With the digital games market set to reach US$160 billion by 2022, now may be the time more than ever for investors to jump into the sector.
Digital games have evolved in the last two decades with the introduction of new consoles and handheld devices. With more people adopting these devices, this market is set to reach new heights.
According to Juniper Research, the digital games market will reach US$160 billion by 2022, up from US$117 million in 2018, mostly driven by loot boxes and in-game spends.
The firm forecasts that the market will be boosted by the increasing prevalence of loot boxes, which are purchasable in-game packs, a practice that has proved to be popular in China. The loot boxes contain a random selection of items which monetises users in-game.
“Loot boxes play upon the gamers’ desire to have the most prestigious and sought-after in-game items, whether these be weapons or cosmetic goods,” Lauren Foye, research author said in the report. “By monetising the random generation of items, developers are effectively encouraging a form of in-game gambling, extending both the lifecycle and engagement of games titles to their audience.”
The report further notes that advertising will play a greater role in monetising consumers who avoid paying into popular free titles as t ad spending is tipped to reach $20 billion by 2022.
A separate report from IDC shows that smartphone and tablet gaming market revenue will cross $100 billion mark in 2021.
“Within this gigantic market, however, there are several swirling opportunities and threats that must be carefully weighed and navigated by developers, publishers, and other ecosystem suppliers seeking to maximize their share of this expanding pie,” Lewis Ward, research director, IDC’s Gaming and VR/AR Services said in the report.
On that note, here the Investing News Network (INN) is providing an overview of digital games stocks for investor consideration. With the industry set to grow by billions and billions of dollars, the time maybe now more than ever for the investors to go all in.
The stocks below all have market caps of less than $1billion and are listed in a alphabetical order. All numbers and figures are current as of market close on June 4, 2018.
1. Changyou.com (NASDAQ:CYOU)
Share price: US$18.71; market cap: US$986.36 million
Changyou.com is a developer and operator of online games in China and has been engaging in the development, operation and licensing of diverse range of online games. The company’s flagship PC game TLBB has a user base of 300 million.
TLBB is a Chinese martial arts game that was initially launched in 2007 with the highlight of the game being that it lets players pick their own destiny and play the game in any way they decide. Some of the other games under their brand include Blade Wars, Shadowbane, a title that they acquired in 2012 and Zentia.
2. GigaMedia (NASDAQ:GIGM)
Share price: US$3.14; market cap: US$34.70 million
The company with its headquarters in Taipei, Taiwan GigaMedia’s digital service business develops and operates a suite of digital entertainments in Taiwan and Hong Kong with focus on browser/mobile games and casual games.
Some of the popular games under their brand include Everest Poker, a multilingual online poker game and AkaSeka which is a Japanese folklore based mobile game targeted towards females.
3. Glu Mobile (NASDAQ:GLUU)
Share price: US$5.87; market cap: US$819.81 million
Glu Mobile is a leading creator of mobile games with its portfolio includes titles like Cooking Dash, Kim Kardarshian: Hollywood and MLB Tap Sports Baseball.
In late March, the company announced the 2018 version of MLB Tap Sports Baseball which lets players to strategically manage their own baseball teams.
4. Gravity (NASDAQ:GRVY)
Share price: US$74.81; market cap: US$259.92 million
Based in Korea, Gravity is a developer and publisher of online and mobile games. The company’s flagship game is Ragnaork Online which is available commercially in 81 markets and countries.
Launched in 2002, Ragnaork is heavily based on Norse mythology with references to other cultures as well with the gamers hunting monsters and take on various quests.
5. Millennial Esports (TSXV:GAME)
Share price: C$0.165; market cap: C$23.85 million
The company is a integrated mobile gaming publisher leading a revolution to fuse Esports Racing and professional motorsport through a global competition model. Millennial Esports is utilizing its gaming franchises and IP to engage millions of new players. Through its platform, the company has established relationships with F1 and Indycar.
In late May, the company said that its global competition model has been generating strong interest. Through its platform, gamers around the world compete in a simulated events with the winners of the virtual competition advancing to further rounds.
6. Rovio Entertainment (HEL:ROVIO)
Share price: Euro5.57; market cap: Euro442.34 million
Best known for the Angry Birds brand, which redefined mobile games in 2009, Rovio Entertainment is a Finnish, games-first entertainment company that creates, develops and publishes mobile games.
The company in late May revealed new premier licensing program for the Angry Bird Franchise in North America. The company is said to have united a diverse array of retail product manufacturers and categories, representing a next step forward for the brand.
7. Tangelo Games (TSXV:GEL)
Share price: C$0.02; market cap: C$3.69 million
Tangelo Games is a developer of social and mobile gaming for desktop, iOS and Android platforms. The company is known for various card games including Draw Poker, BlackJack and has games across different genres.
The company designs, develops and distributes its top ranked casino-themed games within online social networks (such as Facebook) apart from mobile platforms such as iOS and Android.
8. The9 (NASDAQ:NCTY)
Share price: US$1.06; market cap: US$8.19 million
The9 is an internet company based in China and develops and operates its proprietary mobile games and web games including the CrossFire New Mobile Games, Audition mobile, Knight Forever and Q Jiang San Guo.
Which digital games company interests you? Let us know in the comments!
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Some of the data for this article was pulled using FinViz’s stock screener and TSX.com
Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Millennial Esports is a client of the Investing News Network. This article is not paid for content.