We recently published a list of the 10 Best Video Game Stocks to Buy Now. In this article, we are going to take a look at where Sea Limited (NYSE:SE) stands against the other 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.
READ ALSO: 12 Best Education Stocks to Buy in 2025 and 10 Best Vaccine Stocks to Buy According to Hedge Funds.
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.
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).
A person livestreaming their gameplay on a mobile device with integrated payment options.DER
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.
Overall, SE ranks 2nd on our list of the best video game stocks to buy now. While we acknowledge the potential of SE as an investment, 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 SE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.