This opportunity for investors is bigger than movies and music combined
IIt’s tempting to think of the video game industry as a small niche targeting only a select portion of the population. However, the global video game industry represents a market of nearly $ 200 billion, overtaking traditional entertainment venues like movies and music.
In this clip from Backstage Pass, recorded on September 13, Motley Fool’s Sanmeet Deo, Clay Bruning and Jon Quast give investors insight into this important industry, including the fastest growing market segment.
10 stocks we prefer over DraftKings Inc.
When our award-winning team of analysts have stock advice, it can pay off to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Equity Advisor, has tripled the market. *
They just revealed what they think are the top ten stocks investors can buy right now… and DraftKings Inc. was not one of them! That’s right – they think these 10 stocks are even better buys.
See the 10 actions
* The portfolio advisor returns on September 17, 2021
Deo Sanmeet: The total global games market, how are these video games played? It essentially breaks down between mobile, PC and consoles. Mobile is the fastest growing and strongest segment of the industry, your tablet gaming, your smartphone games, and it accounts for nearly 52% of projected $ 180 billion gaming revenue for 2021. This is according to Newzoo. PCs cost around $ 36 billion, 20%, then consoles around 28%, things like Xbox and PlayStation and all that other stuff.
Mobile is really where the fastest growing segment of the business is and that makes a lot of sense. Our phones are basically a gaming device in our hands and I think I was joking with Clay is that I don’t know if this is included in these mobile games as well, but I had a fantasy DraftKings game this weekend just for fun yesterday actually and just did some fantastic lineup and participated in that. I wanted to try it out and see how it went. It was quite fun. I won like $ 10. It was cool. That, too, is almost as if you can imagine different areas that are essentially gamified.
Clay burnishing: Yeah, I think that’s another thing to consider that there is in there, not just on sports betting, but on the game as a whole, you also have this whole segment called simulated games. . But it’s the same as gambling except instead of trying to make money, for example, you put in $ 50, you know $ 50 can’t win you anything else but you play because that you like playing the game and having that adrenaline rush without having any real money in it. It will be interesting to see if there is more expansion in terms of simulated games, whether with these companies from games or some of those game companies which we will also talk about a little further on.
Deo: Yes, and like what Jon asked earlier, video games are more important than the direct revenue we talked about. Accent estimates that direct and indirect video game revenues will reach nearly $ 300 billion.
Now, indirect income is things like video game content, e-sports, accessories, hardware, mobile devices. Additionally, like anything peripheral to gaming and the game itself, for example, the chips that go into virtually everything that powers these PCs and mobiles and devices, it can also be an indirect beneficiary of revenue. . Indirect income is basically anything that benefits from this basic direct income from the game.
This is a brief overview of the industry itself and just a few quick notes on the industry that I have encountered. You know that in 2020, the U.S. video game industry grew by around 27% to nearly $ 57 billion in revenue, which exceeded movies and music combined, according to NPD Group. It’s a big company that is growing, expanding, encompassing almost more than the traditional game mode and what the game is. I have a feeling there is going to be a blur between what is. of the game and what isn’t, especially when we started to delve into this realm of the metaverse.
This is an overview of the industry. Not sure if you have any ideas about the industry based on what you have researched before, what have you seen from your experience?
Jon Quest: Well I’m just going to say real quick, it’s so tempting and I’m not a gamer anymore, personally, but for me as a foreigner it’s so tempting to think about your Nintendo consoles, your PlayStation consoles, your Xbox consoles like what we talk about with games, but in reality, and I think it was up there and one of those slides, the disproportionate size of the mobile gaming industry is on your smartphone. The size of that compared to traditional consoles, mobile gaming is a very big part of what we’re talking about.
Clay Bruning owns shares of DraftKings Inc. Jon Quast owns shares of Nintendo. Sanmeet Deo has no position in the mentioned stocks. The Motley Fool owns shares and recommends Accenture. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.