The online gaming industry is looking strong

By: Dylan_Moran

The stock markets are currently more volatile than they have been at any point for years, with some companies, markets, and sectors suffering sharp losses while others have enjoyed rapid increases in their stock prices.

For example, in 2020, after starting at record highs, the S&P 500 dropped over 1,000 points in March and April, before going on a six-month rally. In early September, this rally has been halted with several days of heavy selling.

We’ve seen this in other markets around the world, including major major indices in continental Europe, though the UK’s FTSE 100 has floundered, struggling to keep above the 6,000 point mark after trading above 7,000 for much of 2019 and early 2020.

Tech is dominating

The rally in the S&P 500 has not been an even one though. The index would have remained down and not rallied if it wasn’t for the country’s five biggest tech stocks: Alphabet (Google), Apple, Amazon, Facebook, and Microsoft. Even in January, when the stock market was still strong, these five giants accounted for nearly 20% of the entire S&P 500.

When you look at their share prices, many have had meteoric rises in the last few months. Apple doubled in value from its March lows to the highs of August. It was still more than 60% higher than it started the year.

Gaming also strong

It’s not just these five giants that are enjoying growth though. The gaming industry is also looking very strong. For example, Electronic Arts, which publishes popular video games like FIFA, Madden, Plants vs Zombies, and Apex Legends has seen its share price grow by around 40% from where it was in early 2020.

Japan’s Sony, which is due to release its PlayStation 5 in the coming months has enjoyed a similar fate. The company is expecting to sell 6 million units of the new device by the end of March 2021, which could create as much as $3 billion in revenue. This is around double what Microsoft expects to sell its Xbox Series X.

On top of this, casual games and free-to-play titles have seen explosive growth. When it was released at the end of 2019, Call of Duty: Mobile achieved more than 100 million downloads in the first week after launch.

Building on already strong growth in 2019, mobile game downloads increased by 17% in the first half of 2020. The most popular category was hyper-casual games, which saw downloads increase by 30%.

Online casinos enjoying growth

iGaming companies have also enjoyed strong growth, with sites like casinowinner.com seeing an increase in the number of registered players. In many European countries, online casinos continue to grow, despite the market being mature.

Meanwhile, heavy investment in the United States since mid-2018 is delivering record revenues and user registrations in the few states that have legalised online sports betting and casino games. This trend is expected to grow in the coming years as more states also allow their residents and visitors to place wagers online.

The growing popularity of esports is also helping to grow the iGaming industry as sports betting companies have begun opening betting markets on these digital sports.

By Dylan M.

© 2020 Copyright Dylan M. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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