In this article, we will look at the 10 Best Video Game Stocks to Buy Now.
Overview of the Gaming Industry
The video game industry boomed between 2019 and 2021 due to the social distancing effects of the COVID-19 pandemic, which forced people to find new entertainment platforms. According to the US International Trade Administration, there were around 2.7 billion gamers worldwide in 2020, and around 75% of all US households had at least one gamer.
According to Grand View Research, the global video game market was estimated to be around $217.06 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 13.4% between 2023 and 2030. The growth of this market is attributed to the emergence of high bandwidth network connectivity, the ongoing trend of online gaming, and the continuing demand for 3D gaming.
Furthermore, a continual upsurge in the penetration of smartphones is making video games more accessible, social, and portable. The development of more powerful and technologically advanced smartphones has further supported the ongoing expansion of the video game industry. To support this momentum, key market players are developing advanced gaming services and products to expand the customer base, which is having positive overall effects on the industry.
According to the “United States Gaming: Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2019-2029” report released by ResearchAndMarket, a study by ESA found that the US had over 227 million video game players in 2024. Around 80% of the players were over 18 years of age, while 76% of American children under 18 were players. 74% of households had at least one video game player. During the pandemic, 71% of parents agreed that video games proved to be a much-needed break for their children. Similarly, 66% of parents believed that the transition to distance learning was made easier and more accessible by video games.
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Mobile Gaming to Dominate the Market
Smartphones have become a primary medium in the video gaming industry. According to the report, 57% of individuals used smartphones to play games in 2024. 42% used personal computers, while 46% employed consoles. In addition, 29% spent around 1 to 3 hours per week on the activity, while 77% spent more than 3 hours a week. 51% of individuals spent more than 7 hours playing video games in the US in 2024.
Experts anticipate the mobile gaming segment to continue dominating the market in the future as the most favored form of gaming in the US, surpassing both PC gaming and console gaming. The growing demand for mobile gaming stems from a number of technological improvements and advancements, including AR, VR, 5G, and cloud gaming. Other dominant trends in the market include the rise of the hyper-casual game genre.
With these trends in view, let’s look at the 10 best video game stocks to buy now.
A computer technician working on a video game console with a gaming headset.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 20 video game stocks. We then selected the top 10 most popular stocks among elite hedge funds as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Video Game Stocks to Buy Now
10. Playtika Holding Corp. (NASDAQ:PLTK)
Number of Hedge Fund Holders: 32
Playtika Holding Corp. (NASDAQ:PLTK) is a developer of mobile games that owns and manages around 15 games. Its Playtika Boost Platform offers a proprietary technology that supports a portfolio of games and live game operations services. The company’s offerings include casual games, casino-themed games, and free-to-play mobile games. Its game portfolio includes Slotomania, Bingo Blitz, House of Fun, Caesars Slots, World Series of Poker, Best Fiends, June’s Journey, Solitaire Grand Harvest, and Board Kings. These games are available on Google Play Store and iOS App Store.
On November 20, Playtika Holding Corp. (NASDAQ:PLTK) completed the acquisition of SuperPlay, an Israel-based mobile gaming company that owns popular games Domino Dreams and Dice Dreams. This acquisition has significantly strengthened the company’s portfolio, expanding it through Domino Dreams, Dice Dreams, and two additional games under development. Analysts anticipate this portfolio expansion to be a significant growth driver for the company.
Apart from this acquisition, the company’s DTC business is showing strong performance, reflecting the potential for ongoing growth through increased engagement with its long-term users. DTC platforms revenue grew by 0.4% sequentially to $174.4 million and 8.3% year-over-year. As of September 30, 2024, the company has cash, cash equivalents, and short-term investments of $1.2 billion. Playtika Holding Corp.’s (NASDAQ:PLTK) CEO and President Craig Abrahams said that the company plans to remain highly financially disciplined and execute its capital allocation strategy while maintaining a strong financial foundation in the future.
