Investing in Video Game Stocks
It is no secret that many industries have struggled during the COVID-19 pandemic. With the world self-quarantining and avoiding all non-essential public appearances, sectors such as events, hospitality and travel are understandably taking big hits. Countless small businesses have closed their doors! Hair and beauty salons are non-existent and restaurants are few and far between. In fact, one may easily assume that all sectors of the economy are in similar turmoil. However, not all industries are finding themselves in sharp decline. In fact, the video gaming industry has actually grown amidst our global lockdown.
According to The New York Times , entertainment services are facing huge losses; public places are off-limits due to self-isolation guidelines. Thus, public forms of entertainment like movies, sporting events and concerts are without patrons. In response, online entertainment services — mostly gaming — are actually booming! Companies involved in the video game industry such as Nintendo and Twitch.tv, for instance, are experiencing significant surges in traffic. With everyone cooped up at home, the gaming industry has transformed into one of the world’s sole sources of entertainment. Since the onset of self-isolation, Verizon’s data concludes that gaming traffic has increased by nearly 75 percent during peak hours. Newzoo similarly reports that both time and money spent on gaming has significantly increased during the quarantine.
Moreover, ‘Demand Gamer’s‘ largest equity fund, GAMR, has outperformed the US Market by over 15 percent in the last three months. Since mid-March when the United States was just beginning its nationwide lockdown, the gaming industry’s total return has increased quite dramatically. In stark contrast, the travel industry is suffering devastating blows with people ordered to stay at home. The retail industry’s revenues are declining significantly, perhaps due to the plethora of furloughed consumers and the transportation industry shares a similar loss of customers because remote working also means empty roads and airplanes. In simpler terms, many industries are facing near-fatal blows, while the gaming industry prospers.
The gaming industry’s success during these uncertain times perhaps emphasizes the importance of adaptability. For example, video game’s play from anywhere, work from anywhere atmosphere has allowed it to fare extremely well and be more reliable to consumers compared to other industries. Riot Games, more specifically, explains that, “Our IT and security teams have been working for several years to enable the company to be able to work from anywhere.” This preparation has allowed the company to adapt well enough to stay at home orders that they were able to launch a new mobile game during the quarantine.
The COVID-19 pandemic is shaking up the economy with “life as usual” looking very different than just a few months ago. The gaming industry, however, has fared exceptionally well due to its remote accessibility and ability to adapt to a new way of living. Schedule a video conference with one of our advisors to discuss a financial plan that is versatile as well.
This report is a publication of Demand Wealth. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.