Gaming Stocks: Best Gaming Stocks to Buy 2024

The video game industry is a fast-growing market that could have a lot of potential to grow in the coming years.

What makes the video game industry and hence gaming stocks so fascinating, is that this tech sector brings together culture, entertainment and overall technological development into one thriving industry that many around the globe participate in daily.

New video game devices, combined with the progress of new technologies, are paving the way for potential growth in terms of market value in the coming years.

In this article, we will cover the top gaming stocks to watch for the foreseeable future, the latest trends and the options available to either trade or invest in gaming stocks. 

What Are Gaming Stocks?

A video game is an electronic game that can be played on a computer device, such as a personal computer, laptop, game console, or cell phone. Video games have come a long way since they first appeared in the 1970s. Today's video games offer realistic graphics and simulate reality to an extent that is amazing in many cases.

With technology trends such as Web3, the Metaverse and Artificial Intelligence (AI), among others, one can witness numerous rapid changes taking place which not only pushes forward this industry's progression but provides more options in terms of stocks to either trade or invest in.

Global advisory firm, PwC, forecasts that the entertainment and media (E&M) sector will generate US$3tn by the year 2026, with a large portion of this growth thanks to the video games sector.

Overall, the video game industry and hence, gaming stocks, includes all companies that are involved in the creation, design, marketing, delivery and production of video game hardware.

Here are some key stages in the development of the gaming industry:

• In 1971, the arcade game Computer Space was released and was followed by Atari Inc.'s first commercially successful video game, Pong. The games officially entered homes with the launch of an early game console called the Magnavox Odyssey.
• In 1978, the video game market took on a new look with a successful game called Space Invaders, which marked the beginning of the placement of arcade gaming machines in public spaces.
• The late ‘70s was also the beginning of personal computer games
• In the late ‘80s, the Nintendo Gameboy console was released, which gave a new impetus to video games
• The 1990s were marked by the use of CDs, 3D graphics, and the rapidly growing popularity of the Internet, which allowed many players to play in one game (multiplayer).
• In the 2000s, the development of the first games for mobile phones began, and the three main types of gaming were already emerging: computer, console, and mobile.
• From the mid-2000s to now, many video game companies and hence gaming stocks are now focusing on augmented reality (AR), virtual reality (VR), 3D game development, mixed reality (AR and VR), SaaS and Unreal Engine Game Development. 

Video games can benefit from the development of technology in a way that other more traditional industries may not have the capability to do. For traders or investors who are familiar with the technology space, this can be an interesting prospect.

In addition, the advent of technology such as virtual and augmented reality and increasingly powerful video cards (with the assistance of semiconductors) will allow users to fully immerse themselves in the gaming experience. 

So far in the year 2024, leading gaming trends include mobile gaming, cross-play games, virtual reality games, cloud gaming and blockchain gaming.

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What Types of Companies are Considered Gaming Stocks?

As one can imagine, there are many components within the video games companies which make up the selection of gaming stocks or gaming shares.

Here’s a distribution of the different types of video game companies:

• Design companies
• Software companies
• Hardware companies
• Publishing and distribution companies

Having a diverse distribution of sectors within the video game industry allows for any potential trader or investor to also diversify their portfolio if desired.

Are Gaming Stocks a Good Investment?

The gaming industry is no longer a niche for a particular age group or consumer segment.

With the advent of mobile games and improvements in the hardware used to play these games, they have become a viable form of entertainment for players of all backgrounds and ages.

Keep in mind, defining whether or not something is a 'good' investment or not is always subjective to the individual and risk tolerance profile.

With smartphones in the hands of billions of people around the world, everyone is a potential gamer. The rise of eSports and video game streaming on platforms such as YouTube and Twitch shows that people enjoy not only playing games but also watching and talking about them.

Video game companies that produce a compelling product can expect to gain a loyal fan base by collecting additional revenue in the form of downloadable content (DLC), promotional materials, expansion packs and sequels.

Thus, the video game industry is forecasted to reach $385 billion in 2023, with year-on-year growth of 7.9% up until 2027, according to Statista.

See below for more insight on the global games market by region as per the previous year of 2022: 

Source: Newzoo.com Global Games Market Report, Accessed on July 17, 2023

What are the Advantages of Investing in Gaming Stocks?

The below list shows the various potential advantages of trading or investing in gaming stocks:

• Exposure to a rapidly-growing industries 
• Exposure to innovation
• Opportunities for passive profitability in the form of dividends
• Opportunities for diversification of a portfolio of assets
• Opportunities to save or retire
• Inflation protection
• High liquidity, as some gaming stocks are frequently traded

Of course, every trader or investor can find many other reasons to make their investments in the gaming industry. Here we just listed some of the most common.

