Video game spending in Q1 highlights strength of gaming sector

To the dismay of parents everywhere, video games are not going anywhere when COVID disappears, according to Q1 financial data.

The Roundhill BITKRAFT Esports & Digital Entmt ETF (NYSEARCA: NERD) is as good a representative of video game stocks as you’ll get.

And as a whole, the video game industry is leveling up in terms of users and growth!

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Are video games pandemic-proof?

Not only are they pandemic-proof, but they’re also boosted by more and more people staying at home. This was evidenced in last year’s sector numbers, which showed that U.S. spending on the industry increased by 27% for 2020.

But many investors feared that the good times would end when lockdowns eased and vaccines were rolled out. Surely video game spending would fall?

So far, that has not been the case though!

Gaming statistics data firm, NPD Group, revealed yesterday that U.S. spending in the sector jumped 30% year-over-year to $14.92 billion for Q1 2021. That’s with vaccine rollouts in the U.S. and restrictions easing across the nation. When you dive into the numbers, it’s clear that videogames are enjoying more than just a mere pandemic boost though: 

  • Content (actual games) jumped 25% in Q1.
  • Accessories sales rose 42%. 
  • Hardware sales soared 82%. 

These are long-term purchases (nobody is buying a PS5 and putting it aside once the pandemic ends) and it highlights the strength of the industry, even at a time where global semiconductor shortages have ravaged production schedules of new consoles. 

Sure, there remains a broader question about whether the gaming industry can maintain 2020s pandemic-fueled growth, but so far, things are looking rosy. It’s an exciting time for the gaming industry, which is expected to reach a value of almost $300 billion over the next five years, and it doesn’t look like a global pandemic will faze it.

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