9. NetEase, Inc. (NASDAQ:NTES)
Number of Hedge Fund Holders: 38
NetEase, Inc. (NASDAQ:NTES) is an internet technology company developing and operating some of China’s most famous mobile and PC-client games. It also operates popular international online games in China through partnerships with global game developers such as Blizzard Entertainment. Its Online Game Services segment produces online PC-client games.
The company reported $3.66 billion in revenue in fiscal Q4 2024, just short of analysts’ consensus estimates of $3.72 billion. However, its adjusted earnings per share surpassed expectations, reaching $2.07 compared to the expected $1.73. NetEase, Inc.’s (NASDAQ:NTES) net income also showed positive performance, reaching $1.3 billion and reflecting a 44.4% increase compared to the past year.
NetEase, Inc.’s (NASDAQ:NTES) gaming segment is a significant force behind its success, with its revenue showing a 1.5% year-over-year increase to $2.9 billion in fiscal Q4 2024. The exceptional performance of the company’s titles, such as Marvel Rivals, supported this growth with increased player interest. The company has redirected its attention to international expansion over the past years, endeavoring to capture market share in regions like Taiwan, Japan, and Hong Kong. It is also focusing on diversification, increasing investments in its educational services and cloud music. Analysts are bullish on the stock due to the potential of such strategies supported by NetEase, Inc.’s (NASDAQ:NTES) growing innovation and solid technological infrastructure.
Polen Emerging Markets Growth Strategy stated the following regarding NetEase, Inc. (NASDAQ:NTES) in its first quarter 2024 investor letter:
“NetEase, Inc. (NASDAQ:NTES) is one of the top players in China’s video game industry and saw decent revenue growth in 2023, particularly in its games division, with profit growth close to 20%. The stock also continues to recover after gaming restrictions announced last quarter in China were not nearly as bad as first feared.”
8. Boyd Gaming Corporation (NYSE:BYD)
Number of Hedge Fund Holders: 40
Boyd Gaming Corporation (NYSE:BYD) is a multi-jurisdictional gaming company that manages and operates gaming and entertainment properties. Its operations are divided into the following segments: Las Vegas Locals, Downtown Las Vegas, Midwest and South, and Online.
The company delivered a strong year performance due to its diversified business model, continued operating efficiencies, and recent property investments. It reported $3.9 billion in revenues in 2024, setting a full-year record. Its company-wide EBITDA reached nearly $1.4 billion while maintaining property-level operating margins of over 40%. These results reflect Boyd Gaming Corporation’s (NYSE:BYD) continued ability to deliver high performance. Its fiscal Q4 2024 revenue also surpassed the $1 billion mark for the first time, while EBITDAR increased to nearly $380 million.
The company is continually seeing strength throughout its property operating segments and increased strength in play from its core customers. Furthermore, Boyd Gaming Corporation (NYSE:BYD) is experiencing stable trends in play from its retail customers, ranking it eighth on our list of the 10 best video game stocks to buy now. Its median price target of $76.67 implies an upside of 8.91% from current levels.
7. Electronic Arts Inc. (NASDAQ:EA)
Number of Hedge Fund Holders: 45
Electronic Arts Inc. (NASDAQ:EA) develops, markets, and distributes games, content, and services for PCs, game consoles, mobile phones, and tablets. Its games and services span various genres, including action, simulation, sports, and role-playing, primarily under the Battlefield, The Sims, Apex Legends, Anthem, Need for Speed, and Plants v. Zombies brands. Its license games portfolio includes FIFA, Madden NFL, and Star Wars brands. Electronic Arts Inc. (NASDAQ:EA) also offers advertising services and licenses its games to third parties as well.
The company experienced a short-term impact on its near-term results, with net bookings in fiscal Q3 2025 reaching $2.2 billion, down 6% year-over-year. However, its long-term outlook remains unchanged, as Electronic Arts Inc. (NASDAQ:EA) is continually adapting its games and services according to player preferences. It is also redefining its portfolio to deliver sustainable growth.
The company announced plans for a $1 billion accelerated stock repurchase in addition to its current $375 million per quarter program, bringing total stock repurchases to $2.5 billion. This reflects Electronic Arts Inc.’s (NASDAQ:EA) commitment to returning capital to shareholders and exhibits confidence in its long-term growth outlook supported by a strong balance sheet and cash flow generation. The company ranks seventh on our list of the 10 best video game stocks to buy now.
