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Coronavirus Lockdown Boosts Mobile Gaming and App Stores

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Months have passed by since the outbreak of coronavirus was first reported. As the disease continues to spread rapidly, more areas are being put under lockdown. This is however a boon for mobile gaming and app stores as people stay home and spend more time on their smartphones.

Downloads Surge as People Stay Indoors

China, the epicenter of coronavirus has so far confirmed more than 80,000 cases. And with the majority still confined to their homes, smartphones are playing a major role. Per a report from app analytics firm Sensor Tower, game downloads worldwide increased 39% last month.

According to analytics provider App Annie, more than 222 million downloads have been made in China through Apple’s online store since Feb 2, as most users downloaded games and other apps, giving a boost to the $150 billion global games industry. In fact, Apple’s app store has recorded a 62% jump in mobile game downloads in China.

Average weekly downloads jumped 80% in the first three weeks of February in comparison to popular weekly download for the whole of 2019, according to App Annie.

Big names in the gaming world like Tencent Holdings Limited TCEHY is at a 20-month high and shares have risen nearly 2% so far this year. In fact, Tencent’s online battle game, Honor of Kings has been one of the most downloaded games in China according to mobile app analytics firm, App Annie.

App Stores and Payment Platforms Also Reap Profits

The surge in gaming has boosted several payments platform. With players spending more time ‘in-game’, they spend money to avail extra features in games. This benefits online payment platforms like Boku. The company reported a 30% jump in payment volumes to $966 million in the first two months of 2020.

Boku’s platform allows users to pay for online gaming, music and video streaming services. Payment volumes increased 2.5% in February compared to the month before.

Additionally, downloads of apps like Keep, which livestreams fitness classes has increased. Healthcare app, Ping An Good Doctor saw downloads jump 1,186%.

With schools in several cities remaining closed since the outbreak, education apps are also gaining pace. For instance, shares of New Oriental Education & Technology Group Inc. (EDU) have been rising, thanks to its online education app.

5 Stocks to Closely Watch

Given the current status, it seems that it will takes weeks for people to come out of their house arrest due to coronavirus, especially in China. We have shortlisted five mobile game and app developers and app store providers that are set to benefit from the increased time spent due to quarantine.

Every iPhone comes with an in-built iOS App Store, providing nearly 2.2 million gaming and non-gaming apps. In fact, as per CNBC’s analysis, Apple Inc.’s AAPL app store platform grossed around $50 billion in 2019. This definitely helped Apple gain a spot in our list.

What’s more? This Zacks Rank #2 (Buy) company’s expected earnings growth rate for the current quarter is 9.4% compared with the Zacks Computer - Mini computers industry’s projected earnings growth of 4.9%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

One of China’s biggest gaming publishers, Tencent hit a new all-time high in daily average users during the week of Jan 30. With popular game series like PlayerUnknown's Battlegrounds and Honor of Kings, the company definitely seems a winning investment. This Zacks Rank #2 company’s expected earnings growth rate for the current year is 20.5% compared with the Zacks Internet - Services industry’s projected earnings growth of 0.7%.

Android emulators help gamersbring mobile gaming experience to large screen. Users can install applications intended for mobile use from Google Play and play mobile games on their PC. If that was not enough, Alphabet Inc.’s (GOOGL - Free Report) Google Play Store has 2.9 million apps that witness heavy traffic regularly. The Zacks Rank #3 (Hold) company’s expected earnings growth rate for the current year is 10.9% compared with the Zacks Internet - Services industry’s projected earnings growth of 0.7%.

Next we have, Electronic Arts Inc. (EA - Free Report) , an American video game development studio, known for its popular collections of sports, first-person shooter, action, role-playing, and simulation games. The maker of millennials’ popular game FIFA carries a Zacks Rank #3.  Electronic Arts’ expected earnings growth rate for the next quarter is more than 100% against the Zacks Toys - Games - Hobbies industry’s projected earnings decline of 65.7%.

The Stars Group Inc. TSG engages in online gaming and betting businesses, offering an array of online real-money poker, casino and betting, play-money poker, and casino and sports prediction games. This Zacks Rank #3 company’s expected earnings growth rate for the current year is 4.3% against the Zacks Gaming industry’s projected earnings decline of 5%.

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