Top video game stocks this quarter include NVIDIA Corp., Inspired Entertainment Inc. and SciPlay Corp., all of which are up more than 25% over the past 12 months as rising interest rates hit the broader market.
The VanEck Video Gaming and eSports ETF (ESPO), the benchmark for the video game industry, has fallen more than 3% in the past year, compared with a 6% decline in the Russell 1000 index.
We look at the top three video game stocks in three categories: best value, fastest growing, and best performing. All data is as of May 2.
The Most Valuable Video Game Stocks
These are video game stocks with 12-month lows price to earnings (P/E) ratio. Because profits can be returned to shareholders through dividends and buybacks, a low P/E ratio indicates that you are paying less for each dollar of profit generated.
| The Most Valuable Video Game Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-month trailing P/E ratio | |
| Nintendo Co. Ltd. (NTDOY) | 10.32 | 48.1 | 13.8 |
| Playtika Holding Corp. (PLTK) | 10.10 | 3.7 | 14.4 |
| Inspired Entertainment Inc. (ANOTHER) | 12.83 | 0.3 | 16.7 |
Source: YCharts
- Nintendo Co. Ltd.: Nintendo is a Japanese multinational consumer electronics and video game company. It develops and manufactures portable and console gaming machines as well as software, playing cards and consumer electronics. It owns some of the world’s most famous video game franchises, including Super Mario, Pokemon and Zelda.
- Playtika Holding Corp.: Playtika is an Israeli company that develops and publishes free mobile games on a proprietary technology platform.
- Inspired Entertainment Inc.: Inspired Entertainment is a gaming technology company that supplies products such as gaming terminals and software to the gambling industry. Inspired Entertainment reported net income of $3 million on revenue of $79 million in the fourth quarter of last year, up from a loss of $1 million a year earlier.
Fastest growing video game stocks
These are the best video game stocks ranked by a grow a model that ranks companies based on 50/50 weights of their most recent quarterly year-over-year percentage revenues growth and their latest quarterly year-on-year earnings per share (EPS) grow.
Both sales and profit are decisive factors for the company’s success. Ranking companies by only one growth metric is therefore susceptible to quarter-to-quarter accounting anomalies (such as changes in tax laws or restructuring costs) that can make one or the other figure unrepresentative of the business as a whole. Companies with quarterly earnings per share or revenue growth above 1,000% were excluded as outliers.
| Fastest growing video game stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS growth (%) | Income growth (%) | |
| SciPlay Corp. (SCPL) | 16.86 | 0.4 | 256 | 18 |
| Electronic Arts Inc. (EA) | 127.42 | 34.9 | 217 | 5 |
| Activision Blizzard Inc. (ATVI) | 76.00 | 59.7 | 86 | 35 |
Source: YCharts
- SciPlay Corp.: SciPlay is a mobile gaming company that offers games such as Gold Fish Casino, Monopoly Slots and Bingo Showdown.
- Electronic Arts Inc.: Electronic Arts is a global digital interactive entertainment company. It develops games, content and online services for consoles, mobile devices and computers. In the last three months of 2022, EA’s net income nearly tripled thanks to modest year-over-year sales growth. The company also repurchased 2.6 million shares during the quarter.
- Activision Blizzard Inc.: Activision Blizzard is an interactive entertainment company that develops and distributes video games for mobile devices, personal computers and consoles. It also manages an esports league and online gaming service. The company reported broad-based growth in the first quarter of 2023, with year-over-year revenue growth across all operating units and geographies. Xbox manufacturer Microsoft (MSFT) offered to acquire Activision for $95 per share. However, US and European antitrust regulators do he promised to block the deal.
Video game promotions with the greatest momentum
These are the video game stocks that had the best returns or the smallest declines in total return over the past 12 months among the companies we’ve tracked.
| Video game promotions with the greatest momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12 month total return (%) | |
| NVIDIA Corp. (NVDA) | 282.10 | 697.0 | 45 |
| Inspired Entertainment Inc. (INSE) | 12.83 | 0.3 | 35 |
| SciPlay Corp. (SCPL) | 16.86 | 0.4 | 27 |
| Russell 1000 | ON | ON | -2 |
| VanEck Video Gaming and eSports ETF (ESPO) | ON | ON | 1 |
Source: YCharts
- NVIDIA Corporation: NVIDIA is a semiconductor company that derives most of its revenue from the sale of graphics processors for gaming computers. On February 22, the company released its fourth quarter results; net income fell more than 50% on a 23% decline in revenue. Nevertheless, NVIDIA shares are up nearly 50% this year on enthusiasm over the growth prospects of its artificial intelligence business.
- Inspired Entertainment Inc.: See company description above.
- SciPlay Inc.: See company description above.
Trends in the video game industry
Video game makers benefited early in the COVID-19 pandemic as many consumers holed up at home and turned to home entertainment. Consumer spending on video games will climb to more than $60 billion in 2021, up from $43 billion in 2019. Sales have been declining since then, but developments in artificial intelligence and virtual reality could make 2023 a memorable year for video game stocks.
Mobile gaming attracts more users than console and PC gaming – with an estimated user base of more than 160 million people – and is expected to grow in the coming years, while console and PC gaming will lose users. As more gamers play on their smartphones, mobile gaming ad spending is expected to grow at an average rate of 8-10% over the next few years.
Benefits of Video Game Stocks
Video games remain a growing industry. According to market research firm Grand View Research, the global video game market was worth more than $195 billion in 2021 and is expected to grow at compound annual growth rate (CAGR) by 12.9% until 2030.
Several factors are likely to contribute to the rapid growth of the industry. For starters, constant technology upgrades provide video game enthusiasts with a better gaming experience. Various new monetization models also allow video game companies to devise strategies to encourage consumers to spend money on products after the initial purchase of a game or hardware. Emergence absorbing, meta versionThe style game can also attract a new global audience.
