Top 10 Video Game Stocks In 2023

Many might be surprised to learn how large the video game industry is. What was once called a "passing fad" by an executive of toymaker Milton Bradley Co. in the 1970s has now become one of the largest entertainment industries by revenue - greater than Hollywood and the entire music industry COMBINED. So there is plenty of opportunity with video games raking in record earnings and video game publishers being acquired for big bucks.

The gaming industry is going through a period of consolidation. This means that smaller franchises are being bought out by bigger companies. This can make the industry more stable, but it could also reduce the amount of creativity and innovation.

We can divide gaming companies as: single title, portfolio companies, hardware, cloud. As companies move from a single title to diversified game portfolios, they become more profitable, less risky, but may reduce game quality.

The industry is growing at 9% backed by the rise in lean console gaming, faster 5G internet, smartphone adoption, and other hardware. With new technology like Unity, Godot, and Unreal Engine, it’s becoming cheaper to create games, so small passionate developers could become serious competitors to larger companies. Having this in mind, other ways to invest in the industry include online-stores, hardware and peripherals, and cloud capacity.

People usually play games on PCs, consoles, or mobile devices. PCs are the most popular choice, but consoles have been growing in popularity. From 2015 to 2022, console sales increased from US$66 billion to US$108 billion. It’s estimated that by 2026, console sales will reach US$130 billion.

Investors in gaming are inherently assuming that market share will become more consolidated, people will spend more time playing games, more people will switch from traditional media to gaming, and more parts of the world will start using higher-margin products.