The pandemic has battered all major industries. However, there have been some major beneficiaries too that have seen demand for their products escalate during the pandemic, especially video games.

Videogame sales have been already on the rise and the pandemic further helped the market, with more people buying gaming products and peripherals as they stayed at home.

Videogame Sales Hit Record High

While movie production companies and international sports have been taking a beating due to the COVID-19 breakout, videogames seem to be the only source of entertainment that has seen a surge in sales of consoles, hardware and other videogame accessories.

According to market research firm NPD Group, videogame sales hit $56.9 billion in 2020 in the United States, jumping 27% from a year earlier. This is also the highest sales generated ever.

Moreover, spending on hardware totaled $5.3 billion, jumping 35% year over year and hitting its highest level since 2011. Understandably, as more people stayed at home they spent more time playing games on the consoles or mobiles. Player reported 42% more weekly playtime in 2020, averaging 8 hours per week.

Videogame Industry Poised to Grow

The videogame industry had a great year with sales soaring through all the four quarters and is likely to remain high in the coming months also with no signs of the coronavirus subsiding. This is especially true with the recent launch of next-generation console games like Xbox by Microsoft Corporation (MSFT Free Report) and Sony Corporation’s (SNE Free Report) Playstation 5.  

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Nintendo Co.(NTDOY Free Report) stole the show in 2020 with its Switch turning out the bestselling console. PS5 was the second bestselling console in terms of revenues while PS4 was the second best in terms of units sold.

Needless to say, videogames will continue to dominate the entertainment space at least till the time the coronaviurus vaccine proves to be effective and fears subside. Moreover, with the recent spike in coronavirus cases, it is likely that outdoor entertainment will not resume anytime soon and video games will make up for that.

Our Choices 

Given this sudden surge in sales and upbeat sentiment in the video gaming industry, this makes it an opportune time to invest in gaming stocks that are sure to gain in the near term.

Nintendo Co. (NTDOY Free Report) is a worldwide leader in the creation of interactive entertainment. It manufactures and markets hardware and software for its popular home video game systems, including Nintendo 64 and Game Boy.

The company’s expected earnings growth rate for the current year is 55.4%. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 60 days.  Nintendo has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank  stocks here.

Capcom Co., Ltd. (CCOEY Free Report) plans, develops, manufactures, sells and distributes consumer video game. Its operating segment consists of Digital Contents, Arcade Operations, Amusement Equipments and Other Businesses segments.

The company’s expected earnings growth rate for the current year is 37.7%. The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the past 60 days. Capcom has a Zacks Rank #2.

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Sony Corporation designs, manufactures and sells several consumer and industrial electronic equipment. The company’s product roster comprises audio and video equipment, televisions, displays, semiconductors, electronic components, gaming consoles, computers and computer peripherals, and telecommunication equipment. 

The company’s expected earnings growth rate for the current year is 51.7%. The Zacks Consensus Estimate for current-year earnings has improved 12.2% over the past 60 days. Sony has a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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