Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

Gaming stocks

Investing in video game stocks has recently gained popularity despite the current adverse circumstances, including Covid-19 and the related political and economic instability. It is not surprising that with the ongoing lockdown forcing people to stay home, the video game industry has witnessed a significant performance increase and has consequently registered record sales.

Well then, why should you trade on gaming stocks​? It is becoming an object of interest for those who might want to diversify their portfolio and ride the wave of the technology industry. In this article, we will present an overview of the derivative products offered on our platform and of the different ways to either trade or invest in gaming stocks.

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Video game market

In 2019, the value of the video game market was set at around $150 billion, with forecasts indicating an even sharper growth for the future. As forecasted, this sector is likely to reach $300 billion by 2025.

Mobile videogames have already surpassed the gaming console and PC markets. In the coming years, thanks to increased streaming speed and reliability (supported by 5G technology​), expanding cloud services and mobile game platforms bridging the technology gap with their direct competitors, more and more players will move towards smartphones and other similar devices. This will further expand the market from the $70 billion recorded in 2019 to over $100 billion by 2022.

According to Nathan Meyer, the equity analyst and portfolio manager at Capital Group, the gaming industry represents the fastest growing segment of the global media industry. In fact, video games are becoming a mass phenomenon: the development of streaming and free games has opened up the market to more players than ever before. Nathan Meyer stresses that “it is no longer just about teenagers playing video games in their home, but it is a big business, which attracts multiple types of players, from every age, background and education, as well as investors from all over the world”.

According to the Entertainment Software Association, more than 164 million adults in the United States play video games and spend approximately $43 billion on purchases related to this category of products. China is the market with the fastest expansion rate in the world, with an annual growth rate of about 14%. There are 598 million Chinese players and around 95% of them play on mobile devices, according to a study conducted by research firm Niko Partners.

Investing in video game stocks

Investing in the gaming industry can be an interesting way to diversify your portfolio. We offer four ways to invest in gaming stocks:

  • Spread betting​: a tax-efficient* way of trading on the underlying price movements of video game stocks.
  • CFD trading​: with contracts for difference, you have the opportunity to profit from the rising or falling prices of video game stocks.
  • Gaming share basket​​: share baskets are mini portfolios of stock CFDs that provide exposure to several assets and are chosen by our market analysts.

CFDs and spread betting are leveraged products​ and require you to trade on margin, which is a very risky process and can result in huge capital losses. It is therefore advised that you create an efficient risk management strategy before trading in the share market. With CFDs and spread betting you don’t own the underlying asset, but instead trade on its price movement. Learn about the differences between spread betting vs CFDs​ to find the most suitable option for you.

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Top gaming stocks

Electronic Arts (EA)

Electronic Arts is an American company whose video games essentially cover all genres, including sports, action, strategy, simulation, arcade, role-playing and adventure. The EA portfolio includes worldwide sports-themed hits, such as FIFA Soccer, Madden NFL and NBA Live series. The EA brand includes totally proprietary titles, such as Mass Effect and Dragon Age, as well as games based on famous movie licenses, such as Harry Potter, James Bond, The Godfather, Lord of the Rings and many more. It is a prominent football stock​ for its involvement in the FIFA series, in particular.

IGG (0799)​​

IGG Inc. is a Chinese company with headquarters in Singapore and branches in the United States, China, Canada, Japan, South Korea, Belarus, Thailand, Philippines and Hong Kong. IGG primarily focuses on the development of video games for mobile devices, which in fact represents its biggest product share. IGG’s most popular games are Lords Mobile, Deck Heroes, and GodsWar Online. In 2019, IGG had over 100 million monthly active users.

Zynga (ZNGA)​​

Zynga is a video game development company based in San Francisco, California. It develops video games for internet browsers and social media platforms, such as Facebook. Zynga launched its most famous game, FarmVille, on Facebook in 2009, reaching 10 million daily active users within two months. In 2019, Zynga had 95 million monthly active users and 30 million daily active users.

Huya Live (HUYA)​​

Huya Live is a Chinese company that offers live video streaming services. Its website is one of the largest in China, whereas outside of China, it operates as Nimo TV. Similar to other streaming services, this site primarily focuses on live video game streaming and broadcasts a variety of activities, such as sport competitions, cooking sessions, and “real life” streams.

Take Two Interactive Software (TTWO)​​

Take Two Interactive Software is a New York- based company that manufactures and distributes video games and computer accessories. The company also includes subsidiaries, namely 2K Games, K Sports and Grand Theft V, which is also the best-selling game in the history of the company in the shortest time possible, with $800 million collected on the first day.

Bilibi (BILI)​​

Bilibi is a Chinese video-sharing website centred on animation, comics and games (ACG). In June 2019, it registered 28 million daily active users only in the People’s Republic of China, thus capturing the attention of Sony Corporation. As a result, in April 2020, Sony invested $400 million to secure a 4.98% stake in this Chinese entertainment company. Sony is not the only company to have invested in Bilibili; in fact, even giants such as Tencent and Alibaba have previously invested in the company.

Glu Mobile (EA)

Glu Mobile Inc. is an American company that develops mobile video games for smartphones and tablet devices. The company offers products for multiple platforms such as Amazon, iOS, Android, Google Chrome, and Windows Phone.

Nexon (3659)​​

Nexon is a South Korean/Japanese video game publisher with offices in the United States, Taiwan and Thailand. Nexon specialises in video games for both PCs and mobile devices. At present, the company maintains over 80 titles. Maple History is one of their most successful games and was in fact localised for many different languages and countries, such as Japan, Taiwan, China, Thailand, Vietnam, Singapore, Canada, United States, Europe, and Brazil.

Cheetah Mobile (CMCM)​​

Cheetah Mobile Inc. is a Chinese mobile application development company based in Beijing, China. It has developed some of the most popular apps worldwide and has more than 634 million active users per month. Some of its most popular games are Piano Titles, Piano Titles 2, and Dancing Line.

Tencent (0700)​​

Tencent is a Chinese multinational technology company that owns a number of well-known subsidiaries within the technology and entertainment industries. The company owns a number of gaming subsidiaries, including Tencent Games and WeGame, which offer some of the highest-grossing video games of all time, in terms of revenue. Read more about our Tencent stock​ forecast.

Trade on gaming stocks with CMC Markets

Open a live account with CMC Markets now to start spread betting or trading CFDs on the top video game stocks, including those mentioned above. If you are not yet an expert trader, this will grant you access to a free demo account, where you can practise first with £10,000 virtual funds. Our Gaming share basket also comes with lower holding costs and zero commission fees. However, other charges apply, so please see our platform for more details.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.