{"id":202575,"date":"2020-12-08T16:34:12","date_gmt":"2020-12-08T21:34:12","guid":{"rendered":"https:\/\/stockchase.com\/discover\/?p=202575"},"modified":"2022-10-26T09:54:10","modified_gmt":"2022-10-26T13:54:10","slug":"gaming-stocks-for-the-win","status":"publish","type":"post","link":"https:\/\/stockchase.com\/discover\/gaming-stocks-for-the-win\/","title":{"rendered":"4 More Alluring Gaming Stocks for the Win"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Discover What&#039;s Inside<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/stockchase.com\/discover\/gaming-stocks-for-the-win\/#Gaming_Stocks\" >Gaming Stocks<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/stockchase.com\/discover\/gaming-stocks-for-the-win\/#Nintendo_NTDOY-OTC\" >Nintendo (NTDOY-OTC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/stockchase.com\/discover\/gaming-stocks-for-the-win\/#Take-Two_Interactive_Softwar_TTWO-Q\" >Take-Two Interactive Softwar (TTWO-Q)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/stockchase.com\/discover\/gaming-stocks-for-the-win\/#Tencent_Holdings_Ltd_TCEHY-OTC\" >Tencent Holdings Ltd (TCEHY-OTC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/stockchase.com\/discover\/gaming-stocks-for-the-win\/#VanEck_Vectors_Video_Gaming_and_eSports_ETF_ESPO-Q\" >VanEck Vectors Video Gaming and eSports ETF (ESPO-Q)<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Gaming_Stocks\"><\/span>Gaming Stocks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>We&#8217;re extending last week&#8217;s coverage of video games to look at a few more gaming stocks, but also at a couple of chipmakers, who are essential to the industry. Unfortunately, the rising number of Covid cases continues to drive these stay-at-home plays and will continue this winter. Many gaming stocks are approaching 52-week highs, but I expect a little more upside due to the current holiday shopping season and the upcoming releases of the PlayStation 5 and Xbox Series X\/S. Actually, these demand for these new systems helped lead to a surprising <u><a href=\"https:\/\/gamedaily.biz\/article\/1937\/report-digital-game-sales-for-black-friday-and-cyber-monday-dropped-by-10-in-2020-superdata\" target=\"_blank\" rel=\"noopener\">13% decline in console spending<\/a><\/u> over the recent Black Friday weekend, usually a boom time for games. The upside is that gamers are <u><a href=\"https:\/\/www.gamesradar.com\/where-to-buy-ps5-stock-updates\/\" target=\"_blank\" rel=\"noopener\"> snapping these units off the shelves<\/a><\/u>, demonstrating that demand is rabid.<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-202610\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/12\/7974-TYO-1-760x254.png\" alt=\"Nintendo Stock\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Nintendo_NTDOY-OTC\"><\/span><a href=\"https:\/\/stockchase.com\/NTDOY-OTC\">Nintendo (NTDOY-OTC)<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"NTDOY-OTC stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/NTDOY-OTC\/chart?labels=tru\" width=\"125\" align=\"right\" \/> In fact, sales of the <u><a href=\"https:\/\/www.businesswire.com\/news\/home\/20201112006127\/en\/Nintendo-Switch-Achieves-Its-Best-October-Sales-to-Date\" target=\"_blank\" rel=\"noopener\">Nintendo Switch console soared 136% YOY in October<\/a><\/u>, making the Switch the second-biggest seller in any October. Looking ahead, the company that gave the world Mario and <i>Donkey Kong <\/i> will release the <u><a href=\"https:\/\/www.tomsguide.com\/news\/nintendo-switch-2\" target=\"_blank\" rel=\"noopener\">Nintendo Switch 2<\/a><\/u> in early 2021. Specs and pricing are to come, but if the gaming blogs are any barometer, customer interest is high. For either console, there is a large, popular library of game titles to draw from.