘buy’, with 13 out of 14 analysts rating it a ‘buy’ and only one suggesting ‘hold’. 

NetEase

With more than 100 games in operation, NetEase (NTES) is a Chinese internet technology company. It established its online games division in 2001 and two decades later, is one of the top mobile gaming stocks in the world.

In its 24 January 2022 press release, the company announced the establishment of Nagoshi Studio in Tokyo. Initiated on the premise of developing high-quality console titles, Nagoshi Studios will only further NetEase’s footprint in the global video game industry.

As of 21 February, the NetEase stock had last closed at $98.52. From its close price of $100.64 on 3 January 2022, the stock has fallen by 2.10% in the year to date.

NTES 5-year stock price chart

The algorithm-based forecasting service Wallet Investor was bearish on NTES stock at the time of writing. It expected the stock to fall to $0.000001 by January 2025.

On 18 November 2021, Nomura bumped NetEase’s price target to $135 from $126 and maintained its ‘buy’ rating. However, on 28 July 2021, Citigroup lowered its price target to $132 from $148 while maintaining its ‘buy’ recommendation.

When considering whether to invest in gaming stocks, you should always do your own research, considering the outlook and relevant market conditions. A number of factors dictate whether stock prices rise or fall, including the company’s fundamentals and broader macro-economic factors. There are no guarantees. Markets are volatile. You should conduct your own analysis, taking in such things as the environment in which it trades and your risk tolerance. And never invest money that you cannot afford to lose

FAQs

Are video game stocks a good investment?

With the global lockdowns induced by Covid-19, gaming stock prices rallied as more and more people turned to online games for entertainment. However, with the economies on the recovery, the stocks have been on correction in 2022.

What video game companies are publicly traded?

According to market capitalisation on 21 February 2022, the five largest publicly traded game companies were Microsoft, Tencent, Sony, Sea (Garena) and NetEase, according to CompaniesMarketCap.

Markets in this article

MSFT
Microsoft Corp (Extended Hours)
421.22 USD
-0.45 -0.110%
NTES
Netease
103.66 USD
-0.1 -0.100%
SE
Sea Limited
53.94 USD
0.34 +0.640%
SNE
Sony
86.34 USD
-0.28 -0.320%
0700
Tencent
306.0 USD
3 +1.000%

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