The year 2020 was a blockbuster year for the gaming industry. With millions locked indoors, video games, mobile games and online game streaming were a major source of entertainment.
The NPD Group
had reported last July (when pandemic was at its peak) that three of every four people or 244 million Americas were playing video games, having registered an increase of 32 million people since 2018. This, in turn, helped global video game revenues jump 23% year over-year, grossing $135.8 billion in 2020, per SafeBettingSites.com data reported on
APN News
.
Now that the pandemic woes are subsiding and the global economies are steadily reopening, will the gaming industry continue to grow? Well, the pandemic had fueled spending on the video gaming industry and attracted investments worth of billions. So, gaming emerged as a megatrend and is here to stay.
Mobile Gaming Lucrative for All-Age Bracket
The mobile gaming segment emerged as a winner in 2020 as people globally put mobile games a top their list of indoor entertainment amid the lockdown. Game developers adopted technologies to connect gamers worldwide and enhance their gaming experience. Additionally, gaming became lucrative among all age groups and professional esports now have an audience of nearly 500 million people worldwide. Casual gamers cover all age groups and moved out of the stereotypic nerd image that was depicted in movies and on TV shows in the 90s. In fact, time spent on gaming witnessed maximum growth from people aged above 45 years during the pandemic.
Smartphones continue to grow as the biggest gaming platform globally. Companies like Zynga, which pioneers in mobile video game saw a 52% year-over-year increase in revenues last year. This, in turn, grabbed attention of other video game makers to invest more in mobile games. In fact, gaming giant Electronic Arts Inc.
EA
announced a $2.1-billion deal to buy the smartphone-focused game studio Glu Mobile earlier this February. This merger will help EA build on popular video game franchises with mobile offerings alongside Glu’s line-up of games that include
Design Home
and
Covet Fashion
.
According to
Safe Betting Sites
’ report, mobile games are expected to generate $109.6 billion in revenues this year, reflecting a 44% increase in two years. With the positive trend continuing, the mobile games industry is forecast to reach a value of more than $160 billion by 2025.
VR Tech: A Revolution in Gaming Landscape
Virtual reality (VR) technology in gaming helps players feel their physical presence in the game settings. Gamers get a 360-degree video experience, transporting them to a real-time game world. Gaming companies are incorporating virtual reality technology, which is constantly attracting more players globally. In fact, mobile VR gaming is the most affordable experience for gamers who cannot or do not want to spend substantial amount of money on VR gaming. In February,
Facebook, Inc.
FB
announced that more than 60 games are available in the Oculus Quest and Quest 2, which has logged more than $1 million worth of revenues since the beginning of 2020. The social media giant had purchased VR headset maker Oculus for $2 billion back in 2014.
The market already has VR headsets for mobile phones like Samsung Gear and Google Daydream. These devices are priced lower than the gaming consoles and PC headsets and are often bundled with premium phones. According to
ResearchAndMarkets.com
report, VR in the gaming market is expected to see a CAGR of 32.75% between 2021 and 2026.
5 Stocks to Watch out for
Momentum in the gaming industry will continue this year as well. Game developers across the globe are continuously striving to enhance gamers’ experience, launching products and rewriting codes for diverse console and other gaming platforms. Advancement in cloud technology transformed the idea of cloud gaming into reality and the 5G rollout will also propel the market growth. Here are five gaming stocks that investors can look out for maximum returns.
Sony Corporation
SNE
designs, develops, produces and sells electronic equipment, instruments and devices for consumers, professionals and the industrial markets worldwide. The company offers gaming consoles, PlayStation and also develops games for mobile and cloud gaming. Its expected earnings growth rate for the current year is 92.5% compared with the Zacks
Audio Video Production
industry’s projected earnings growth of 13.2%.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 28.5% upward over the past 60 days. Sony currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Take-Two Interactive Software, Inc.
TTWO
develops, publishes and markets interactive entertainment solutions and offers games under the Rockstar Games and 2K labels. The company belongs to the Zacks
Toys – Games – Hobbies
industry and has an expected earnings growth rate of 11.4% for the current year. The Zacks Consensus Estimate for the company’s current-year earnings has moved 10.2% north over the past 60 days. Take-Two Interactive holds a Zacks Rank #2 (Buy) at present.
Facebook
develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets and in-home devices. The company provides an array of online games and also offers live video game streaming. Facebook has a Zacks Rank of 2, presently.
Facebook hails from the Zacks
Internet – Services
industry and has an expected earnings growth rate of 11.8% for the current year. The Zacks Consensus Estimate for the company’s 2021 earnings has been revised 9.3% upward over the past 60 days.
Nintendo Co., Ltd.
NTDOY
offers video game platforms, playing cards, Karuta, other products, handheld and home console hardware systems plus related software. The company’s expected earnings growth rate for the current year is 62.3% compared with the Zacks Toys – Games – Hobbies industry’s projected earnings growth of 13.1%. The Zacks Consensus Estimate for the company’s current-year earnings has been raised 8.6% over the past 60 days. Nintendo carries a Zacks Rank of 3, currently.
Activision Blizzard, Inc.
ATVI
develops and distributes content and services on video game consoles, personal computers (PC) and mobile devices. The company that belongs to the Zacks Toys – Games – Hobbies industry has an expected earnings growth rate of 4.9% for the current year. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 3.4% upward over the past 60 days. Activision Blizzard currently carries a Zacks Rank #3 (Hold).
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year’s 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report