Once upon a time kids were told growing up “Go play outside,” “Video games will rot your brain,” and my personal favorite, “You need to get a job, you can’t make money playing video games all day.” Well, it looks like parents of the past were sadly mistaken on all fronts except playing outside (childhood obesity is no joke, but that’s a whole separate issue).
NPD Group released a report outlining how large the video game industry actually is, and we dug up some other facts and figures:
- July 2018 sales topped $749 million, a 14% growth year over year
- July 2018 hardware sales rose 19% to $217 million (think gaming consoles)
- July 2018 accessories sales climbed a whopping 49% to $286 million
Accessories? Its a digital program… And you’re right, but with the invention of Twitch, YouTube Gaming, and the popularity of streamers, accessories are a category taking off all on its own. Game controllers and pads, headset / headphones, and web streaming hardware all make up the “accessories” category for video games, and show no signs of slowing down.
The biggest gains in hardware (again, gaming consoles), came from XBox One ($MSFT), PlayStation 4 ($SNE), and Nintendos (OTCPK: NTDOY) Switch, which was arguably the hottest item in 2017 and 2018.
From a software side, we saw some massive hits on a console segment (keep in mind, we are only talking console games here, not PC games such as Overwatch or Fortnite). Take Two Interactive ($TTWO), Activision-Blizzard ($ATVI), Nintendo, and UbiSoft (OTCPK: UBSFY) all saw fantastic sales.
There are quite a few gaming companies out there, and some of them being overseas, have ADR’s. Playing the whole video game market can be done through a video game ETF launched in 2016, with the ticker GAMR (ETFMG Video Game Tech ETF). They include holdings of traditional software companies, but top ten holdings include companies like Electronic Arts ($EA), also held by other funds. GAMR also includes Glu Mobile, Take Two Interactive, Nexon, Ubisoft, Capcom, and Zynga, for a well rounded portfolio.