What are the Risks of Investing in Gaming Stocks?

Like any investment, buying gaming stocks has its risks. Below we list the most common risks to investing in gaming stocks:

• Sudden changes in the industry such as the disappearance/replacement of some products with the introduction of newer ones
• Potential government regulations on the gaming industry
• Higher volatility in stock prices compared to most other industries
• Higher valuation of companies in this high-tech industry (higher price/profit ratio)

These risks seem quite reasonable against the background of the rapid development of the gaming industry and expectations for new products and services in the future.

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The Top 5 Gaming Stocks to Watch 2024

Investments in video gaming stocks may involve some of the largest companies in the world, while companies with significant exposure to other sectors and industries may also participate.

Here is a list of the top gaming stocks to watch with some of the biggest players in the gaming industry, which operate in various segments:

Microsoft (MSFT)

One of the biggest players in the tech industry, Microsoft has much involvement in the gaming industry, thanks to its infamous Xbox Game Studios division. As a creator and publisher of video games, Microsoft is set to soon acquire Activision Blizzard in an effort to maximise the company's growth potential in the video game sector.

• While Microsoft's stock saw turbulent times in 2022, it has since recovered substantially in Q1 and Q2 of 2023 and maintains a market cap of $2.673 trillion.
• With the current Activision Blizzard acquisition pending due to various factors, this could mean the future of the MSFT stocks are uncertain for the rest of 2023.

Admiral Markets has the option to either trade the MSFT CFD or invest in MSFT shares directly.

See the below live TradingView chart for more insight on the Daily price fluctuations of the MSFT stock:

Electronic Arts Inc (EA)

Electronic Arts Inc is known for developing, marketing, publishing and distributing games, content and services for various game consoles, PCs and tablets/mobiles. They operate in a variety of video game genres under brands which house famous games like The Sims, Battlefield, Need for Speed among many others.

• The EA stock is forecasted to have a 12% compound annual growth rate (CAGR) into 2028.
• Rumoured of a potential buyout from Amazon, this could make the EA stock undesirable in the future as well.

At Admiral Markets it is possible to trade the EA CFD or invest directly in the EA stock using the Invest.MT5 account.

Activision Blizzard Inc (ATVI)

Activision Blizzard Inc., together with its subsidiaries, develops and distributes content and services on video game consoles, personal computers (PCs) and mobile devices worldwide. The company operates in three segments: Activision Publishing, Blizzard Entertainment and King Digital Entertainment. The company's key product franchises include Call of Duty, World of Warcraft, Diablo, Hearthstone, Overwatch and Candy Crush.

• Over the last 5 years (2018-2022), ATVI has seen steady growth in the company's product development as well as gross profit, a generally positive outlook for the gaming stock.
• Microsoft announced in 2022 they will acquire Activision Blizzard Inc for $ 75 billion in 2023, however, the deal is in review by regulators in the UK, US and EU due to potential anti-consumer issues.

At Admiral Markets, you have the option to trade the ATVI CFD or invest directly in the ATVI stock via our Invest.MT5 account.

NVIDIA Corp (NVDA)

NVIDIA Corporation is a visual computing company operating worldwide. It works in two segments, GPU and Tegra Processor. NVIDIA is considered to be one of the world's leading manufacturers of high-end graphic processing units (GPUs).

• NVIDIA has shown consistent growth and increased profitability since 2015.
• While NVIDIA remains competitive, there is much competition in this sector which may affect the stock in the long-term.

There is an option at Admiral Markets to both trade the NVDA CFD or invest directly in the NVDA stock via our Invest.MT5 account.

Roblox Corp (RBLX)

Roblox Corporation is an American company which operates an online entertainment platform which focuses on 3D experiences. Considered to be a very innovative platform, Roblox focuses on not only 3D integration but education, development and cloud services.

• Roblox has a niche focus of games for kids, with the product model focusing on an entire ecosystem, rather than a single game. This leaves the potential for growth in both the company and stock price.
• While Roblox has a large following, their graphics are below the average of competitors which may pose issues if they want to remain competitive in both the industry and in their stock price.

It is possible to invest in the Roblox stock via our Invest.MT5 account or you can trade the RBLX.US CFD in both price directions with our Trade.MT5 account.

As an Admiral Markets user, you have free access to the MetaTrader 5 platform, a leading trading tool which allows you to analyse stocks using various strategic indicators. Click the banner below for your free download:

How to Invest in Gaming Stocks

Traders and investors have various avenues to gain exposure to gaming stocks, each of which has its advantages and disadvantages.

