The U.S. videogame industry started this year on a high and has enjoyed a solid run. People continue to spend more on console games and hardware as the pandemic has left them with fewer choices of entertainment.
According to the latest data from the NPD Group, spending on videogames jumped once again in February, marking one year of continued gains amid pandemic-related disruptions. And given that the situation has remained more or less the same for a year, the videogame industry is likely to make further gains.
Spending on Videogames Jumps in February
According to the latest report from the NPD group, spending on videogames in the United States jumped 35% in February on a year-over-year basis to $4.6 billion. Hardware sales grew the most, surging 121% to $406 million.
Software sales that include spending on gaming content like console, mobile, PC, cloud and subscription services grew 30% to $4 billion. Total spending on gaming accessories jumped 41% to $195 million. So far, the first two months of 2021 have seen total spending on games growing 39% on a year-over-year basis to $9.3 billion.
Among all the categories, Nintendo, Co’s NTDOY Switch was the best seller both in terms of consoles and dollar sales, making it the best February for any console game since 2009. Sony Corporation’s SNE PlayStation 5 emerged as the second-best performer in terms of consoles sold.
Videogame Industry on a High
According to an earlier report from NPD Group, videogame sales hit $56.9 billion in 2020 in the United States, soaring 27% from the previous year. This is also the highest sales ever generated.
The pandemic saw millions of people stuck in their homes with not too many options for entertainment, as parks and theatres remained closed. This saw them spending more on consoles and software, thus making it a great 2020 for the videogame industry.
One year down the line, despite three COVID-19 vaccines rolled out, the situation hasn’t changed much as new cases are still being reported and fears continue to escalate. According to Newzoo, global videogame revenues could reach $189.3 billion in 2021, taking the total games to 2.8 billion worldwide. Thus 2021 could also turn out be a fruitful year for the gaming industry.
The videogame industry has started 2021 on a high note, given that the pandemic is still keeping people indoors and is likely to result in surging sales in the coming days. This thus makes it an opportune time to invest in gaming stocks that are sure to gain in the near term.
Microsoft Corporation MSFT is one of the leading videogame makers and manufactures 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 28%. The Zacks Consensus Estimate for current-year earnings has improved 9.5% over the past 60 days. Microsoft carries a Zacks Rank #2 (Buy).
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 the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 34.2% over the past 60 days. Sony has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Capcom Co., Ltd. CCOEY plans, develops, manufactures, sells and distributes consumer video games. Its operating segment consists of Digital Contents, Arcade Operations, Amusement Equipments and Other Businesses.
The company’s expected earnings growth rate for the current year is 43.5%. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days. Capcom has a Zacks Rank #2.
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