6. Unity Software Inc. (NYSE:U)
Number of Hedge Fund Holders: 48
Unity Software Inc. (NYSE:U) develops video gaming software and offers software solutions to create and monetize real-time, interactive 3D and 2D content for tablets, mobile phones, consoles, and AR and VR devices. Artists, developers, and designers use the company’s platform to build content for gaming, automotive, retail, engineering, and other industries.
The company reported $457 million in revenue in fiscal Q4 2024, down 25% year-over-year and attributed to its portfolio reset. However, the results depicted meaningful progress in the quarter, as revenue in the company’s strategic portfolio grew at its fastest rate in four quarters, and adjusted EBITDA beat the top end of its guidance by 26%.
Some of the primary reasons behind optimism surrounding the company include the appeal of its new pricing mode and the successful launch of Unity 6 – the most stable version of the Unity Engine to date. In addition, Unity Software Inc. (NYSE:U) is also making significant progress in AI for its advertising customers, providing considerable optimism for the future. The company ranks sixth on our list of the best video game stocks to buy now.
5. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 61
Roblox Corporation (NYSE:RBLX) provides online gaming services. Its platform comprises Roblox Client, Roblox Studio, and Roblox Cloud. Roblox Studio is an app that allows users to explore digital 3D worlds, while Roblox Studio is a toolset used by creators and developers to publish, build, and operate 3D experiences and other content. Roblox Cloud encompasses the infrastructure and services powering human co-experience platforms.
The company reported 32% year-over-year revenue growth in fiscal Q4 2024, reaching $988 million and surpassing analyst estimates of $960 million. Its bookings also grew 21% year-on-year to $1.362 billion, surpassing the top end of its guidance. Japan and India make up two very large markets for the company, and drove over 50% year-over-year growth. Daily Active Users (DAUs) for the company rose 18% year-over-year to 85.3 million in fiscal Q4 2024.
Roblox Corporation (NYSE:RBLX) is also expanding the range of the ages on its platform. Over 61% of its total DAUs fall in the over 13 category, which saw a 26% year-on-year growth. All these trends reflect the company’s growing popularity. Roblox Corporation (NYSE:RBLX) is also investing in its virtual economy, app performance, and AI-powered discovery and safety to enhance the user experience.
In Q4 2024, the company fully launched Roblox Assistant to allow conversational creation within Roblox Studio. Roblox Corporation (NYSE:RBLX) expanded its platform availability by launching on PlayStation, and it is continually looking to introduce its platform to new audiences. All of these initiatives are aimed at driving higher engagement to help the platform grow, bringing a positive light to the company.
4. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 65
DraftKings Inc. (NASDAQ:DKNG) is a gaming and digital sports entertainment company that provides online sports betting, online casinos, retail sportsbook, and other consumer product offerings. It operates through the Business-to-Consumer (B2C) and Business-to-Business (B2B). The Business-to-Consumer segment encompasses sportsbook, iGaming, and DFS product offerings, and media and other consumer product offerings, while the Business-to-Business segment covers the design and development of gaming software.
The company’s business is demonstrating strong operating leverage. Its fiscal Q4 2024 earnings reported a 30% year-over-year revenue growth to $4.8 billion. Its adjusted EBITDA improved $332 million year-over-year to $181 million, and free cash flow was positive for the first time in its history. DraftKings Inc. (NASDAQ:DKNG) also acquired 3.5 million new customers at record low customer acquisition costs and grew its total customer base to $10.1 million, reflecting a 42% year-over-year growth.
In 2025, DraftKings Inc. (NASDAQ:DKNG) plans to focus on acquisitions and improve live betting experience through acquisitions like Simplebet and Sports IQ Analytics. Its 2025 guidance points to another strong year with a 35% revenue growth at the midpoint.
