While the coronavirus pandemic has been largely bad news for businesses and marketplaces across the globe, it’s fair to surmise that some sectors have fared considerably better than others.
Take the video games business, for example, which has continued to boom as people have been compelled to spend more time at home during the pandemic and its subsequent lockdowns.
The industry also benefited from the release of next-gen consoles by Sony and Microsoft, which has sent demand for hardware soaring and boosted share prices in the process.
But how can you invest in video game stocks, and which share options offer the most tangible value in 2021?
How to Invest in Video Game Options
In truth, it has never been easier to invest in gaming stocks, with a number of vehicles accessible to traders in the digital age.
Not only can you invest in individual stocks, for example, but it’s also possible to trade equities via various indices through your forex broker.
This type of vehicle usually takes the form of a contract for difference (CFD), which allows you to speculate on the trajectory of a particular index without assuming ownership of the underlying financial instrument.
In the case of large-cap indices such as the Nasdaq and the S&P 500, you can also increase your exposure across different sectors and diversify your interests quickly, effectively and without rapidly scaling your initial investment.
What are the Best Gaming Stocks to Invest?
The question that remains is which gaming stocks offer the best value in the current market climate? Here’s our top three options:
- Tencent
We start with Chinese brand Tencent, which makes our list despite not enjoying much name recognition outside of its homeland.
However, the conglomerate has grown to achieve a market capitalization in excess of $700 billion since its launch, thanks to its broad range of interests that encompasses social media, fintech, e-commerce in addition to gaming.
From a gaming perspective, it currently offers more than 140 licensed games, with more than 40 new titles and updates unveiled in June of last year.
It has also secured an ownership stake in Epic Games (which is renowned for developing the Fortnite title which attracts a following of around 350 million players), making it a particularly lucrative investment option in the short and medium-term.
- Sony
A staple feature of the popular Nasdaq index, consumer electronics giant Sony enjoyed a stellar 2020 on the back of the aforementioned release of the next-gen PlayStation 5.
This has definitely revitalized interest in Sony as a viable investment option, with the previous generation of PlayStation (the PS4) having been launched as long ago as 2013.
Given the increased technological capacity of the PS5 and the console’s quicker load times, the device offers an improved gameplay experience and dramatically enhanced graphics across the board.
Interestingly, preliminary sales data suggests that the PS5 outsold Microsoft’s competing Xbox Series X by six-times following its launch, attracting the attention of investors in Asia and from across the globe.
- Microsoft
Despite seeing its Series X console heavily outsold by the PS5, Microsoft remains a viable long-term stock option and one that’s available through both the Nasdaq and S&P 500 indices.
The reason for this is simple; as the brand retains a far more diverse business portfolio than many of its gaming rivals, with Microsoft a market leader in the field of Cloud computing and the production of desktop devices.
Even the initially slow sales of the next generation Xbox aren’t as damaging as they may initially seem, with the launch creating a significant buzz around the brand against the backdrop of its first console release in more than seven years.
Investors will note that Xbox sales as a whole have seen significant growth since the start of the pandemic, with revenue increasingly by 30% during the most recent quarter as customers sought out different types of indoor entertainment.