We recently compiled a list of the 10 Best Gaming Stocks to Invest In According to Billionaires. In this article, we are going to take a look at where Unity Software Inc. (NYSE:U) stands against the other best gaming stocks.
The gaming industry has experienced significant changes over the past few years. During the COVID-19 pandemic, the sector saw remarkable growth as more people spent time indoors. However, this momentum did not continue after restrictions eased, which led to lower consumer spending on games and consoles. Economic uncertainties and challenges like inflation further impacted the industry, resulting in layoffs, studio closures, and project cancellations across the industry in 2024. Despite these setbacks, analysts are optimistic about a recovery supported by upcoming major releases.
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According to research firm Newzoo, video game consoles are expected to be the biggest growth driver in the market until 2027. The anticipated launches of GTA VI in fall 2025 and the new Switch console in summer 2025 are seen as key factors fueling a rebound. GTA V, the predecessor to GTA VI, is one of the most profitable games ever and has sold over 210 million by December 2024. Analysts believe new releases will encourage players to spend more on consoles and games. This could potentially reverse the industry’s recent slowdown.
According to the report by Newzoo, console software revenue is projected to increase 7% from 2024 to 2027 and outperform PC software revenue growth of 2.6%. By 2027, console revenue is expected to account for over 56% of the total PC and console software revenue of $92.7 billion. Total playtime increased by 6% in 2024 and Q4 saw the highest quarterly playtime thanks to blockbuster releases like the new Call of Duty title.
Emmanuel Rosier, director of market analysis at Newzoo, told Reuters that major console titles, such as Spider-Man and God of War, are driving engagement on consoles. He also pointed out that these AAA or AAAA releases have less impact on PC gamers, who prefer older titles.
Methodology
To compile our list of the 10 best gaming stocks to invest in according to billionaires, we looked for the largest gaming companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of the best gaming stocks. Next, we focused on the top 10 gaming stocks most favored by billionaires. Data for the number of billionaire investors for each stock was taken from Insider Monkey’s Q4 2024 database. Finally, the 10 best gaming stocks to invest in were ranked in ascending order based on the number of billionaires holding stakes in them as of Q4 2024.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds.
Why do we care about what hedge funds do? 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 close-up of an experienced game engineer’s hands typing a complex code on a laptop.
Unity Software Inc. (NYSE:U)
Number of Billionaire Investors: 10
Number of Hedge Fund Holders: 48
Unity Software Inc. (NYSE:U) is an American video game software development company that ranks among the best gaming stocks. The company is best known for Unity, a leading game creation engine used to create video games and other applications. Unity Software Inc. (NYSE:U) offers a suite of tools that help developers create, market, and grow video games and other applications across all major platforms. In October 2024, the company launched Unity 6, the company’s next-gen game development platform with new features including multiplayer workflows, improved graphics capabilities, and tools for mobile web development. The new graphics capabilities move workloads from the CPU to the GPU to improve performance.
The company is focused on innovation and improving developer workflows through new technologies and updates. On March 19, Unity Software Inc. (NYSE:U) announced its plans for three major updates to Unity 6 in 2025, starting with Unity 6.1 in April. This update will enable higher frame rates, smoother gameplay, and reduced CPU/GPU load to deliver better device performance. It will also enhance debugging for easier optimization. Unity Software Inc. (NYSE:U) will expand Unity 6.1’s platform support to include large and foldable Android screens, Meta Quest, Android XR profiles, and Instant Games, with WebGPU for developers on supported browsers. These features will provide developers with more capabilities to create optimized games across diverse platforms.
Later updates in 2025 will help developers leverage AI-driven workflows to create games faster and more efficiently. New AI-powered tools integrated into the Unity Editor will automate repetitive tasks and streamline game creation. Developers will also benefit from the seamless integration of third-party generative AI solutions. The updates will empower developers with efficiency tools that will help improve problem diagnosis, player experience optimization, and new player acquisition.
Overall, U ranks 8th on our list of the best gaming stocks to invest in according to billionaires. While we acknowledge the potential of U as an investment, our conviction lies in the belief that some 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 U but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