<\/p>\n<p>This year, <a href=\"https:\/\/stockchase.com\/NTDOY-OTC\">Nintendo<\/a> has released 20 games that have sold over one million copies. <i>New Horizons <\/i>has sold more than 14 million to date, and <i>Super Mario 3D over 5 million. <\/i>The average Switch player owns seven games, which is where the profits lie. Note that given lockdowns, digital sales online have soared 139% YOY, which boosted profits 244% in the first half of this fiscal year. With stores closed, <a href=\"https:\/\/www.cnbc.com\/2020\/11\/05\/nintendo-raises-switch-forecast-on-pandemic-gaming-boom.html\" target=\"_blank\" rel=\"noopener\">Nintendo has raised its forecasts<\/a> in console sales from 19 to 24 million and operating profit by 50%.<\/p>\n<p>Trading on the Nasdaq, NTDOY stock pays a 2.81% dividend yield and trades at a 17x PE, compared to 27x a year ago. <a href=\"https:\/\/stockchase.com\/ATVI-Q\">Activision Blizzard<\/a> pays only 0.51% and trades at nearly 24x. The Home of Mario does face competition from the PS 5 and the Xbox, but these are nothing new. As of this writing, NTDOY stock is trading $4 below its 52-week high, and it&#8217;s reasonable to predict that it will break that level this winter. Game on.<\/p>\n<p><a href=\"https:\/\/stockchase.com\/TTWO-Q\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-202613\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/12\/TTWO-Q-1-760x254.png\" alt=\"Take-Two Interactive Softwar Stock\" width=\"860\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Take-Two_Interactive_Softwar_TTWO-Q\"><\/span>Take-Two Interactive Softwar (TTWO-Q)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"TTWO-Q stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/TTWO-Q\/chart?labels=tru\" width=\"125\" align=\"right\" \/> Next up is <a href=\"https:\/\/stockchase.com\/TTWO-Q\">TTWO<\/a>\u00a0stock. Their games include the massive hit, <i>Grand Theft Auto, NBA 2K <\/i>and <i>WWE 2K. <\/i>In fiscal 2020 YOY, TTWO&#8217;s revenue increased 16%. Their recurrent consumer spending, driven by online play, spiked 29%. Again, digital is key, given its wide margins. We can thank Covid lockdowns for that. TTWO&#8217;s total revenues from digital deliveries leapt 41% and made up 77% of its topline for 2020. This led to net income climbing 21% to $404 million for the year.<\/p>\n<p>So, things look rosy looking back. What about the future? Take-Two itself warns that its revenue will flatten and net income to decline 4%, although net bookings could increase 5-9%. Further, TTWO stock trades at a 44x PE, higher than its peers, and doesn&#8217;t pay a divvy. As of this writing, the stock is making a 52-week high of $184, though the entire space is rallying too. This is just $7 shy of its price target. TTWO stock will likely reach that, but I don&#8217;t see much upside here. That high PE gives me pause. If you own this already, take come profits. Otherwise, there are better gaming stocks to play.<\/p>\n<p><a href=\"https:\/\/stockchase.com\/TCEHY-OTC\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-202612\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/12\/TCEHY-OTC-1-760x254.png\" alt=\"Tencent Holdings Ltd Stock\" width=\"860\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Tencent_Holdings_Ltd_TCEHY-OTC\"><\/span>Tencent Holdings Ltd (TCEHY-OTC)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"TCEHY-OTC stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/TCEHY-OTC\/chart?labels=tru\" width=\"125\" align=\"right\" \/> This Chinese tech colossus does many things, including cloud computing, fintech and video games, which accounted for 34% of revenues in Q2. That may not sound like a lot, but consider that <a href=\"https:\/\/stockchase.com\/TCEHY-OTC\">TenCent<\/a>&#8216;s market cap is 35 times larger than Take-Two&#8217;s. Therefore, TenCent is the world&#8217;s biggest publisher of video games, including <i> Honor of Kings<\/i>and <i>Peacekeeper Elite. <\/i><\/p>\n<p>The company also owns large interests in<i> Fortnite <\/i>publisher, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2020-09-17\/tencent-s-game-investments-draw-u-s-national-security-scrutiny\" target=\"_blank\" rel=\"noopener\">Epic Games<\/a>, and <a href=\"https:\/\/www.pcgamer.com\/every-game-company-that-tencent-has-invested-in\/\" target=\"_blank\" rel=\"noopener\">varying interests<\/a> in PUBG publisher Krafton, <a href=\"https:\/\/stockchase.com\/ATVI-Q\">Activision Blizzard<\/a>, and Ubisoft. Covid has driven Tencent&#8217;s online gaming revenue, which soared 40% YOY last quarter as more users in China and abroad played games on their smartphones.