Top 5 Gaming Stocks to Buy in 2024

Summary: The gaming industry is one of the fastest-growing and most lucrative industries in the world, having generated almost $250 billion in 2023 alone. Thus, it is no surprise that a growing number of tech-oriented investors have been eyeing some of the better-performing video game stocks. To start buying video game stocks, investors can register at an online stock trading platform such as eToro.

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Top 5 Gaming Stocks to Buy in 202

Many investors are wondering what gaming stocks to consider for their investment portfolio in 2024. After all, the video game industry has never been stronger, and there have been many companies making significant strides in recent years, both in the triple-A and indie spheres. This growth can be attributed to rapid technological advancements and the increasing popularity of gaming across various demographics.

To help you navigate the video game stock landscape, we have compiled a list of the top five gaming stocks worth considering in 2024. The companies on our list have demonstrated strong financial performance as well as promising growth prospects. So, by keeping a close eye on their stocks and considering their potential, you can make informed investment decisions that will benefit your portfolio in the long run.

The top 5 gaming stocks to consider adding to your portfolio in 2024 are:

1. Electronic Arts (NASDAQ: EA);
2. Take-Two Interactive (NASDAQ: TTWO);
3. Microsoft (NASDAQ: MSFT);
4. Nintendo (OTCMKTS: NTDOY); 
5. Sony (NYSE: SONY).

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1. Electronic Arts

Electronic Arts (EA) is a leading game developer that holds numerous popular franchises such as FIFA, Madden NFL, The Sims, and Apex Legends, which continue to dominate their respective genres, signifying positive prospects for the company. In fact, EA expects to make $40 billion from FIFA 23 alone.

The company made $7.59 billion in 2023 and expects its revenue to grow in 2024, which might present a potential opportunity for investors who seek to capitalize on the company’s long-term performance and are willing to assume a certain level of risk until EA discloses more information about its performance.

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2. Take-Two Interactive

Take-Two Interactive stands as another prominent American video game publisher and developer. Established in 1993, the company swiftly rose to prominence within the gaming industry. It boasts an impressive track record, being the driving force behind or the owner of some of the most prosperous video game franchises, such as Rockstar’s Grand Theft Auto and Red Dead Redemption series and 2K Sports’ NBA 2K franchise.

The success of the company can be chalked up to its adeptness in crafting captivating, top-tier gaming experiences that resonate with players worldwide. Grand Theft Auto V alone generated $8 billion in revenue since its release, and seeing that the next title in the series is imminent, Take-Two stock undoubtedly deserves to be on your radar.

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3. Microsoft

Although primarily an information technology company, Microsoft has been a dominant force in the gaming sector thanks to their popular Xbox consoles and a deep lineup of exclusive game titles, including the upcoming Starfield developed by Bethesda exclusively for the Xbox line of consoles. 

The company is also increasingly leveraging artificial intelligence (AI) to enhance gaming experiences for users. For example, Microsoft invested $10 billion in ChatGPT alone, the company’s main AI asset, which is an exceptionally large investment considering that generative AI is technically still in its early days. 

Furthermore, their recent acquisition of game development studios and commitment to cloud gaming services, such as Xbox Game Pass, which generates $4 billion in revenue a year, make Microsoft a promising investment opportunity in the gaming industry.

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4. Nintendo

Nintendo is a legendary brand in the gaming industry, having developed and published franchises such as Mario, The Legend of Zelda, and Pokémon. More importantly, the company has achieved significant success with its handheld-docked hybrid console, the Nintendo Switch, which, despite being six years old, still outsells the current-generation competition as the third most selling gaming platform of all time. 

Although not as technologically aggressive and progressive as its counterparts, Nintendo has the advantage of having a strong brand and loyal consumer base that make it one of the more profitable gaming companies in the world.

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5. Sony

Thanks to its PlayStation consoles and exclusive game titles, such as Bloodborne, Ghost of Tsushima, and Demon’s Souls, Sony is a dominant player in the gaming industry. The company’s robust ecosystem includes hardware, software, and online services, such as the PlayStation Network and PlayStation Now, a cloud gaming service that allows users to stream games on other devices. 

