Can Gaming Companies Keep on Growing? A View From the Stock Market

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Published by Digz 3 weeks ago , last updated 3 weeks ago

I started in getting into stocks and shares about five years ago when I had a bit of disposable cash laying around and the interest rates were rubbish for any savings accounts. I was prompted by some of my family members to take a look at investing some of my disposable cash into some companies and look to get some returns on my investments. If you aren’t involved in this sort of thing and are over 18 seriously start looking at doing some research and investing in some companies, you’ll make some excellent returns but note you may also lose some. Now here’s the right time for the official warning all articles give you when posting things about certain stocks and shares that will be discussed: I do not own any of these company shares (I certainly wish I did now writing about it!) and you can make or lose money on the stock market, it is a risk, so be careful and do your research.

Now that the admin is out of the way I’d like to turn your attention to the might of the gaming industry in our entertainment world. The gaming industry will overtake all forms of entertainment shortly, it’s popularity growing all over the world and some of the prize money offered at gaming tournaments exceed what some physical sports players earn in a year now. You’re probably thinking “I should really devote more time to playing games to win tournaments.” If you’re at that level, congratulations, but most of us are not at a level where we can play at a gaming tournament an earn £50 million in an afternoon!

There is another way that gaming can bring you some wealth, and of course a sense of self-fulfilment by investing into gaming companies all over the world – see it as a “giving back” thing. I’ve chosen five companies and compared their share value from 2014 to the close of play Friday 2nd August 2019. Those companies are Activision, Electronic Arts, Take-Two Interactive, Ubisoft, and Games Workshop. In the comparison I’ve just used the £1 = $1 conversion, I shouldn’t but it makes it easier and I have not included any dividends you may get from companies throughout the years – you can take that as an added bonus. Games Workshop in fact has been listed by many analysts and magazines I read as a healthy “buy” for their shares because of their good share value, strong brand, cash flow and balance, and of course their healthy dividend.

CompanyPrice Per Share End of Apr 2014Value InvestedNo. Of SharesPrice Per Share on 22 Apr 19% ChangeValue Now
Activision Blizzard ($)19.94£1,0005049.02245%£2,451.00
Electronic Arts ($)28.21£1,0003592.89325%£3,251.15
Take-Two ($)20.36£1,00049121.69596%£5,962.81
Ubisoft ($)18.25£1,0005473.24395%£3,954.96
Games Workshop (£)5.60£1,00017846.92835%£8,351.76

Total:£5,000

Total:£23,972


If you don’t know what a dividend is it is where the company gives you some of their profits for how many shares you earn. A company could say for a dividend we are giving to 10 pence per share because of our profits this year, so if you had 1,000 shares you would earn £100 – not bad for just owning the shares huh?! If a company has a dividend you need to look at their profit margin and their dividend cover which should show their profit margin healthily covering any dividend give away plus a little more so the company has money to re-invest back into the business. If a company does not have that cover, you can bet that they may remove the dividend pretty soon or it would rather irresponsible!

If you had invested £1,000 into each of those five companies in 2014 and held the shares until when the share prices were last taken on Friday you would have made approximately £19,000 (probably more because we aren’t including dividends remember). And this is of course if you had just held the number of shares you bought at the time. That investment by the way would require no action from 2014 until todays date, just the initial click of a button to invest. That is a phenomenal return, most share companies of course won’t just give a nominal £1,000 figure, they’ll go with “if you investment £10,000 in each of these companies” but I know a lot of us aren’t made of money and I’m not preaching to a bunch of investment bankers here!

The growth shows how much the gaming industry has shot up in the last decade. Reports from all different analysts and governmental bodies are highlighting gaming as one of the top growth and revenue generating industries within the entertainment sector. Gaming also has shown no signs of slowing down with taking the mobile phone market by storm and continuing to do so as we have Diablo and Call of Duty coming to the mobile market that side will grow and grow. Companies like EA will also be moving to expand into the mobile market and base their further revenue growth on that.

People are always looking for value in their stocks, some people want longevity and that’s how I invest. So what after mobile phones? Well VR will be a staple part in every household in the near future, so these companies that are already giants will be already developing VR games to lead into that market too. The companies shown in the table above are fairly stable and if you look at their charts showing past performance you’ll see them grow and grow, there will of course be some drops along the way, that’s only natural and lately Activision Blizzard has had some negative press with their releases as have EA so some people argue that these shares are currently undervalued.

Do you invest in shares? And most importantly do you invest in gaming company shares, if so tell us about your experiences!

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