Following an impressive first quarter, video game sales continued to soar in April, according to a report by analytics firm The NPD Group. Video game sales jumped 73% year over year in April, setting a new U.S. record. As people continued to stay at home in April due to the coronavirus outbreak, they spent more than $1 billion on computer games, hardware and accessories.
Coronavirus cases escalated in April and stay-at-home orders were enacted at the federal and state levels. With lockdowns yet to be lifted completely and many staying at home on fears of coronavirus spreading, there is not much entertainment other than video games.
Video Games Score Big During Pandemic
According to a report by The NPD Group, video game sales hit $1.5 billion in the month of April, beating the earlier U.S. record of $1.2 billion set in April 2008. Also, sales recorded a 73% year-over-year jump. The figure includes software, hardware, accessories and game card sales for the month.
Overall, software sales hit $662 million in the month, topping the previous record of $642 million set in April 2008. Hardware sales also did well, with hardware spending jumping 163% year over year to $420 million.
Videogame Industry Poised to Grow
Of all the games, Final Fantasy 7 Remake was the top seller in April. Call of Duty: Modern Warfare continued to be the second best-selling game of the month, and remains the best-selling game both year to date as well as in the 12-month period ending April 2020.
Nintendo Co. Ltd.’s NTDOY Switch set a new hardware sales record, NPD said, beating the previous record set by Nintendo Wii sales in 2009. Needless to say, the coronavirus pandemic played a major role in helping the video game industry grow in recent times.
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. Technavio, which monitors the gaming software market, reported that the market is poised to reach $65.19 billion during 2020-2024, at a CAGR of more than 10%.
Given this sudden surge in sales and upbeat sentiment in the video gaming industry, it makes for an opportune time to invest in gaming stocks that are sure to gain in the near term.
Activision Blizzard, Inc. ATVI is a leading developer and publisher of console, online and mobile games. The company’s Call of Duty is one of the most-popular gaming franchises globally. Its Overwatch League can be considered a pioneer of the e-sports concept.
The company’s expected earnings growth rate for the current year is 20.4%. The Zacks Consensus Estimate for current-year earnings has improved 9.3% over the past 30 days. Activision Blizzard has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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 6%. The Zacks Consensus Estimate for current-year earnings has improved 10.9% over the past 60 days. Nintendo has a Zacks Rank #2.
Glu Mobile Inc. GLUU is a leading global publisher of mobile games. Its portfolio of top-rated games includes original titles Super K.O. Boxing!, Stranded and Brain Genius, and titles based on major brands from partners including Atari, Activision, Konami, Harrah's, Hasbro, Warner Bros., Microsoft, PlayFirst, PopCap Games, SEGA and Sony.
The company’s expected earnings growth rate for the current year is 70.6%. The Zacks Consensus Estimate for current-year earnings has improved 16% over the past 60 days. Glu Mobilehas a Zacks Rank #2.
Electronic Arts Inc. EA distributes its gaming content and services through multiple distribution channels as well as directly to consumers (online and wirelessly) through its online portals — Origin and Play4Free.
The company’s expected earnings growth rate for next year is 12.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. Electronic Artshas a Zacks Rank #2.
Capcom Co., Ltd. CCOEY 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 29.6%. The Zacks Consensus Estimate for current-year earnings has improved 2.9% over the past 60 days. Capcom has a Zacks Rank #1.
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