Leading companies in the video game biz should continue to benefit from growth trends that are helping the market to expand around the world and have the potential to deliver strong performance for shareholders.Despite social-distancing and work-from-home measures creating new challenges to game development, player engagement is soaring.Companies that can continue adapting to -- and shaping -- players demands for interactive electronic entertainment could be poised to deliver great returns for shareholders.With that in mind, Capcom ( OTC:CCOEF ), Take-Two Interactive ( NASDAQ:TTWO ), Tencent Holdings ( OTC:TCEHY ), Activision Blizzard ( NASDAQ:ATVI ), and Electronic Arts ( NASDAQ:EA ) stand out as top gaming stocks for the long term.
Hit titles in its Resident Evil and Monster Hunter franchises have driven impressive sales and earnings growth, and the company has a strong set of properties beyond those two core pillars. It owns franchises including Mega Man, Devil May Cry, and Street Fighter in addition to a deep library of lesser-known but beloved classics. There are many reasons to like this long-standing Japanese business, which has been an industry stalwart for decades and created some of the mediums most memorable experiences. Capcom also pays a dividend, and aims to return roughly 30 of its annual profits to shareholders through dividend payments. Earnings can be erratic in the video game industry, but management has established returning cash to shareholders as a core part of stock ownership. Interactive Muscle Growth Games Series In AllGrand Theft Auto is the companys biggest and most important property -- and one of the most profitable series in all of entertainment. But the game maker has also been making commendable progress building its overall slate. ![]() Its NBA 2K basketball series is a leader in the sports-game category. And the company has a variety of smaller series and other development initiatives that could help drive growth. Game development is typically complicated and resource-intensive, but Take-Twos top development studios have repeatedly risen to the task and delivered products that delighted players and recorded high levels of engagement and in-game spending. With its fantastic development talent and trio of highly profitable core franchises creating a strong foundation, the company has room to pursue new growth opportunities in categories including mobile games and esports. The companys strength in multimedia, its dominant WeChat social network, and its holdings in other gaming companies make it uniquely compelling as a diversified investment in technology and content. Tencents hit game League of Legends has been going strong since its release in 2009 and stands as a top draw in esports, and the company is also responsible for the hugely popular mobile game Honor of Kings. In addition to Tencents internally produced and operated titles, the company owns substantial stakes in video game publishers including Epic Games, Supercell, Activision Blizzard, and Ubisoft ( OTC:UBSFF ). All together, the company has one of the most bankable collections of video game properties in the industry, and it has shaped and benefited from trends including the rise of digital distribution and the sale of in-game items. The publisher is responsible for big game franchises including Call of Duty, Overwatch, World of Warcraft, and Candy Crush Saga, and its also an early leader in the esports space. Under the leadership of CEO Bobby Kotick, Activision Blizzard has a great track record of releasing games that have staying power and keep existing fans engaged while attracting new players, and the company has consistently paid a dividend since 2010. ![]() The global popularity of video games will likely continue to grow in coming decades, giving leading publishers opportunities to reach new players and expand sales in emerging geographic markets. Interactive Muscle Growth Games Software Distribution AndEAs dependable lineup of gaming franchises and experience developing and marketing titles that resonate with players should help it tap into that growth, and continued expansion for digital software distribution and the sale of virtual items should help boost sales and margins as well.
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