How to Analyse the Gaming Stock Market

The multi-billion-dollar global gaming industry continues to show signs of impressive growth, and expert analysts project a similar upward trend over the coming years. 

If you are considering investing in gaming stocks, here are some essential things about analysing the gaming stock market and mitigating as much risk as possible.

How much is the gaming sector worth today?

According to recent figures, the gaming sector is worth nearly an incredible £197 billion. People worldwide spend vast sums of money on various games, devices, and other equipment. 

The sector is made up of companies that specialise in developing and manufacturing digital entertainment games, consoles, desktop computers, laptops, dedicated handheld devices, and tablets. It also organises and hosts professional eSports competitions, leagues, and tournaments, offers live streaming, and develops and supplies the products, services, and content found on iGaming sites, such as 10bet’s Casino & Sportsbook website.

Top tips for analysing gaming stock in 2024

When deciding which gaming stock to invest in, you should always consider a company’s competitive advantage, industry trends, and business models. There is always an element of risk involved when investing in any stock, and you should only ever invest with money you can afford to lose.

When analysing the gaming stock market, here are some of the most important things to consider: 

• Trends – always look at the information at hand to determine whether that gaming company’s stock has an upward or downward trend
• Technical analysis: consider various factors, such as trading volume, and try to detect price patterns. Also, estimate potential future price movements by studying historical market data and charts.
• Fundamental analysis – to better understand the intrinsic value, try to get your hands on as much relevant data and statistics as possible, such as ratios, valuation techniques, and that gaming company’s financial statements.
• Relative strength – try to gauge if gaming stock in that company you are thinking of investing in is typically oversold or overbought 
• Volume – gather accurate details on exactly how much gaming stock in your chosen company has been traded during a certain amount of time
• Resistance and support – try to pinpoint exact price levels where the market may fluctuate 
• Price to earnings ratio – gather the earnings per share (EPS) figures and compare this information to the company’s stock price, also known as the P/E ratio (price to earnings)
• Industry analysis – to get a better understanding of why a gaming company’s stock is valued as it currently is, take a broader look at the overall stage of the industry’s life cycle

When looking at the price-to-earnings ratio, you must divide the price of one gaming stock share by the earnings per share (EPS). Always remember that seeing a lower price-to-earnings ratio is typically a good sign. 

When examining a company’s fundamentals, examine its overall performance over at least the past five years. Also, examine the price-to-book ratio, return on equity, and dividend figures to help you make more informed and strategic investment decisions.

However, always be aware that you are subject to losses and that even the best-performing stocks do not always guarantee a return on your initial investment. 

Listen to what the experts say, keep your fingers on the pulse of the gaming stock market, and don’t put all your eggs in one basket. 

In other words, consider investing some of your money in several gaming stocks, not just one. 

Which three gaming stocks are worth investing in right now?

As mentioned, just because these three gaming stocks are performing well right now doesn’t mean you will become an overnight millionaire when investing in them. These are ideal long-term investments, but you should still conduct your research before spending any of your hard-earned money. 

The three top gaming stocks currently outperforming most others are the following:

• Electronic Arts

• Microsoft
• Take-Two Interactive

Others include Tencent Holdings Limited, Sony Group Corporation, Apple Inc., NetEase Inc., Alphabet Inc., Activision Blizzard Inc., and Nintendo Co Ltd.

Final thoughts

There are many different ways to trade or invest in gaming stock, so before signing up for a platform to specifically invest or trade in this particular sector of the entertainment industry, always research to find out which type of investment is right for you. 

For example, read the expert reviews to determine whether the trading platform you are considering joining is safe. Don’t just register a new account with the first one you find without conducting your due diligence and basic background checks.