<\/p>\n<p>TenCent&#8217;s other businesses have also been firing on all cylinders, and a major headwind\u2014Trump&#8217;s trade war\u2014has now vanished. TCEHY stock pays only a 0.2% dividend and trades at a high 56x PE. Well, that&#8217;s high by video game standards, but minute compared to <a href=\"https:\/\/stockchase.com\/AMZN-Q\">Amazon<\/a>&#8216;s 92x. Then again, <a href=\"https:\/\/stockchase.com\/MSFT-Q\">Microsoft<\/a>\u2014which owns a small interest in games\u2014trades at 34x, and TenCent&#8217;s own PE a year ago stood at 37.44x. TCEHY stock is trading less than US$6 below its 52-week high of $81.35.<\/p>\n<p>However, the <u><a href=\"https:\/\/www.aljazeera.com\/economy\/2020\/11\/13\/china-is-clamping-down-on-its-tech-companies-heres-what-we-know\" target=\"_blank\" rel=\"noopener\">Chinese government&#8217;s recent threat to break up China&#8217;s tech giants<\/a><\/u>casts a shadow over TenCent. This and the recent run-up make TCEHY a stock to watch.<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-202611\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/12\/ESPO-Q-1-760x254.png\" alt=\"VanEck Vectors Video Gaming and eSports ETF Stock\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"VanEck_Vectors_Video_Gaming_and_eSports_ETF_ESPO-Q\"><\/span>VanEck Vectors Video Gaming and eSports ETF (ESPO-Q)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Player four on this list is intended for ETF investors who want to play this sector, but can&#8217;t decide on a single stock. Top holdings are (in this order): <a href=\"https:\/\/stockchase.com\/TCEHY-OTC\">TenCent<\/a>, <a href=\"https:\/\/stockchase.com\/NVDA-Q\">NVIDIA<\/a>, <a href=\"https:\/\/stockchase.com\/AMD-Q\">AMD<\/a>, <a href=\"https:\/\/stockchase.com\/SE-N\">Sea Ltd<\/a>. and <a href=\"https:\/\/stockchase.com\/NTDOY-OTC\">Nintendo<\/a> with <a href=\"https:\/\/stockchase.com\/ATVI-Q\">Activision<\/a> and <a href=\"https:\/\/stockchase.com\/TTWO-Q\">Take-Two<\/a> further down the list.<\/p>\n<p>Be aware that the ESPO ETF pays only a 0.13% dividend and the MER charges 0.55%. Also consider that ESPO ETF is currently trading at all-time highs around $68. YTD, this ETF has popped 73%. Can it rise more? I think so, but it&#8217;s moved $9 in the past month and may be running ahead of itself. Wait for a pullback.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gaming Stocks We&#8217;re extending last week&#8217;s coverage of video games to look at a few more gaming stocks, but also at a couple of chipmakers, who are essential to the industry. Unfortunately, the rising number of Covid cases continues to [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":201569,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cwp_meta_box_check":"No","cwp_rev_product_name":"","cwp_rev_product_image":"","wppr_links":[],"cwp_rev_price":"","wppr_options":[],"wppr_pros":[],"wppr_cons":[],"footnotes":""},"categories":[9],"tags":[],"class_list":["post-202575","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-top"],"wppr_data":{"cwp_meta_box_check":"No"},"_links":{"self":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/202575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/comments?post=202575"}],"version-history":[{"count":0,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/202575\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media\/201569"}],"wp:attachment":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media?parent=202575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/categories?post=202575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/tags?post=202575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}