Seek the ultimate prize in video game stocks.
It’s all too easy to dismiss video games as kids’ stuff, especially if you’ve got a teenage spawn glued to a screen despite all entreaties to do homework or eat. But from an investor’s viewpoint, Junior’s onto something: Video games equal big, big business. In fact, you could compare the sector to an action platform battle — call it Call of Lucre — where the object is to slog your way past hype traps and prophets of doom in search of the ultimate prize: profits. Here’s a look at eight video game stocks that are truly in it to win it.
Activision Blizzard (Nasdaq: ATVI)
In 2015, the Santa Monica, California-based giant behind the Call of Duty franchise placed a risky bet, purchasing King Digital for $5.9 billion. King’s only claim to fame was the blockbuster Candy Crush — but a year later, ATVI was up a fifth. Since the King deal, Activision has rocketed more than 180 percent, now trading at $63 per share. That includes a 67 percent jump in 2017, with new revenue driven by expansion packs that add content to already popular games.
Electronic Arts (EA)
Among gamers, EA has fostered no shortage of disdain: Two years straight (2012-13) Consumerist named Electronic Arts the worst company in America. The stock had fallen two-thirds in six years, prompting EA to begin an aggressive effort to reverse its image of a greedy company making subpar products. It’s paid off handsomely. This maker of the Madden football series has seen its stock go up nearly 400 percent since 2014.
Nintendo Co.
Nintendo’s Wii line never quite caught on with consumers — and then the company literally threw the Switch. The hybrid Switch console is the first of its kind, letting gamers play at home through their TVs or on the go. It has become the fastest-selling console to hit Japanese market, at more than 3.2 million units in 2017 and more than 10 million worldwide. Since the Switch bowed in March, over-the-counter Nintendo is up 76 percent.
GameStop Corp. (GME)
A staple in strip malls, GameStop’s 4,400 domestic stores also serve as de facto gaming nerd hangouts. Yet the chain hasn’t fared nearly so well as the rest of the industry, announcing in March it would close more than 100 stores worldwide. GameStop stock began its tumble in October 2015, when weaker-than-expected third-quarter sales punished shareholders. Since then, GME has sunk 61 percent and in 2017, the stock dropped nearly a third.
Sony Corp. (SNE)
The Japanese electronics empire saw one of its first-year sales records tumble, as Nintendo’s Switch bested the mark held by PlayStation 2. Sony hasn’t released a major PlayStation update since the PS4 in 2015 — and fans awaiting Version 5 could wait until 2021, according to industry analysts. But the likely reason is the PS4, among gaming tricks, prints money. Sales have topped 70 million consoles and helped propel Sony stock 60 percent higher in a year.
Ubisoft Entertainment
While the name doesn’t boast the same general market cache as Sony or Microsoft, Ubisoft has risen from a rural French startup into a major player, thanks to franchises such as Assassin’s Creed and Watch Dogs. Trading in Europe under the UBI ticker, Ubisoft has an $8.6 billion market cap and five years of uninterrupted share-price growth. If you bought into Ubisoft in January 2013, your stock would be worth more than eight times the original investment today.
Microsoft Corp. (MSFT)
Some of Microsoft’s investments, such as its $26.2 billion purchase of LinkedIn, are difficult to connect to any bottom line profit or loss. But there’s no doubt the Xbox platform, introduced in November 2001, has proven a literal game changer. Xbox was once considered dicey — Microsoft had no prior experience making gaming consoles — but to date, all Xbox variations have combined worldwide sales topping 140 million. Over five years, MSFT shares have more than tripled.
Sega Sammy Holdings
Sega was once a console kingpin — ’80s gamers remember the Sega Genesis fondly — but hard times forced it into a merger and a switch to game development. Sonic the Hedgehog, besides saving the world from the evil Dr. Robotnik, has kept Sega alive; the character inspired a comic book, TV, movie and toy lines and several gaming reboots. Yet even Sonic has his work cut out for him. Sega Sammy stock fell 20 percent in 2017 on the Tokyo Stock Exchange.
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8 Plays for Video Game Stocks originally appeared on usnews.com
