The video game industry is involved in the development, marketing, and sale of video game hardware and software. Top companies include Electronic Arts Inc. (EA) and Nintendo Co. LTD (NTDOY). The video game industry has performed well during the COVID-19 pandemic as business shutdowns and social-distancing measures have limited peoples' entertainment options. Because video games can be used in the home, they have become a popular option for many consumers.
Video game stocks, represented by the VanEck Vectors Video Gaming and eSports ETF (ESPO), have dramatically outperformed the broader market. ESPO has provided a total return of 74.6% over the past 12 months, well above the Russell 1000's total return of 15.7%, as of September 16, 2020. All statistics in the tables below are as of September 17.
Here are the top 3 video game stocks with the best value, the fastest earnings growth, and the most momentum.
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|
|SciPlay Corp. (SCPL)||14.69||1.9||14.5|
|Electronic Arts Inc. (EA)||126.74||36.6||18.8|
|Nintendo Co. Ltd. (NTDOY)||71.44||68.1||21.1|
- SciPlay Corp.: SciPlay designs and publishes video games for mobile and web platforms, with titles including Jackpot Party Casino and Monopoly Slots. The company reported net income growth of 86.3% in Q2 2020, which ended June 30, 2020. Revenue grew 40.2% to a record $165.6 million. CEO Joshua Wilson attributed some of the quarter's success to the "stay at home" dynamic.
- Electronic Arts Inc.: Electronic Arts is best known as a video game company. The company develops, publishes, and markets video game software for consoles, personal computers, mobile phones, and tablets.
- Nintendo Co. Ltd.: Nintendo is a Japan-based multinational consumer electronics and video game company. It develops and manufactures portable and console game machines and software, playing cards, and consumer electronics. Its game consoles include Nintendo Wii, Nintendo DS, Nintendo 3DS, and others. The company reported a more than six-fold gain in profit on net sales growth of 108.1% for the quarterly period ended June 30, 2020.
Fastest Growing Video Game Stocks
These are the video game stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Video Game Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Nintendo Co. Ltd. (NTDOY)||71.44||68.1||555.0|
|Take-Two Interactive Software Inc. (TTWO)||157.07||18.0||87.8|
|SciPlay Corp. (SCPL)||14.69||1.9||75.3|
- Nintendo Co. Ltd.: See above for company description.
- Take-Two Interactive Software Inc.: Take-Two Interactive Software develops, produces, and markets interactive software including video games and related accessories. The company creates video games for consoles, handheld systems, personal computers, smart phones, and tablets. Take-Two Interactive reported net income growth of 91.2% on net revenue growth of 53.8% in Q1 FY 2021, which ended June 30, 2020. The company said it continued to see increased levels of engagement with more people staying at home due to the COVID-19 pandemic.
- SciPlay Corp.: See above for company description.
Video Game Stocks with the Most Momentum
These are the video game stocks that had the highest total return over the last 12 months.
|Video Game Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Sea Ltd. (SE)||147.58||72.0||377.3|
|Bilibili Inc. (BILI)||44.15||15.3||194.3|
|Nintendo Co. Ltd. (NTDOY)||71.44||68.1||53.2|
|VanEck Vectors Video Gaming and eSports ETF (ESPO)||N/A||N/A||74.6|
- Sea Ltd.: Sea is an internet and mobile platform company. It provides online gaming services, manages third-party online marketplaces, and provides various financial services, such as e-wallet and payments services. Sea reported a net loss of $393.5 million in Q2 2020 ended June 30, 2020, compared to a net loss of $280.1 million in the year-ago quarter. Revenue growth of 102.2% for the quarter was offset by soaring operating costs and a 82.1% rise in income tax expense.
- Bilibili Inc.: Bilibili is a China-based provider of online entertainment services. The company offers a platform offering videos, live broadcasting, mobile games, animation, and comics. Bilibili recently announced that it has entered into a three-year strategic partnership with Riot Games, developer of the leading multiplayer online battle arena (MOBA) game League of Legends. The partnership gives Bilibili the rights to live broadcast the League of Legend Esports global events.
- Nintendo Co. Ltd.: See above for company description.
The Washington Post. "The giants of the video game industry have thrived in the pandemic. Can the success continue?" Accessed Sep. 18, 2020.
YCharts. "Financial Data." Accessed Sep. 17, 2020.
SciPlay Corp. "SciPlay Reports RecordResults for the SecondQuarter 2020," Page 1. Accessed Sep. 19, 2020.
Nintendo Co. Ltd. "Consolidated Results for the Three Months Ended June 30, 2019 and 2020," Page 5. Accessed Sep. 19, 2020.
Take-Two Interactive Software Inc. "Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal First Quarter 2021." Accessed Sep. 19, 2020.
Sea Ltd. "Sea Limited Reports Second Quarter 2020 Results," Page 5. Accessed Sep. 19, 2020.
Bilibili Inc. "Bilibili Announces Three-Year Strategic Partnership with Riot Games for Live Broadcasting League of Legend Events in China." Accessed Sep. 19, 2020.