With 2010 sales exceeding $18.5 billion, the video game industry is no longer considered a light weight in the entertainment industry. Some video game titles are so popular that their sales eclipse most Hollywood blockbusters. For example, in just 6 short weeks, Call of Duty: Black Ops had sales exceeding $1 billion.

Video games have traditionally been discretionary expenditures, so the recent economic downturn has negatively affected industry sales. But as the economy continues to improves, video game sales should bounce back quite well.

Furthermore, it is fair to say that while video games had once been the exclusive realm of kids and teens, the popularity of casual gaming (as a result of Nintendo's Wii and DS consoles) has caused video games to break through barriers to become entertainment for the whole family; they are even recommended as activity for seniors. With the annoucement of Nintendo's Wii U console and Sony's Playstation Vita portable handheld console at the recent Electronic Entertainment Expo, it is clear that the popularity of video games will continue to grow.

TUTORIAL: Investing 101

How To Invest in Video Games

Unfortunately, there is no ETF that captures the video game industry. Investors looking for a position involving video games will either need to pick a video game retailer (such as Bestbuy or Gamestop), a video game console maker (such as Microsoft (Nasdaq:MSFT), Sony (NYSE:SNE) or Nintendo) or a video game publisher (such as Activision Blizzard (NASDAQ:ATVI) or Electronic Arts).

Here are 5 video game stocks to look into:

Company Role in Industry Market Cap YTD % Return
Take-Two Interactive Software (Nasdaq:TTWO) Video Game Publisher and Developer 1.36B +26.60%
Electronic Arts Inc. (Nasdaq:ERTS) Video Game Publisher and Developer 8.02B +47.99%
Nintendo Co., LTD (OTC:NTDOY) Video Game Console and Software Developer 20.17B -46.27%
Best Buy Co., Inc. (NYSE:BBY) New and Pre-owned Video Game Retailer 9.72B -22.14%
GameStop Corp. (NYSE:GME) New and Pre-owned Video Game Retailer 3.57B +11.92%

Bottom Line

If you believe that the future growth of the video games industry will take your portfolio to the next level, consider taking a look at the 5 stocks mentioned above! (For related reading, see Power Up Your Portfolio With Video Game Stocks)

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