Top Gaming Stocks

Written by Jennifer Clark
Posted March 3, 2021

The coronavirus pandemic has brought out the gamer in a lot of people. It’s been about a year since most of the U.S. had to dramatically adjust their lifestyles because of the emergence of the COVID-19 virus. People found themselves stuck inside with nothing to do after watching and catching up on TV shows. Some people decided to pick up new skills and engage in self-improvement, while others turned to video or electronic games. Though it seems easy to just switch on a game, that doesn’t mean it doesn’t take any skill or that you aren’t getting some type of mental exercise from gaming. 

Gaming involves mental and physical stimulation, which can provide entertainment and relaxation to players and spectators. It is also a powerful tool for helping children develop certain life skills and allows educators to supplement classroom teaching. Gaming has become an integral part of people’s lives not just for entertainment but for educational purposes. 

Not to mention, e-sports, multiplayer video game competitions between amateur and professional players, has been rising in popularity over the last few years. Some may see it as something that doesn’t have the benefits of “real” sports like basketball and football, but that's false. It actually qualifies as a real sport because it has the same emotional impact that physical sports have. 

Video game genres used to be limited and directed to a certain type of audience, but not anymore. Gaming companies realized they needed a wider audience, so they expanded to genres such as strategy, action, and simulation. The gaming market has shifted away from physical games to online games, which could be a good thing for business, with less money spent on manufacturing physical products. According to a market research study by Statista, revenue in the video game industry is projected to reach $154 million in 2021, with a forecast CAGR of 9.28%. 

Now that we’ve taken a brief look at the gaming industry, here are two gaming stocks you might want to check out...

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Activision Blizzard (NASDAQ: ATVI) and its stock show that gaming momentum is alive and well. ATVI shares are up by 63.9% from a year ago. Activision Blizzard has three divisions: Activision, Blizzard, and King. The company experienced strong performance throughout all three divisions and its top line grew in 2020, increasing 25% to $8.1 billion. The company recently launched its latest Call of Duty title back in November 2020 and has since seen an increase in user gaming time year-over-year. The company’s net revenue grew 22% year-over-year to $2.41 billion in its fourth quarter. While the company may be a little hesitant about a post-pandemic world, I don’t think people will stop playing games just because the pandemic is over. If anything, this is the new normal. 

Take-Two (NASDAQ: TTWO) recently reported strong third-quarter earnings that beat expectations in net bookings. Its game Grand Theft Auto 5 continues to be a success for the company. In the third quarter, Take-Two sold over 140 million copies compared to the 135 million copies sold at the end of the second quarter. Grand Theft Auto 5 remains one of the most-viewed games on Twitch in recent weeks, second only to League of Legends, which is free to play and popular throughout the world. Take-Two also has anticipation of Grand Theft Auto 6 going for it. The release of the game is going to be massive, and it will be successful when it hits the market. A successful launch of Grand Theft Auto 6 is going to bring in revenue and drive the company’s valuation even higher.

The gaming industry will have a prosperous next few years, especially as gaming remains a big part of people's lives with or without the pandemic. 

Until next time, 

Jennifer Clark
Pro Trader Today
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