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Videogame Sales Hit 12-Year High: 4 Stocks to Buy

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Videogame sales in the United States spiked in March, hitting its highest level in more than a decade. The surge was led by Nintendo Co., Ltd. NTDOY, which sold more than 50 million Switch gaming consoles.

Together, sales of gaming consoles Xbox One, PlayStation 4 and Nintendo Switch rose 63% from a year earlier to $461 million in March. This is a sign that the video gaming industry is likely to benefit from the coronavirus crisis.

The pandemic has forced millions of people into lockdown and quarantine. With nothing much to do locked inside their houses, most are either video streaming or playing video games.

Videogame Sales Boom

According to research firm NPD, videogame sales in the United States hit a 12-year high in March. Sales of gaming hardware, software and accessories in the United States surged 35% to $1.6 billion in March from a year earlier.

The growth is the highest since March 2008  , when sales had risen more than 52% to $1.8 billion, according to NDP. Nintendo’s Animal Cross: New Horizons, which was launched in March, topped the list of best-selling games, outselling Sony Corporation’s SNE PlayStation 4 and Microsoft Corporation’s MSFT Xbox One in console sales.

According to Sellics, which offers technology for vendors on Amazon.com, Inc.’s AMZN Amazon Marketplace, Switch sales on the ecommerce site have increased 2,979% since the start of 2020 in North America. Switch was also sold out at other major retailers like Best But, Inc. BBY, Target Corporation TGT and Walmart, Inc. WMT.

Coronavirus Helps Videogame Industry

Governments across the world are shutting down countries and implementing stay-at-home orders. This has seen certain businesses, including gaming, online streaming and video conferencing, witnessing a boost in user engagement. According to Sellics, videogame sales have jumped around 500% in the United States on Amazon so far this year. 

Besides Nintendo, Activation Blizzard, Inc. ATVI also reported millions of signups for Call of Duty: Warzone, a new free-to-play shooting game available on PlayStation 4, Xbox One, and PC, in March. Sales are up 65% over the same period in 2019. Amazon-owned Livestreaming platform Twitch, which allows others to chat and watch games being played, has seen a surge in the number of hours watched. 

Our Choices

Videogame sales are expected to witness growth in the near term with stay-at-home orders and lockdown likely to remain in place for some time now. Given this scenario it is prudent to say that these five stocks are likely to rally in the near future.

Nintendo Co. 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 11.7%. The Zacks Consensus Estimate for the current year earnings has improved 9.4% over the past 30 days.  Nintendo has a Zacks Rank #2.

SciPlay Corporation (SCPL - Free Report)  is a developer and publisher of digital games on mobile and Web platforms.  The company offers games, which include social casino games Jackpot Party Casino, Gold Fish Casino, Hot Shot Casino and Quick Hit Slots.

The company’s expected earnings growth rate for the current year is 32%. The company’s shares have gained 22.7% in the past 30 days.  SciPlay has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DouYu International Holdings Limited DOYU provides a game-centric live streaming platform. The company operates its platform on both PC and mobile apps.  The company’s expected earnings growth rate for the current year is 88.2%. DouYu has a Zacks Rank #1.

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 35.2%. The Zacks Consensus Estimate for the current year earnings has improved 7.9% over the past 30 days.  Capcom has a Zacks Rank #1.

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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