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The Gaming Industry and Why You Should Start Investing in it
Investing in gaming made the gaming industry a huge market that reached over $152 billion in profit in the last year, and it has grown 11% in the last seven years. Considering that the gaming market from only 100 million active players in 1995 to over 3 billion active players in 2020, the market's growth is not only a possibility but an eventuality.
Also, the large viewership audience of people who watch other people play video games is slowly becoming a major form of entertainment. Nowadays, over 500 million people watch others play video games, and surprisingly 40% do not play the game themselves. People's interest in gaming and its aspects is undeniable, and this interest is destined to grow as technology advances and games become more accessible.
This means that investing in gaming is a near-fool-proof way of earning passive money from your investments. Given the fundamental interest and potential it has listed above, investing in this industry is among the easiest choices to make.
Investing in Gaming
There are several reasons people are starting to invest in the gaming industry, and every year, more and more are investing in these companies as they grow. These investments promise the potential for significant profits, thanks to their ability to overtake and outperform inflation rates. There are excellent opportunities for individuals to establish regular incomes as well.
There are different facets where you can invest in gaming. These are video games, Esports teams, and infrastructure companies. Each of these is a significant part of gaming. The first one is the games people play, the second is the people who play the games professionally, and the last are services that make the player's gaming experience better.
Each of these makes for amazing investment opportunities, and the deciding factor that will be the key to you profiting from your investments would be how wisely you choose which one to invest on. Regardless, whichever choice you make, the industry's guaranteed growth can ensure that you won't lose as much money compared to more traditional investments.
What Is Gaming?
Gaming is running different specially made applications known as video games on different computers, phones, or consoles. Despite the close relation of the term "gaming" shares with "gambling," most gaming activities in this industry do not involve gambling in its traditional sense. Thus, it makes it even more attractive for even the most casual users who spend just a few minutes on these applications each time.
Gaming has grown significantly from its early days, wherein Pong was the only game available. Nowadays, the gaming industry and its players are spoilt with thousands of games from different genres and on different devices. This makes the industry one of the biggest entertainment forms nowadays and one of the most profitable, especially for the companies that own video games with microtransactions.
How do I invest in the video game industry?
As an investor, there are multiple ways you can choose to invest in these games and potentially make a profit from this quickly developing space. Here are a few things you can invest in this industry.
1. Investing in Video Game Studios
A large part of the industry is dominated by big developers that you can access through public equity markets. Some of the largest gaming companies offer stocks for their investors, and investing in them gives you the chance of profiting from all of their titles and business lines.
Another option is investing in early-stage video game studies with a ton of potential. These games are generally found on Kickstarter, wherein the gaming section was the first to reach over a billion dollars in investment.
Investing in these studios isn't different from investing in traditional stocks, except that their potential for massive growth is better, and the risks of failing are also increased.
2. Investing in Professional Esports Teams
Investing in these teams is essentially investing in the people who play for these teams. Similar to investing in different groups in other industries, this is the preferred way of gaining access to the quickly growing competitive scene around different video games.
These professional Esports teams have been trading at around 14x multiples. Compared to the 5x multiple seen on traditional sports teams, the margins here are better. However, the business model for these teams is still in the early stages.
3. Invest in Infrastructure and Technology Companies
This is investing in gaming through companies that support the gaming industry. This includes investing in the companies that develop the hardware and equipment that the people who play are using and the services that make gaming more popular.
Investing in these will give you diversified exposure to the industry, and you wouldn't have to rely on the success and failure of any particular game or genre, making it potentially the safest way to invest in gaming.
How Do I Find Investors for Video Games?
If you are looking to find investors for your video game, finding these investors is not as difficult as it once was. Thanks to the amplified reach of different social media platforms, finding people who would be interested in investing in your product has never been easier. As long as you successfully raise awareness about your game on different platforms, finding investors in gaming is guaranteed.
Also, other places are specifically designed to be a hub for companies to find potential investors that makes this process even easier. These services will effectively boost your progress and growth towards establishing your foothold in the industry.
What Is the Best Gaming Company to Invest on?
There is no single right answer to this question. The performance of these companies heavily depends on the way gamers perceive them at any given time. Regardless, a few notable companies have continuously maintained their popularity despite the gaming industry's quickly changing climate.
1. Video Game Studios:
These are a few companies that have stood the test of time or have grown significantly in the last few years.
• Capcom (OTC:CCOEF)
• Tencent Holdings (OTC:TCEHY)
• Activision Blizzard (NASDAQ:ATVI)
• Take-Two Interactive(NASDAQ:TTWO)
• Electronic Arts (NASDAQ:EA)
2. Infrastructure and Technology Companies:
These are tech companies that make products and components needed for gaming. And, all of them are among the most trusted brands in the industry today.
• Logitech International (NASDAQ:LOGI)
• Microsoft (NASDAQ:MSFT)
• NVIDIA (NASQD:NVDA)
Why You Should Invest In the Future of Gaming Stock
The gaming industry is a rapidly growing market that can keep on growing in the next few years. With the fast growth of global revenue and the technological advancements that make gaming more accessible, the prospects for the industry's growth are guaranteed. These are amplified by the different services that help make gaming a form of entertainment for the players and casual onlookers.
The key factors you should invest in gaming stocks are accessibility, people’s interest, and relatively low risks. These should be enough to convince you.
What Is the Best Gaming Stock to Invest on?
Just as there isn't a single best company that you can invest in, there isn't a single stock that can be considered the best gaming stock you can invest in. Other than the companies listed earlier, there is another option targeted at people who want to invest in the industry as a whole. These are generally less risky and are great for new investors.
1. Gaming Industry ETF:
• VanEck Vectors Video Gaming and eSports ETF (NASQAD:ESPO)
• VanEck Vectors Gaming ETF (NASDAQ:BJK)
• Global X Video Games & Esports ETF (NASDAQ:HERO)
How to Invest in Gaming Stocks?
When looking to invest in gaming stocks, there are a few things you need to keep in mind. The gaming industry is very diverse, and there are several layers surround its aspects. And each of these is bound to perform differently at any given time. If you want to invest in these gaming stocks, it is best to do thorough research before diving head-on into this financial space.
Regardless, here are a few things you need to know. High-quality gaming stocks are not always available. Investing in them is usually a great long-term plan as the companies who offer them are more than capable of sustaining their growth and recovering from potential losses. On the other hand, smaller gaming stocks are more accessible, and the profits you can get from them can be explosive, but these stocks can fall just as abruptly.
How to Start Trading Gaming Stocks?
Just as with any stock investments, the first thing you need is to join a platform that offers the stocks you want to invest in their listing. These platforms often include other stock options from the different markets and let you grow your portfolio significantly. They also have a guide that can help you make better investment strategies and tools to monitor your investments.
Joining one of these is the prerequisite to investing in stocks. The next thing is doing your research on the stocks you want to invest in to ensure that there will be no issues with your investments. And, lastly, hope for the best.