The video game market witnessed a massive downslide last year after a solid 2020 and 2021 when sales got a massive boost following the COVID-19 pandemic. A slump in demand coupled with a dearth of new title releases saw sales taking a hit in 2022.
However, the market is trying to make a turnaround and sales this year have been steadily increasing. Also, new title releases and console sales are expected to gives sales a further boost this year.
Video Game Poised to Grow
According to a new report from gaming market research firm Newzoo, the videogame market is projected to expand in 2023, driven by robust sales of gaming consoles like SONY’s SONY PlayStation 5.
According to the report, overall video game revenues are projected to jump 2.6% to $187.7 billion. Moreover, sales of consoles are expected to rise by a solid 7.4% this year. Gaming revenues saw a 5% decline in 2022.
The projected higher sales this year can also be attributed to the release of a slew of highly anticipated delayed titles. Last year’s decline was primarily because gamers lost interest as several companies deferred their new title releases.
Most of these titles are expected to be released in the second half of this year. Moreover, the report mentions that the availability of new gaming consoles has, at last, matched the existing demand, which is boosting sales.
SONY, the manufacturer of PlayStation, expects to hit a record 25 million units of PS5 consoles in sales this year, thanks to an improvement in supply-chain challenges.
A separate report from market research firm Circana shows that the U.S. video game market jumped a solid 9% year over year in June, driven by robust sales of a slew of new titles.
Also, consumer spending on PlayStation hardware hit a new high. June witnessed a total expenditure of $4.7 billion on video game content, hardware and accessories. This figure also marked the second-highest June performance on record.
Moreover, video game spending totaled $26.6 billion in the first half of the year, a 2% rise from the previous year.
Stocks to Watch
The video game industry is making a gradual recovery, with sales rising in the first half and anticipated growth further on new game releases. Considering this favorable outlook, it might be advisable to consider investing in these three video game stocks.
Light & Wonder, Inc. LNW is a leading developer of technology-based products and services and associated content for the gaming, social and digital gaming industries globally. LNW operates under three operating segments — Gaming, SciPlay and iGaming.
Light & Wonder’s expected earnings growth rate for the current year is more than 100%. Shares of LNW have gained 22.8% in the past three months. Light & Wonder presently carries a Zacks Rank 3 (Hold).
Electronic Arts EA is a leading developer, marketer, publisher and distributor of interactive games (video game software and content). EA distributes gaming content and services through multiple distribution channels as well as directly to consumers (online and wirelessly) through its online portals. EA’s games can be played on video consoles, personal computers, mobile devices, tablets and electronic readers.
Electronic Arts’ expected earnings growth rate for the current year is 25.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. Currently, EA holds a Zacks Rank 3.
Motorsport Games Inc. MSGM is a racing game developer, publisher and esports ecosystem provider of official motorsport racing series. MSGM is based in Miami.
Motorsport Games’expected earnings growth rate for the current year is 82.1%. Shares of MSGM have gained 8.9% in the past three months. Motorsport Gamespresently carries a Zacks Rank 3.
Electronic Arts Inc. (EA): Free Stock Analysis Report
Motorsport Games Inc. (MSGM): Free Stock Analysis Report
Sony Corporation (SONY): Free Stock Analysis Report
Light & Wonder, Inc. (LNW): Free Stock Analysis Report
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