Joe Biden Won’t Stop The Growth of Video Game Stocks in 2020

Presidential nominee Joe Biden made controversial remarks about video game developers on Monday, but Take-Two Interactive and Co. won’t be concerned

Jan. 21, 2020

There is a time and a place for presidential candidates to address their concerns regarding hot topics in society such as guns, opioid addiction, or the poverty problem. It seems that nobody told Joe Biden about this time or place.

The U.S. presidential hopeful and former Vice President is known for his gaffes in interviews, and his latest with The New York Times on Monday was rather controversial. When asked to share his thoughts on Silicon Valley game developers — just your everyday question apparently — Biden responded that they were all “little creeps” who made “games that teach you how to kill”.

Something tells me Silicon Valley’s gaming elite won’t be too worried. 

What is going on with video game stocks?

The market slept through this hilariously awkward interview on Monday due to its closure for Martin Luther King Day. Even if it had been awake, it’s unlikely that it would have reacted poorly. After a rocky period spanning from 2017 to last year, some of the top names in gaming such as Sony Corp (NYSE: SNE), Activision Blizzard (NASDAQ: ATVI), and Take-Two Interactive (NASDAQ: TTWO) have begun to make strong gains in the stock market.

Over the past 12 months ending January 14th, 2020, the video game industry, as represented by the VanEck Vectors Video Gaming and eSports ETF (NASDAQ: ESPO) has surpassed the market with gains of 40.7%, as compared with the S&P 500 (NYSEARCA: VOO), which has grown by 27.2%. Compare this with a more high profile sector such as tech, which gained 47% in 2019, and you see that gaming was not far off. 

What companies are driving gaming’s growth?  

Going back to the tech comparison, if you think of the growth of the sector, the usual five suspects appear such as Facebook (NASDAQ: FB), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Google (NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN). The gaming sector also has its own ‘big five’ in Sony, Activision Blizzard, Take-Two, Electronic Arts (NASDAQ: EA), and Zynga Inc (NASDAQ: ZNGA).

Zynga Inc was the top-performing gaming stock of the year, with just under 60% growth. This is despite the 12% slowdown in video game sales in 2019, caused by the anticipation of new consoles in 2020. 

How will gaming perform in 2020?

The best selling games in 2019 still managed to set new records, despite being the year before new console releases. The Nintendo Switch experienced the best hardware sales in 2019 of any console, but this could all change in 2020 as Microsoft prepares the release of Xbox Series X and Sony looks to release the much anticipated Playstation 5.

As of November 2019, the Playstation 4 sold close to 100 million units, and with the gaming community expected to reach 2.7 billion users by 2021, this number only looks set to increase.

With two major console releases expected this year and the potential release of major titles such as GTA 6 on the horizon, as well as growing popularity and user numbers, the gaming sector could be set to have a very good start to the new decade.

For related articles on the importance of gaming, and which gaming stock was one of the top companies of the past decade, check out the following:

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