The video gaming industry is a $135 billion per year enterprise that is growing exponentially due to technological advancement and the increasing accessibility to electronic devices across the globe. There are estimations that the gaming industry will grow to a market size of $180.1 billion in 2021, which obviously makes it one of the best investments you can make. With so many popular video games on the market such as Minecraft, Fortnite, RocketLeague, and Overwatch, it’s not a surprise that the video gaming industry is expected to surpass the music industry within the next few years and become the second-largest media industry.
In this article, we will offer three ways to invest in the gaming industry in 2020 and beyond.
3 ways to invest in the gaming industry
Obviously, there are different ways to invest in the gaming industry based on an investor’s risk/reward preferences.
Angel Investor in the gaming industry
If you are looking for high risk/reward investment, angel investment if the perfect choice. In simple terms, angel investor provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. There are multiple platforms that enable you to invest in video gaming startups. Those include AngleList, CrunchBase, and PlayVentures.
Angel investments can range from $1,000 to $100,000 and even more than that, depending on the type of investment. Angel Investments is a high-risk investment as the founders usually don’t have enough capital to complete their product. Some Angel Investors diversify their investments to reduce the risk, hence, they invest in several start-ups and take into consideration that most of the stat-ups will not succeed. For example, an Angel Investor might invest in 10 start-ups in the gaming industry with a prediction that seven of them will fail and three might generate high revenues.
Invest in a Gaming Industry Portfolio
Investing in a gaming industry portfolio may be the easiest and the most efficient way to enter the market. However, you won’t find many companies that offer a built-in portfolio where you can simply invest and track the portfolio’s performance. The best option we have found that allows you to invest in a gaming industry portfolio is through eToro. eToro’s gaming industry’s portfolio has $2-$5 million assets under management and comprises the leading companies in the gaming industry and its asset allocation includes Tencent Holdings Ltd (HKG:0700), NVIDIA (NASDAQ: NVDA), Sony Corporation (NYSE: SNE), Advanced Micro Devices (NASDAQ: AMD), Nintendo (OTC: NTDOY), Hasbro (NASDAQ: HAS), Electronic Arts (NASDAQ: EA), Zynga (NASDAQ: ZNGA), Activision Blizzard (NASDAQ: ATVI) and more.
You can find all the details about eToro’s gaming industry portfolio here.
Buy video games stocks
Another way to invest in the video gaming industry is by purchasing stocks of the leading companies in the gaming industry. Through this option, you might get more flexibility and be able to diversify your portfolio based on your preferences, while on the other hand, the process might be a bit more complicated and you will be required to invest a high amount of capital to get substantial revenues. Regardless, once you find a good broker, start searching for the best video game stocks in the market.
Here are some of the top video game stocks in 2020 and beyond include:
- Changyou.com Ltd (NASDAQ: CYOU)
- Electronic Arts Inc. (NASDAQ: EA)
- CAPCOM (TYO: 9697)
- SciPlay Corp (NASDAQ: SCPL)
- Zynga Inc (NASDAQ: ZNGA)
- Take-Two Interactive Software Inc (NASDAQ: TTWO)
- Tencent Holdings Ltd (HKG: 0700)
Bottom line
With the increasing technological development, there are many unique investment opportunities in the markets such as cybersecurity stocks, Artificial Intelligence stocks, and cannabis stocks. Yet, there’s no doubt that the gaming industry is here to stay and will continue to grow in the upcoming years. In conclusion, the gaming industry is without a doubt a legitimate long term investment that may potentially render a high return.
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