Gaming has been picking up steam in recent years. If we look at its rivals in the entertainment industry, they seem to be hugely outplayed. Revenues of the television sector have fallen down by 8% last year (currently $102 billion), while the gaming sector is up at a current annual rate of 10.7%.
The film industry is experiencing the overwhelming dominance of video games as well. Games used to be based on successful movies, but the situation has changed: movies (and books as well) emerge from popular games, for example Angry Birds and Assassin’s Creed to name a few.
While other entertainment categories are witnessing decline, the increased popularity of video games is creating massive opportunities for stock investors.
According to the Newzoo's 2018 report on global games market, currently there are over 2.3 billion active gamers globally. Approximately half of them – 1.1 billion – spend money on games.
Why are millennials so eager to spend more and more on gaming? Because they cannot resist ever-innovative game producers. In addition to fascinating games, the industry has found new ways to get people engaged, such as eSports, and streaming sites like Twitch, where video game fans can watch others play online.
The researcher at Newzoo predict that in 2018 the gaming industry will reach around $138 billion, which is a 13.3% increase against the previous year. For the first time mobile gaming will be more than half of the total gaming market revenue, about $70.3 billion (+25.5% against 2017).
The biggest contribution to the industry’s revenue will come from China – approximately $37.9 billion in 2018. The second and third places go to the USA ($30.4 billion) and Japan ($19.2 billion) respectively. In terms of regions, Asia-Pacific is the major contributor, with revenues of $71.4 billion in 2018.
Gaming stocks: who are the key industry players?
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This is the largest game company in Europe and the Americas by revenue and market capitalisation as of September 2017.
Overwatch, its recent multiplayer first-person shooter already boasts around 40 million players globally. Launched in 2016, the video game was among the most anticipated games that year and generated more media buzz than Pokémon GO.
Activision Blizzard’s three game production units (Activision, Blizzard Entertainment and King Digital Entertainment) have sold more than 500 million copies of their titles, including Call of Duty, Destiny, Skylanders, World of Warcraft, Hearthstone, Diablo, Heroes of the Storm, StarCraft, Overwatch, Candy Crush, Farm Heroes, Pet Rescue and Bubble Witch.
Call of Duty was the second ranked eSports game by number of players – over 28 million as of August 2017 (after League of Legends), and World of Warcraft became the fourth best selling PC game of all time globally as of January 2018.
Electronic Arts, another American gaming giant, delivers games under several labels, including FIFA , NHL, Madden NFL, etc., and well-established franchises as Battlefield, The Sims, Medal of Honor, and more, and new labels – Crysis, Mass Effect, Dragon Age, Dead Space, Army of Two, etc.
In 2016, Battlefield 1 was titled the best-selling Xbox One video game of the year with around 4.32 million units sold. Another EA’s product – The Sims 3 – has been recognised the fifth best-selling PC game of all time worldwide with over 11 million units sold.
As of September 2017, Take-Two Interactive is the third largest US publicly traded game producer after Activision Blizzard and Electronic Arts. In the last 12 months, the company’s stock is up more than 60%.
Take-Two is being successful due to its massively popular Grand Theft Auto V, which at the time of writing was the third most sold game of all time. NBA 2K, Civilization and BioShock are among their other remarkable titles. Additionally, the company operates Rockstar Games, Private Division and 2K Gamesvideo game publishers.