The craze for videogames that peaked following the coronavirus outbreak last year hasn’t died out. This is contrary to the predictions of many that sales would decline once the economy reopens and people start going outdoors for entertainment.
This has seen sales jumping every month even this year, barring April when sales surprisingly took a hit.
Videogame Sales Continue to Soar
According to a new report from NDP Group, spending on videogame hardware, content and accessories hit a record $4.4 billion in September, reflecting a 3% year-over-year jump. The maximum spending was on hardware, with sales surging 49% year over year to $412 million.
On a year-to-date basis, spending on hardware, content and accessories reached $42.3 billion, marking a 12% increase year over year. For hardware, spending reached $3.4 billion, jumping 12% year over year.
This once again shows the underlying strength in the industry and how the gaming craze has only continued to grow over the years.
The gaming industry was already doing great and the pandemic worked miracles, as sales soared given that people spent billions last year. Spending on content also increased 10% on a year-to-datebasis to $37.1 billion.
Future Holds Promise
In September, Sony Corporation SONY and Nintendo Co. NTDOY continued to dominate the hardware segment. Sony’s PlayStation 5was the best-selling hardware platform both in terms of dollar sales and units. It was also the best-selling hardware platform in terms of dollar sales on a year-to-date basis, while Nintendo’s Switch was the bestseller in terms of units.
Mobile spending on games surpassed $2 billion in eight of the first nine months of 2021. Not many had thought that the videogame industry would hold on to the momentum it got last year.
As the economy reopened and people started getting vaccinated, outdoor entertainment joints once again started attracting footfall. That was expected to unsettle sales of videogames somewhat but that didn’t happen. September’s jump is the fifth straight month of increase and the picture is likely to remain rosy in the coming days too.
Also, last year saw the release of some big and attractive titles alongside the launch of new consoles. NPD Group’s Q2 2021 Games Market Dynamics: U.S. shows that spending on videogames in the second quarter of 2021 increased 2% year over year to reach $14 billion. The third quarter too is expected to be equally good given that sales jumped in each of the months.
Stocks to Watch
The videogame industry was already thriving and is booming this year too. Given this scenario, it would thus be ideal to invest in these stocks.
Microsoft Corporation MSFT is one of the leading videogame makers and manufacturers of hardware and accessories. The company has been expanding its footprint in the industry and recently announced that it will be acquiring videogame maker ZeniMax Media.
The company’s expected earnings growth rate for the current year is 15.2%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. Microsoft has a Zacks Rank #3 (Hold).
Sony Corporation designs, manufactures and sells several consumer and industrial electronic equipment. The company’s product roster comprises audio and video equipment, televisions, displays, semiconductors, electronic components, gaming consoles, computers and computer peripherals, and telecommunication equipment.
The company’s expected earnings growth rate for next year is 15.7%. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the past 60 days. Sony has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Activision Blizzard, Inc. ATVI is a leading developer and publisher of console, online and mobile games. The company’s Call of Duty is one of the most-popular gaming franchises globally. Its Overwatch League can be considered a pioneer of the e-sports concept.
The company’s expected earnings growth rate for the current year is 11%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. The company carries a Zacks Rank #3.
Electronic Arts, Inc. EA is a leading developer, marketer, publisher and distributor of interactive games (video game software and content). It distributes gaming content and services through multiple distribution channels as well as directly to consumers (online and wirelessly) through its online portals.
The company’s expected earnings growth rate for the current year is 16.3%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. Electronic Arts carries a Zacks Rank #3.
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