I almost did something last week I haven’t done in years.
I almost bought a gaming console.
I love working. I love reading. I love watching Netflix. But I admit that even with some exercise and a walk thrown in there, I’m looking for something else to do.
And you know me. I need to do my research.
I may not yet know which console will be best for me, but I know about a lot of the gaming companies. And they are on the move right now.
If you’re looking for a sector that’s nearly corona proof, look here …
I’ve shared before how thrilled I was to get courtside seats to my hometown Philadelphia 76ers’ games this past season. I couldn’t make it to every game, but I loved the ones I did go to and was looking forward to the playoffs.
Well, you know what happened.
The NBA suspended play with every other sports league because of the coronavirus.
So, maybe I can get a gaming console and a virtual reality (VR) headset and not only put myself courtside but put myself in the game!
Video games have come a long way through the years, and the technology keeps getting better and better. There are all kinds of games, some of which now have professional leagues. Yes, video gaming is now considered a sport globally, and it’s one that can be played even while we isolate ourselves.
With professional sports leagues on hold, more investors are learnings about eSports’ incredibly bright future. The industry is expected to grow from $694 million in 2017 to $2.17 trillion by 2023, per MarketsandMarkets
The professional sports leagues were already embracing eSports, but they’re turning to it more than ever amid the pandemic. The NBA had some of its stars compete in a tournament with the video game NBA 2K. The MLB is doing the same with The Show. And it was announced today that Alexander Ovechkin and Wayne Gretzky will compete in a three-game tournament of NHL 20 next week to raise money to help with the coronavirus.
I’ve talked this week about hypergrowth trends that that are accelerating because of the coronavirus. Gaming is another good example. With much of the world staying at home right now, video games are a huge source of entertainment, whether you’re playing with your family at home or online with your friends. You can also stream online through the consoles.
So many people have been playing video games that Microsoft’s (NASDAQ:MSFT) Xbox Live suffered a disruption in service. Sony (NYSE:SNE) had similar issues with its PlayStation.
Gaming stocks are outperforming by a wide margin. As you can see below, the broad ETFMG Video Game Tech ETF (NYSEARCA:GAMR) is down only 4.6% since February 19 versus a 17.4% drop in the S&P 500. For the year, GAMR is up 3% while the S&P is down 13.5%.
Individual stocks have done even better. Several hit new 52-week highs just today:
Activision Blizzard (NASDAQ:ATVI) makes Call of Duty, World of Warcraft, Candy Crush, and other popular games. The stock is up 47% over the last 12 months. CEO Bobby Kotick recently said the company has 350 million users currently… and expects to hit one billion within five years.
Electronic Arts (NASDAQ:EA) has been around for 38 years and produces many of the big sports games, including NBA 2K, NHL 20, Madden NFL, and FIFA. It makes non-sports games as well like Battlefield, The Sims, and Apex Legends. EA is up 20% over the last 12 months.
Sea Limited (NYSE:SE) is based in Singapore and serves Southeast Asia and Taiwan, which is being digitally transformed. Its Garena gaming platform includes hits like League of Legends, FIFA Online 3, and Arena of Valor. SE has more than doubled in the last 12 months and is up 33% so far in 2020.
Zynga (NASDAQ:ZNGA) focuses more on social games. It became known for its popular Farmville game on Facebook, but it also produces games for mobile platforms. Other popular games include Words with Friends, Solitaire, and Dawn of Titans. Its 26% gain here in 2020 brings its 12-month surge to 42%.
Nintendo (OTCMKTS:NTDOY) is seeing a massive spike in demand for its Switch console, which is selling out at Amazon, GameStop, BestBuy, Target, and other retailers. The time-tested leader in gaming with Super Mario and other mega hits has surged more than 40% off its lows in just the past month. It has been a leader and innovator for decades, and I have recommended the stock for some time.
So, in addition to buying a gaming console sometime soon, I may be buying more gaming stocks as well. They’re certainly worth a look, as I expect the trend to stay strong for a long time to come.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.
