Digital games are big business and investing opportunities will continue to grow, whether games are played on consoles, computers, or mobile devices.
Digital and video games are big business and will only continue to grow, whether they’re played on consoles, computers, or mobile devices. The category of game types is expanding, too.
According to Newzoo’s Global Games Market report, revenues for the global games market are forecast at $99.6 billion in 2016, up 8.5% from 2015, with mobile gaming taking a larger share than computer-based games for the first time.
The Entertainment Software Association (ESA), the industry lobbying body, notes that of the 13 best-selling categories of video games (meaning those played on some sort of console), the top three are action (28.2%), shooter (21.7%), and sports games (13.3%). In computer games, strategy games are the number-one best seller, at 37.7%, with casual entertainment (24.8%) and role-playing (20.2%) rounding out the top three.
Sure, games can be pure entertainment, such as Activision Blizzard’s (ATVI) Call of Duty: Advanced Warfare, the number-one selling video game in 2014, which falls into the first-person shooter category.
But many digital games also offer a discrete educational component. Microsoft’s (MSFT) Minecraft was 2014’s fifth best-selling video game; it encourages thinking skills to build structures. In the computer game segment, various versions of the city-building game The Sims, owned by Electronic Arts (EA), held several spots in the top 20 computer games sold in 2014, including number one.
A few of the top game developers are venturing into education. Microsoft, which bought Minecraft in 2014, offers MinecraftEdu, which teaches mathematical concepts. Electronic Arts has SimCityEDU, which is a learning and assessment tool covering various subjects for middle-school students. The series are real games, but seek to evoke and measure real learning in real ways; GlassLab developed the game with Electronic Arts to align with Common Core State Standards.
Sticking on an “educational” label can be an automatic turnoff for kids and adults, but not all educational games were created with education in mind. One of the most popular action games is the Assassin’s Creed series by French game developer Ubisoft (EPA: UBI), which offers a fictional history of real-world events. The teacher resource website Teach Thought lists Assassin’s Creed number 3 on its “50 Of The Best Video Games For Learning.”
Newzoo’s research shows the biggest growth in gaming comes from the Asia-Pacific region, with China accounting for one-quarter of global game revenue. North America comes in second. So it should be no surprise that the top publicly traded video game company, Tencent Holdings, maker of arena battle game League of Legends, is listed in Hong Kong. Newzoo said total revenues for Tencent Holdings were $8.7 billion, a year-on-year growth of 21%.
Close behind Tencent is Microsoft. Newzoo says Minecraft and the release of first-person shooter game Halo 5 were the main drivers behind Microsoft’s 36% year-on-year growth rate. Rounding out the top five are Sony (SNE), Apple (AAPL), and Activision Blizzard.
Read Part 1: More Than a Game: The Big Business of Video Games
Use Stock Screener to narrow selections based on sectors and more. Log in to tdameritrade.com > Research & Ideas > Screeners > Stocks
Debbie Carlson is not a representative of TD Ameritrade, Inc. The material, views, and opinions expressed in this article are solely those of the author and may not be reflective of those held by TD Ameritrade, Inc.
for thinkMoney ®
Financial Communications Society 2016
for Ticker Tape
Content Marketing Awards 2016
Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.
Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2021 Charles Schwab & Co. Inc. All rights reserved.