Video games are fast becoming a dominant force in the entertainment space. As reported by the BBC, gaming was already worth more in 2019 than music and video combined.
The market has only kept growing ever since, weighing over ₹22 000 billion as of 2023 according to research company Mordor Intelligence. Investing in gaming can be a profitable way to diversify one’s portfolio. So, let’s explore how to invest in this booming industry.
What does the gaming sector encompass?
Accounting for about 3 billion gamers worldwide, the gaming industry shall hit a new peak by 2029 as Statista projects it could reach 3.02 billion users.
The gaming sector amounts to every company involved in producing and selling the very video games that have become such a hard-hitting global phenomenon. From PC to mobile games, the industry covers numerous activities, including the conception of ever-so-cutting-edge consoles and the organisation of competitive gaming events.
Massive names in the industry comprise Tencent, Sony, Nintendo, and Microsoft, whose acquisition of American developer Activision Blizzard broke every industry record in 2023. Incidentally, 14 out of the 20 most expensive mergers in gaming history took place between 2020 and 2023.
As the industry gets bigger and bigger, more lucrative opportunities arise for stakeholders willing to invest in everything from merchandise vendors to retailers and game distributors.
Different ways to invest in gaming-related companies
Investing in gaming can be achieved through gaming stocks. This process entails buying shares of publicly traded gaming companies on stock exchanges. By choosing this option, venture capitalists can profit from the industry’s growth by putting money into its top players.
However, it is important to consider a company’s prospects and current relevance since controversies may significantly damage its performances, as shown by the recent turmoil that has seen Ubisoft’s shares plummet to a 10-year-low level.
Besides, some of the biggest publishers are not publicly listed. In the case of Rockstar Games, the developer responsible for the GTA franchise, the only available method is to lay out money on its owner Take-Two Interactive.
By extension, this means investing in other company projects like Take-Two’s Bioshock or Civilization series. Investors with a greater financial reach can also entrust their funds to private investment and venture capital firms, although these options usually require a minimum input of roughly US$500,000.
Gaming funds are another preferred method for investors unwilling to spend their money on a single gaming company, which can be a risky move depending on said company’s fluctuating circumstances. These exchange-traded funds pool money from a range of individual investors to purchase shares in different assets.
Mutual funds such as the VanEck Vectors Video Gaming and eSports offer to invest in as many robust gaming-related equities as EA and Roblox, alongside leading-edge tech firms like the graphics card producer Nvidia.
Why invest in the gaming industry?
Gaming’s impact transcends entertainment, extending to the growing gamification of the retail and hospitality sectors. According to gaming industry statistics company Newzoo, the number of gamers will grow by a whopping 6% every year. Some segments of the industry show tremendous promise.
For instance, forecasts reveal that esports revenues may soon reach up to US$1,866.2 million. With an active and fiercely engaged demographic, competitive gaming is looking at a bright future. Investors might gain exposure to esports companies by buying shares directly or opting for esports ETFs.
Specialised industries like iGaming are also projected to reach a market volume of US$132.9 billion by 2029. By the same year, user penetration is expected to hit a record 7.7% as per Statista.
Investors can follow the advice of hedge funds to choose gambling stocks and iGaming ETFs with the strongest track record. In India, the online gaming sector is on an upward trend even with the ambiguity surrounding its legality.
Despite ongoing debate among regulators and tech enthusiasts, platforms like Vegasslotsonline IN keep attracting new players keen to try their luck at tabletop games and machine slots. Thousands of games are available in a few clicks, ranging from free-to-play to real-money options.
Many bonuses await users on both mobile devices and desktop computers. Hitting a million visitors every month, such websites are proof enough that the iGaming sector is shooting up.
Bottom line
No longer a geeky hobby, gaming is a worldwide phenomenon whose financial prospects have never been so bright. For those investors eager to jump on the gaming bandwagon, funds and stocks are easily accessible via dedicated investment platforms.
