Top Video Game Stocks for Q2 2022

SOHU, NTES, and AVID are top for value, growth, and performance, respectively

The video game industry is involved in the development, marketing, and sale of video game hardware and software. Top companies include Electronic Arts Inc. and Nintendo Co. Ltd. Video game industry sales generally performed well early in the COVID-19 pandemic as business shutdowns and social-distancing measures limited peoples' entertainment options. Because consumers can play video games in the home, they have become a popular option. The big question is whether companies will be able to retain newly minted gamers as people begin seeking entertainment outside the home amid the reopening of the economy.

Video game stocks, represented by the VanEck Video Gaming and eSports ETF (ESPO), soared in the initial phases of the pandemic, rising from mid-March of 2020 through mid-February 2021. But they have underperformed the broader market over the past year. ESPO's total return was -19.7% over the past 12 months versus the Russell 1000's total return of 5.6%. These market performance numbers and all statistics in the tables below are as of March 11, 2022.

Here are the top three video game stocks with the best value, the fastest growth, and the best performance.

Best Value Video Game Stocks

These are the video game stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Video Game Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Sohu.com Ltd. (SOHU) 14.90 0.6 0.6
Nintendo Co. Ltd. (NTDOY) 62.48 58.6 13.9
SciPlay Corp. (SCPL) 12.61 0.3 16.2

Source: YCharts

  • Sohu.com Ltd.: Sohu.com is a China-based mainstream media platform that owns a broad range of web properties offering information, entertainment, and communication. It offers a news app, mobile news portal, online video website, online games platform, and more.
  • Nintendo Co. Ltd.: Nintendo is a Japan-based multinational consumer electronics and video game company. It develops and manufactures portable and console game machines, as well as software, playing cards, and consumer electronics. The company announced in late February that it has agreed to acquire 100% of the outstanding shares of SRD Co. Ltd., a development company that has worked closely with Nintendo for nearly forty years in developing video game software. Financial terms of the transaction, which is expected to close on April 1, 2022, were not disclosed.
  • SciPlay Corp.: SciPlay is a developer and publisher of online games. The company creates social bingo, social casino, and hyper-casual games. Some of its games include Jackpot Party Casino, Bingo Showdown, Monopoly Slots, and Solitaire Pets Adventure. SciPlay announced in early March that it has acquired Alictus, a global developer and publisher of casual mobile games. According to the terms of the deal, SciPlay is acquiring 80% of Alictus for $100 million and will acquire the remaining 20% in equal installments over the next five years. The aggregate total of the installments will range between $0 and $200 million depending on specific revenue and profitability targets being met.

Fastest Growing Video Game Stocks

These are the top video game stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric is susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing Video Game Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
NetEase Inc. (NTES) 79.09 53.1 510.9 27.8
Enthusiast Gaming Holdings Inc. (EGLX) 2.50 0.3 N/A (see company description) 180.9
Sea Ltd. (SE) 91.04 50.8 N/A (see company description) 105.7

Source: YCharts

  • NetEase Inc.: NetEase is a China-based internet technology company. It provides a broad range of online services focused on content, community, communication, and commerce. The company also develops popular mobile and PC games.
  • Enthusiast Gaming Holdings Inc.: Enthusiast Gaming is a Canada-based video game and eSports company. It is focused on developing a social media platform for video game and eSports fans to connect worldwide. Because the company reported negative EPS in the most recent quarter, an EPS growth rate could not be calculated for the above table.
  • Sea Ltd.: Sea is a Singapore-based Internet and mobile platform company. It operates core businesses in digital entertainment, e-commerce, and digital payments and financial services. The company's Garena business is a global online games developer and publisher. Sea announced in early March financial results for Q4 of its 2021 fiscal year (FY), the three-month period ended Dec. 31, 2021. The company's net loss widened to $616.3 million from $524.6 million in the year-ago quarter. Revenue for the quarter rose 105.7% year over year (YOY). Because the company reported negative EPS in the most recent quarter, an EPS growth rate could not be calculated for the above table.

Video Game Stocks With the Best Performance

These are the video game stocks that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at.

Video Game Stocks With the Best Performance
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Avid Technology Inc. (AVID) 27.85 1.2 31.4
Electronic Arts Inc. (EA) 122.33 34.4 -6.4
Nintendo Co. Ltd. (NTDOY) 62.48 58.6 -6.9
Russell 1000 N/A N/A 5.6
VanEck Video Gaming and eSports ETF (ESPO) N/A N/A -19.7

Source: YCharts

  • Avid Technology Inc.: Avid Technology develops software and integrated solutions for video and audio content creation, management, and distribution. Its platform and tools provide content creation solutions for the media and entertainment industry.
  • Electronic Arts Inc.: Electronic Arts is a global digital interactive entertainment company. It develops games, content, and online services for Internet-connected consoles, mobile devices, and PCs. The company announced in late January that it has appointed Chris Suh as its new chief financial officer (CFO). Suh joined Electronic Arts from Microsoft, where he was corporate vice president and CFO of the company's Cloud + AI group.
  • Nintendo Co. Ltd.: See above for company description.

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Article Sources
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  1. YCharts." Financial Data."

  2. Nintendo Co. Ltd. "Notification of the Acquisition of SRD Co., Ltd.," Page 1.

  3. SciPlay Corp. "SCIPLAY CONTINUES EXPANSION INTO FAST GROWING CASUAL MARKET WITH ACQUISITION OF ALICTUS, A LEADING TURKEY-BASED DEVELOPER OF HIT MOBILE GAMES."

  4. Enthusiast Gaming Holdings Inc. "Condensed Consolidated Interim Financial Statements For the Three and Nine Months Ended September 30, 2021," Page 2.

  5. Sea Ltd. "Sea Limited Reports Fourth Quarter and Full Year 2021 Results," Page 6.

  6. Electronic Arts Inc. "Electronic Arts Names Chris Suh as Chief Financial Officer."

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