3. Take-Two Interactive Software, Inc. (NASDAQ:TTWO)
Number of Hedge Fund Holders: 67
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) develops, publishes, and markets interactive software games primarily through its well-known labels Rockstar Games, 2K, and Zynga. Its products are designed for handheld gaming systems, console systems, personal computers, smartphones, and tablets. The company delivers its portfolio through online platforms, physical retail, digital download, and cloud streaming services. Some of the company’s most popular product franchises are Grand Theft Auto, Red Dead Redemption, and NBA 2K.
The company’s EPS for fiscal Q3 2025 surpassed analyst estimations, touching $0.72 compared to the anticipated $0.58. Management expects the current quarter to exhibit a significant EPS jump as well, exceeding analyst consensus of $1.22 a share and setting guidance of $1.37. Strauss Zelnick, CEO of Take-Two Interactive Software, Inc. (NASDAQ:TTWO), said these strong numbers arose through “significant outperformance” of one of Take-Two’s more valuable games, NBA 2K. He also said that this next year was “shaping up to be one of the strongest ever for Take-Two.” NBA 2K has sold over 7 million units to date, with significantly stronger engagement than last year. The company saw recurrent consumer spending up over 30%, daily active users up nearly 20%, and monthly active users up nearly 10%, reflecting its popularity.
Analysts are bullish on the stock due to Take-Two Interactive Software, Inc.’s (NASDAQ:TTWO) promising lineup of games set to be released next year that are highly likely to drive sales. Of these, Grand Theft Auto 6 is expected to hold true blockbuster potential, as its release is eagerly anticipated across the globe.
2. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 86
Sea Limited (NYSE:SE) is an internet and mobile platform company that provides online gaming services. Its operations are divided into three segments: Digital Entertainment, E-Commerce, and Digital Financial Services. The Digital Entertainment segment develops and offers mobile and online PC games.
Based in Singapore, Sea Limited (NYSE:SE) is known for its popular Free Fire title, one of the top mobile battle royale games. The company’s gaming segment is performing well. Garena, the digital entertainment arm of parent company Sea Limited (NYSE:SE), reported that its daily active users surpassed 100 million in 2024 due to the rising popularity of Free Fire. Fiscal Q3 2024 saw a 24% growth in total bookings, while adjusted EBITDA grew over 34% year-on-year. Free Fire consistently reported over 100 million daily active users in fiscal Q3 2024, reflecting 25% year-over-year growth.
In addition to the Americas and Asia, the company saw meaningful growth in other regions as well, including North Africa. Sea Limited (NYSE:SE) views this region as holding significant untapped opportunity for growth and has been focusing on in-game campaigns and all top game events in this market. The company ranks second on our list of the 10 best video game stocks to buy now.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is a technology company and the largest software producer in the world by revenue. It is the creator of the Xbox gaming console and owns a number of video gaming franchises. The company reported $69.6 billion in revenue in fiscal Q2 2025, up 12%. Its gross margin dollars grew 13% and 12% in constant currency while operating income increased 17% and 16% in constant currency. Earnings per share also experienced a 10% growth, reaching $3.23. These strong results were attributed to the strong demand for Microsoft Corporation’s (NASDAQ:MSFT) cloud and AI offerings.
Microsoft Corporation (NASDAQ:MSFT) expanded its gaming portfolio by completing the $69 billion mega-acquisition of major video game publisher Activision Blizzard (ATVI) in October 2023. It is further focusing on improving the profitability of its gaming business by positioning it for long-term growth driven by higher-margin content and platform services. It is making strides in this plan, with Black Ops 6 taking the spot as the top-selling game in fiscal Q2 2025, with more players in its launch quarter than any other paid release in the franchise’s history.
The company is also continuing to see strong momentum for Xbox Cloud Gaming, with a record 140 million hours streamed in fiscal Q2 2025. In addition, its All-up Game Pass set a new quarterly record for revenue and grew its PC subscriber base by over 30%. Microsoft Corporation (NASDAQ:MSFT) expects revenue for the Gaming segment to be in the low-single-digits in the future, with Xbox content and services revenue growth to be in the low to mid-single-digits driven by first-party content as well as Xbox Game Pass.
Overall, MSFT ranks first among the 10 best video game stocks to buy now. While we acknowledge the potential of video game stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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