Sony also puts an emphasis on virtual reality through the PlayStation VR headset, offering a well-rounded, modern gaming experience across a number of niches. 

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Understanding video game stocks

The gaming stock market is an exciting sector with a huge potential for growth, and as an investor, you can benefit from its dynamic nature. To better navigate this market and invest confidently and knowledgeably, you have to consider a few factors.

• Firstly, you should understand the revenue streams for gaming companies. These can come from various sources, such as game sales, subscriptions, microtransactions, in-game advertising, and merchandising. When assessing a gaming stock, consider the diversity and reliability of its revenue streams, debt levels, and the company’s ability to innovate and grow and keep up with the demands of the industry;

• Another important aspect to consider is the company’s potential for profit. Healthy profit margins indicate that the company is well-managed, that the team prioritizes long-term gains, and that shareholders have something to look forward to;

• You should also consider the company’s dividend yields. Not all gaming companies offer dividends, so try to prioritize those that do;

• Additionally, consider market trends and upcoming technology. The industry is constantly evolving, with new gaming systems, streaming services, and mobile gaming platforms providing unique opportunities for growth. Stay up-to-date on these developments to maintain a clear perspective when making investment decisions.

Expanding Opportunities in the Gaming Industry

As you keep an eye on the market, it’s crucial to understand emerging trends and how they can impact your investment strategy. For starters, consider that:

• Mobile games are an essential driver of growth in the gaming market, as user engagement and revenues consistently rise. By investing in companies that focus on mobile gaming, you can have a stake in an industry projected to reach $155.4 billion by 2027;

• Esports is another innovative sector in the gaming industry that offers remarkable investment opportunities. Competitions and tournaments have grown in popularity, attracting millions of viewers and driving advertising, sponsorship, and merchandising revenues. By identifying companies that are heavily involved in esports, such as Tencent and Take-Two Interactive, you can capitalize on this rapidly growing segment.

• The advent of cloud computing has revolutionized gaming by enabling players to access high-quality games without the need for expensive hardware. Companies utilizing cloud platforms to deliver gaming services, such as Sony, are better positioned to benefit from the increasing global adoption of cloud-based technologies. 

• Artificial intelligence has become an integral part of the gaming experience, creating highly immersive and personalized experiences for users. In fact, there have been a lot of discussions floating around about how AI-generated questlines and NPC dialogues could improve the immersiveness of role-playing titles. Naturally, companies that leverage AI to improve game design have a competitive edge; 

• Thanks to virtual reality (VR) advancements, users can experience gaming in a whole new light and immerse themselves entirely in new digital realms. Consequently, companies that focus on developing VR technologies could become powerful players in this nascent market.

Risks and challenges involved with gaming stocks

In addition to the advantages listed above, it is essential to be aware of the various risks and challenges that could impact the industry’s growth in order to avoid some of the most common investing mistakes. Some potential risks and challenges to consider when investing in gaming stocks are:

• Market competition: The gaming industry is highly competitive, with new companies and gameplay innovations continually driving change. To identify companies with a competitive edge, pay attention to factors like platform diversity, partnerships with other leading companies, player sentiment, etc.;
• Legal issues: Changes in legislation and regulations could affect the gaming industry. More importantly, however, you should pay attention to all news pertaining to the leadership board of the company you are investing in. For example, when the Blizzard sexual harassment charges started coming in, the company’s stock dropped by 6% in a day;
• Technological advancements: The gaming industry relies heavily on technology. Therefore, investments in research and development are crucial. Companies that fail to keep up with technological advancements, such as VR or cloud gaming, may struggle to maintain their market share;
• Consumer Trends and Preferences: The preferences of gamers evolve continuously, and companies should adapt accordingly to remain competitive. Keep an eye on new game genres, newly releasing platforms, and business models that are trending to better estimate a company’s potential success.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about the top 5 gaming stocks to buy in 2024

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• Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.

• 0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

• Copy top-performing traders in real time, automatically.

• eToro USA is registered with FINRA for securities trading.

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eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.