By Stephen Ong, Senior Account Executive, Phillip Futures
Despite its size and rapid growth, the video game industry still has significant room for further development and it has been considered by many to be one of the winning sectors in this pandemic. For the past 2 years, while business shutdowns and social-distancing measures have limited entertainment options for most during the COVID-19 pandemic, the video game industry has done remarkably well. The lockdown restrictions during the pandemic made gaming a popular stay at home activity for many consumers.
Game downloads across the world were up 75% from 2019 to 2020, and companies such as Activision Blizzard Inc. (ATVI), one of the leading video game companies benefited tremendously from the surge in global interest.
Fast Growing Video Gaming Stock
Price ($)(27/08/21) | Market Cap ($B) | EPS | Revenue Growth (%) | |
Activision Blizzard CFD | 116.345 | 64.11 | 3.34 | 24.6 |
Source: REFINITIV
Activision Blizzard has three main divisions and is the largest video game software company by revenue. ATVI develops, publishes and distributes interactive entertainment titles for Playstation, Xbox and PC. Some of their well-known franchises include World of Warcraft and Call of Duty.
ATVI’s video gaming assets rank among the most valuable in the industry, and it contributes to the company’s growth and development. The company has released hugely successful games under CEO Bobby Kotick’s leadership, and has consistently distributed dividends since 2010.
Both the top and bottom lines of ATVI’s second quarter earnings exceeded analyst expectations.
Based on Bloomberg’s report, here are the most important figures. Compared to expectations of $1.89B, revenue was $1.92B. The company reported $0.91 EPS against an expectation of $0.75. This world loves entertainment of all sorts, and video games are an especially compelling form of entertainment. Over the next few years, video games would likely continue to grow in popularity globally, allowing game publishers to expand operations both in developed and emerging markets by reaching new players.
The world loves entertainment of all sorts and video games are a particularly compelling form of entertainment. Over the next few years, video games will likely continue to grow in popularity globally, allowing game publishers to expand in both developed and emerging markets by reaching new players.
Some video game companies may not be able to continue creating successful franchises, but those that help to develop and grow the industry as a whole will likely reap the greatest rewards from continued growth. For investors, it may be worthwhile to keep in touch with this industry.
References:
⦁ Activision Blizzard (NASDAQ: ATVI)
Stephen Ong is a Senior Account Executive with Phillip Futures. With over 20 years of experience in the CFD, Forex, and Futures markets, he offers actionable financial insights on multiple asset classes and how best to implement a successful trading plan on market view.