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Video games are big business for the companies that produce hit games or the console hardware on which people play those games. But investors can do pretty well for themselves too, if they know where to invest.
Big names like Activision or Electronic Arts, who control huge swaths of the gaming landscape, are obvious choices, but stock is also pretty expensive these days. Stocks in companies like Microsoft, Sony, and Nintendo are worth thinking about as well, although their stocks haven’t been performing quite as well of late. This is partly due to the fact that, while Activision can make games for the consoles produced by those companies, Microsoft and its peers are more limited in where their products can go.
This isn’t to say that publishers are always a safe bet. Studios go out of business pretty frequently, because video games are expensive and time consuming to make, and there are always new titles coming out. This makes smaller publishers and producers a risky bet, but if you know the industry, you might be able to invest really well. Companies like King Digital and Mojang, makers of Candy Crush Saga and Minecraft, respectively, had meteoric rises before they were bought out by Activision and Microsoft.
In light of E3 and lots of big announcements for console gaming, it’s easy to forget about PC gaming, but that would be a mistake. While the biggest gains are probably in the console world, Minecraft was only available on PC and Mac for years before it hit Xbox 360 and other consoles. Keeping an eye on Valve’s Steam platform would be a good idea, since that’s where a lot of independent publishers focus their energy, at least until they get famous enough to move to consoles, which are much more expensive to develop for.