Each investor must choose the right tools for themself, taking into account their personal capabilities, personal financial goals and risk tolerance.

Here are the 3 main options to invest in gaming stocks:

• Contracts for difference (CFDs) of gaming stocks
• Real game shares of gaming companies 
• An Exchange Traded Fund (ETF) investing in gaming stocks

CFDs on gaming stocks

A Contract for Difference (CFD) is a contract which is concluded between a trader and a broker to exchange the difference in the price of an asset. This contract is active until it’s closed by the trader, and payments under it are in cash, instead of the actual delivery of the traded asset.

Let's first note the advantages of trading Contracts for Difference in gaming stocks:

• Short sales. One of the main advantages of today's CFD trading lies in the possibility of short positions. In this way, one can potentially benefit from both rising and falling markets.
• Use of leverage. CFDs allow you to manage a larger amount than you have in your trading account. This happens through the use of leverage.
• Opportunity for transactions within a day. CFDs allow traders to take advantage of short-term price movements in gaming stock, index or commodity markets.
• Easy access to global markets. Easy access to many financial instruments, such as stocks, bonds, currencies, commodities, cryptocurrencies, etc. through an intermediary of your choice.

Like any investment, CFDs have their drawbacks:

• There’s no possession of the underlying asset (in this case, the gaming stock), with which there are no property rights in the case of bankruptcy of the company.
• CFDs may be a less regulated product than real stocks.
• The leverage effect can be a double-edged sword. This means that, in addition to increasing potential profits, this financial lever also increases potential losses.
• Swap fees to hold the position at night.

Stocks

Advantages of investments and trading in real gaming stocks:

• Real possession of the base share with all associated property rights
• Less risk due to lack of leverage
• No swap fees to keep the position open at night
• More stable regulation

At the same time, the disadvantages of investment and trading in real gaming shares compared to trading in CFDs of shares are:

• Lack of opportunity to open short positions
• Lack of opportunity to use leverage
• Potential for fees and commissions for purchase and sale
• Lack of opportunities to trade in many different markets

Whether one chooses to trade CFDs on gaming stocks or directly invest in gaming stocks, it is important to trade with a regulated broker.

Exchange Traded Funds in gaming stocks

In general, an Exchange Traded Fund (ETF) is a basket of securities that one can buy and sell on the relevant stock exchanges through a financial intermediary (broker).

These funds can invest in many different asset classes, one of which is gaming stocks.

The benefits of investing in gaming stocks through an ETF include:

• Lower costs because you can buy a basket of shares instead of just one
• Automatic portfolio diversification
• Tax efficiency (for example, actively managed mutual funds often buy and sell assets, which generates taxable capital gains, which is not the case with ETFs)

Disadvantages include:

• In some cases, ETFs may have lower liquidity than equities
• There may be some discrepancies with the underlying asset that follows the fund

There is no right or wrong tool to start investing in gaming stocks. One must choose the most suitable one for your trading and investment style.

You can invest in gaming stocks and ETFs with a regulated broker such as Admiral Markets. You can get started with these right now by clicking this banner:

How to Start Trading Gaming Stocks

If it is a viable option for a trader or investor to trade CFDs on either short or long positions, one may take the following actions to register an account with Admiral Markets:

1. Open a trading account
2. Download the MetaTrader5 trading platform.
3. Open a New Order window and make an initial trade.

For more information on how to open a stock trading account with Admiral Markets, watch the following short video:

Let's give an example of how to buy/sell CFDs on gaming stocks using Activision Blizzard.

How to buy shares

1. Log in to your account with Admiral Markets (MT4/MT5/WebTrader/Mobile app)
2. Go to Market Condition
3. Look for shares in Activision Blizzard
4. Right-click on the shares and then select "Chart Window"
5. Once the graphic appears, click on the "New Order" button (in the Toolbar below the menu)
6. Select the number of lots in the Volume field, as well as the stop loss and take profit levels, if you want to place these
7. Click on the blue "Buy on Market" button

How to sell shares

1. Log in to your account with Admiral Markets (MT4/MT5/WebTrader/Mobile application)
2. Go to Market Condition
3. Look for shares in Activision Blizzard
4. Right-click on the shares and then select "Chart Window"
5. Once the graphic appears, click on the "New Order" button (in the Toolbar below the menu)
6. Select the number of lots in the Volume field, as well as the stop loss and take profit levels if you want to place these
7. Click on the red "Market Sale" button

Do you feel more informed on the top best gaming stocks to watch, the advantages and disadvantages and how to start trading or investing?

It is possible to trade gaming stock CFDs and invest in gaming shares at Admiral Markets with a live account - Click the account below to register for free and start trading today:

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