Investing in the Business of Video Games

Don’t just play the game.
Learn more about investing in ETFs and stocks in the companies that are leading the video game industry.

Stash is giving new users a $5 sign-up credit to start investing today.

Get my $5

Read on

Here’s what you’ll learn in this guide:

  • Why video games are a huge global business
  • How the industry is innovating in virtual reality and eSports
  • How the industry appeals to an increasingly diverse population and demographic of consumers

Learn more about investing in the video game industry.

Video games have gone way beyond sticks and consoles, they’re a huge global business worth hundreds of billions of dollars. Learn how video game companies can fit into a diversified portfolio.

What is the video game industry?

Video games have gone way beyond the console. We play on our phones, create virtual lives, and get to live and play in fantasy worlds. Once upon a time, you had to stand on line at an arcade to play your favorite video game. Now you can choose your fighter—and play with people around the world.

Video games are a big, global business, potentially worth as much as $230 billion in the next five years. Two-thirds of American households contain people who regularly play video games, according to industry data.

As for the size of the industry and its overall economic impact, the sector comprises nearly 2,500 companies around the world, employing more than 220,000 people. The employment outlook in the industry is good, too—the number of jobs has been growing at a rate of about 3%, according to industry data.

As the gaming industry has expanded over the years, so has the number of companies working in and around it. While some companies focus solely on software—games themselves, in other words—others build both hardware and software. Yet others build hardware only, including processors and chips to improve consoles, phones, and computers.

Some of the bigger names in game development are Activision Blizzard, Capcom, Square Enix, and Electronic Arts. Alongside these companies are ones that act as both developers or publishers, and that build hardware,  such as Microsoft, Sony, and Nintendo.

Who’s gaming?

America’s gamers are also increasingly diverse, as the results of a recent Pew Research survey show. Young men make up the industry’s largest base of consumers, but gaming is popular across racial, age, and educational levels.

Along racial lines, Hispanics are America’s largest group of gamers with 48% playing at least some of the time. Black (44%) and white (41%) Americans were somewhat less likely to play, overall, according to Pew’s data.

Gaming’s most populous demographic are young American men—specifically, men between the ages of 18 and 29. Roughly 70% of men younger than 30 play games, compared with only about 50% of women in the same age range.

In terms of education, individuals that have some college experience are more likely to be active gamers (50%) than those who never attended college or graduated. College graduates (36%) are the least-likely to actively play.

What’s new in the video gaming industry?

Film and TV

Today, the gaming industry makes more money than other stalwarts of the entertainment sector, including music and movies.

Studios are spending hundreds of millions to produce games such as “Grand Theft Auto V” and “Destiny” (and their sequels), and the profits for successful games tally in the billions.

And there’s still a lot of room for the sector to grow.

Virtual Reality

Virtual reality, or VR gaming, is still in its early stages but is advancing at a rapid pace. There are many VR systems already available to consumers, from the low-tech Google Cardboard to the PlayStation VR.


Gaming is also breaking new cultural barriers. eSports, for example, which started in the early 1990s, has exploded in popularity. In eSports, professional players compete against each other in popular games like “DOTA 2,” “League of Legends,” and “Counter-Strike: Global Offensive.”

Like other sports leagues, eSport athletes  can earn big salaries from sponsors and spectators who pay to watch. It’s a growing element of the industry that’s expected to earn as much as $1.5 billion by 2020, according to industry reports.

Investing in the video gaming industry

For investors interested in the business of gaming and who want to add some of these companies to their portfolios, there are a few simple ways to do it.

Investors in the U.S. can buy shares of stock in video games and related companies on a publicly-traded exchange, or buy shares of a fund—like an exchange-traded fund, or ETF—that offers exposure to those companies.

Investing in video game stocks

A single stock is just that, a share of ownership of a company. For example, investors can purchase shares of stock in companies like Activision Blizzard, Microsoft, Take-Two Interactive, or Electronic Arts. You can also buy shares in companies that support the industry, such as gaming microchip maker NVIDIA*.

Investing in gaming ETFs (exchange-traded funds)

Exchange-traded funds (ETFs) are a basket of investments bundled into a fund that’s traded on an exchange like the Nasdaq or NYSE.

When you invest in an ETF, you are effectively buying small fractions of the companies within that ETF. The fraction depends on the weights stocks held in that fund. That fund owns the stocks within it and generally tracks an index–or group of investments that represent part of an industry or investment theme.

ETFs vs stocks

ETFs have become popular in recent years as they give investors the opportunity to invest in the performance of a group of stocks without having to buy every single stock in the fund or handpicking single stocks.

Not only can this save time and research, ETFs can offer diversification, which many consider to be an essential investing strategy.

Investing in the video gaming industry on Stash

Want to invest in the video gaming sector? You can check out the themed investments offered on Stash, as well as single stocks.

*Listed investments currently available on Stash but not necessarily representative of all investments.
Claim your $5, and learn more about investing on Stash
Get my $5

This material has been distributed for informational purposes only and is not intended to provide investment, tax, or legal advice or a recommendation of any particular security, strategy or investment product. This material is confidential to the recipient and must not be reproduced or distributed to any other person without the prior written consent of Stash Investments LLC (“Stash”). This material has not been independently verified, is subject to updating and amendment and the material, information and descriptions contained herein are not intended to be complete. This material discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research. This material may not be current and Stash has no obligation to provide any updates or changes. Any reference to a specific company or security does not constitute a recommendation to buy, sell, or hold any such investment. This material does not take into account the financial position or particular needs or investment objectives of any individual or entity. Certain information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

Investors should consider the investment objectives and unique risk profile of Exchange Traded Funds (“ETFs”) carefully before investing. ETFs are subject to risks similar to those of other diversified portfolios. Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. A prospectus contains this and other information about the ETF and should be read carefully before investing. Customers should obtain prospectuses from issuers and/or their third party agents who distribute and make prospectuses available for review. ETFs are required to distribute portfolio gains to shareholders at year-end. These gains may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading will also generate tax consequences.

Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and the current low-interest rate environment increases this risk. Current reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Furthermore, real estate investment trusts (“REITs”) are subject to changes in economic conditions, credit risk, and interest rate fluctuations.

There is no assurance that any investment, including any investment that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) an investment’s total return in excess of that of the investment’s benchmark between reporting periods or 2) an investment’s total return in excess of the investment’s historical returns between reporting periods. Unusual performance is defined as a significant change in an investment’s performance as compared to one or more previous reporting periods.

Diversification does not ensure against loss. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors or that market conditions will not deteriorate, and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.

None of Stash, nor any of its directors, officers, employees, shareholders, advisers, agents or affiliates (together the “Stash Parties”) make any representation or warranty, express or implied as to the accuracy or completeness of this material, and nothing contained herein shall be relied upon as a promise or representation whether as to past or future performance. To the maximum extent permitted by law, none of the Stash Parties shall be liable (including in negligence) for direct, indirect or consequential losses, damages, costs or expenses arising out of or in connection with the use of or reliance on this material.