The video game industry is involved in the development, marketing and sale of hardware and software, fueled by advances in technology, high-speed connectivity, and customized gadgets. Some of the top companies in the industry today include Sony Corp. (SNE) and Activision Blizzard, Inc. (ATVI). Over the 12-month trailing period, the video game industry as represented by the VanEck Vectors Video Gaming and eSports ETF (ESPO) has surpassed the market with gains of 40.7%, as compared with the S&P 500, which has grown by 27.2%. All figures are as of January 14, 2020.
Below, we'll examine the top three stocks in the video game industry for best value, fastest earnings growth, and most momentum.
Best Value Video Game Stocks
Here are the video game stocks in the S&P 500 with the lowest 12-month trailing price-to-earnings (P/E) ratio in the sector. 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|
|Changyou.com Ltd. (CYOU)||10.42||0.2||5.72|
|SciPlay Corp. (SCPL)||12.51||0.3||6.0|
|Electronic Arts Inc. (EA)||109.58||32.0||12.0|
- Changyou.com Ltd.: Chinese video game developer Changyou.com is known for its massively multiplayer online role-playing games (MMORPGs), including Tian Long Ba Bu.
- SciPlay Corp.: SciPlay is known for creating video games for mobile and web platforms, with titles including Jackpot Party Casino and Monopoly Slots. In Q3 2019, SciPlay saw 11% revenue growth year-over-year (YOY).
- Electronic Arts Inc.: Electronic Arts is an established video game company that develops and markets games for a variety of platforms, including consoles, handheld players, computers, and mobile devices. The company's recent release, "Star Wars Jedi: Fallen Order," became the fastest-selling digital launch for a Star Wars game within two weeks.
Fastest Growing Video Game Stocks
Here are the video game stocks in the S&P 500 with the highest year-over-year 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 (%)|
|Zynga Inc. (ZNGA)||6.77||6.4||2,300.0|
|Electronic Arts Inc. (EA)||109.58||32.0||248.2|
|Take-Two Interactive Software Inc. (TTWO)||126.93||14.4||186.4|
- Zynga Inc.: Specializing in online social games, Zynga is best known for titles like FarmVille and Words With Friends. Last quarter, Zynga's operating cash flow climbed to $69 million, an increase of 67% YOY.
- Electronic Arts, Inc.: See company description above.
- Take-Two Interactive Software, Inc.: Founded in 1993, Take-Two Interactive Software builds and markets entertainment products under the labels of Rockstar Games and 2K. Rockstar Games include popular games like the Grand Theft Auto, Max Payne, Midnight Club, and Red Dead franchises.
Video Game Stocks with the Most Momentum
These are the video game stocks in the S&P 500 that had the greatest price increase over the past 12 months.
|Video Games With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Price Change (%)|
|Zynga Inc. (ZNGA)||6.77||6.4||59.7|
|Activision Blizzard Inc. (ATVI)||60.05||46.1||27.0|
|Electronic Arts Inc. (EA)||109.58||32.0||23.7|
|VanEck Vectors Video Gaming and eSports ETF (ESPO)||N/A||N/A||40.7|
|S&P 500 (SPY)||N/A||N/A||27.2|
- Zynga Inc.: See company description above.
- Activision Blizzard Inc.: Activision Blizzard is one of the best-known American video game companies today, with franchises including Call of Duty, Guitar Hero, and World of Warcraft. In late 2019, the company launched King's Council, a player research community made up of top Activision Blizzard players.
- Electronic Arts Inc.: See company description above.
SciPlay Corp. "SciPlay Q3 2019 Earning Presentation," Page 4. Accessed Jan. 14, 2020.
Electronic Arts, Inc. "The Force Is Strong With Star Wars Jedi: Fallen Order," Accessed Jan. 14, 2020.
Zynga, Inc. "Zynga Announces Third Quarter 2019 Financial Results," Accessed Jan. 14, 2020.
Activision Blizzard, Inc. "Activision Blizzard Media Launches King’s Council, Its First Dedicated Player Research Community," Accessed Jan. 14, 2020.