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Mobile Gaming Continues to Accelerate: 5 Stocks to Watch
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The gaming market continues to grow by leaps and bounds. In fact, it has surpassed the movies and music industry, with all ages and demographic groups spending more and more time in playing and the increasing social interactions via gaming.
Mobile Gaming Boom Continues in 2021
According to Accenture’s estimates released in its new report, the value of the gaming industry already exceeds $300 billion. This includes $200 billion in direct spending on consoles, software and subscriptions, in-game purchases, and mobile advertisement revenues, and another $100 billion from mobile devices, gaming PCs, peripherals, and gaming-related products and services. The wide adoption of smartphones globally, accompanied by high-speed Internet has led to explosive growth in mobile gaming.
Mobile gaming has been home to both casual players and hardcore gamers. The largely free to download option like Among Us, Subway Surfer andHunter Assassin has attracted a huge number of casual players over the past years. While core games like PUBG Mobile, Honour of Kings andPokémon Go have derived solid returns during the pandemic-induced boredom through in-app purchases, casual games found more committed players as they stayed in the games for a much longer session time. Per App Annie’s State of Mobile Gaming 2021 report, casual games led the way in terms of downloads, comprising 78% of all game downloads compared with 20% for core games and 2% for Casino.
Additionally, events drove the most gaming Average Revenue Per User (ARPU) in 2020. Games had monetized customization and players invested a lot of money in customizing avatars and leaderboards. In fact, App Annie’s report highlights that consumer spends in-game events more than doubled to $53 billion. The company also estimates that consumers will spend more than $120 billion this year versus $100 billion spent last year.
Niantic’s hit game Pokémon Go had been forced to convert its real-world event, Pokémon GO Fest, which serves as the biggest annual celebration of the game to go online worldwide. Since 2016, the GO Fest has been held in different parts of the world, with gamers coming in from various countries to play the two-day special event, hauling in huge revenues for the company. However, when lockdowns forced gamers to stay at home, this augmented reality mobile game that requires gamers to walk around had to make massive changes like providing more Pokémons at gamers’ current location, increase gyms and stops and more. Turning the Pokémon GO Fest 2020 online (those who purchased the tickets were allowed to play from their home location) pushed players to spend a total of $17.5 million, the game’s highest revenues since 2016. This year, the game has already announced dates for the Pokémon GO Fest 2021, which can be played from anywhere.
IPO Boosting the Gaming Space
On Apr 29, Electronic Arts Inc. (EA - Free Report) acquired Glu Mobile for $2.1 billion in enterprise value. The acquisition will help Electronic Arts and Glu accelerate the former’s mobile gaming portfolio growth along with building a network of 100 million monthly active players in mobile, and creating a market-leading portfolio of more than 15 top live services across multiple fast-growing genres in the gaming market. Glu’s top games like Covet Fashion, Design Home, Kim Kardashian: Hollywood and MLB Tap Sports Baseball will also be more accessible to global audiences, thanks to Electronic Arts’ wider outreach.
On Apr 15, AppLovin, which owns popular mobile games like Matchington Mansion and Wordscapes, went public on the Nasdaq raising $1.8 billion in the initial public offering (IPO). The company has benefited significantly from the pandemic-led gaming industry boom and has made numerous acquisitions in recent years. AppLovin has a portfolio of more than 200 games and also sells access to its marketing software to other developers, making it easier for them to monetize their applications.
Additionally, several mergers, acquisitions and deals constantly continue to boost the mobile gaming space. Recently, Tripledot Studios, a mobile game studio, raised $78 million in funding from Eldridge, Access Industries, and Lightspeed Venture Partners. The company could hit $100 million in revenues over the next 12 months based on its current revenue trend, thanks to the gaming boom.
What’s more? The deployment of 5G will lead to the boom in the mobile cloud gaming market. There are currently more than 2.4 billion mobile gamers globally and 5G’s high data availability, network capacity and emerging time-critical communications, and ultra-reliable low-latency communication will bring in more gamers.
5 Stocks to Look Out For
The pandemic-led lockdown has led to a boom in the mobile gaming market and the trend is here to stay even after the pandemic. The more time spent indoors equals to more time spent on digital games. This theory has now put projections of the global market for mobile gaming to reach $153.3 billion by 2027, at a CAGR of 11.5%, per a Reportlinker.com report. Given such positives, we have shortlisted five stocks that deal in mobile gaming and are poised to grow.
Mattel, Inc. (MAT - Free Report) designs and produces toys and consumer products. The company has a deal with NetEase to offer Mattel apps and mobile games, including Pictionary, Hot Wheels Race Off andBarbie Fashion Closet. Its expected earnings growth rate for the current year is 66.7% compared with the Zacks Toys - Games - Hobbies industry’s projected earnings growth of 29.6%.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 20% upward over the past 60 days. Mattel currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alphabet Inc. (GOOGL - Free Report) offers its Google Play platform for android devices where game developers can host their mobile games for users to download. The company’s expected earnings growth rate for the current year is 18.7% compared with the Zacks Internet - Services industry’s projected earnings growth of 5.7%. The Zacks Consensus Estimate for this Zacks Rank #1 company’s current-year earnings has been revised 0.8% upward over the past 60 days.
Playtika Holding Corp. (PLTK - Free Report) develops mobile games and owns a portfolio of casual and casino-themed games. Its expected earnings growth rate for the current year is more than 100% compared with the Zacks Gaming industry’s projected earnings growth of 16.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1.1% upward over the past 60 days. Playtika currently sports a Zacks Rank #2 (Buy).
Activision Blizzard, Inc. develops and distributes content and services on video game consoles, personal computers and mobile devices. The company that belongs to the Zacks Toys - Games - Hobbies industry has an expected earnings growth rate of 5.8% for the current year. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 0.3% upward over the past 60 days. Activision Blizzard currently carries a Zacks Rank #3 (Hold).
Zynga Inc. develops, markets and operates social games as live services played on mobile platforms. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Gaming industry’s estimated earnings growth of 16.9%. The Zacks Consensus Estimate for its current-year earnings has climbed 17.1% over the past 60 days. Zynga carries a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Mobile Gaming Continues to Accelerate: 5 Stocks to Watch
The gaming market continues to grow by leaps and bounds. In fact, it has surpassed the movies and music industry, with all ages and demographic groups spending more and more time in playing and the increasing social interactions via gaming.
Mobile Gaming Boom Continues in 2021
According to Accenture’s estimates released in its new report, the value of the gaming industry already exceeds $300 billion. This includes $200 billion in direct spending on consoles, software and subscriptions, in-game purchases, and mobile advertisement revenues, and another $100 billion from mobile devices, gaming PCs, peripherals, and gaming-related products and services. The wide adoption of smartphones globally, accompanied by high-speed Internet has led to explosive growth in mobile gaming.
Mobile gaming has been home to both casual players and hardcore gamers. The largely free to download option like Among Us, Subway Surfer andHunter Assassin has attracted a huge number of casual players over the past years. While core games like PUBG Mobile, Honour of Kings andPokémon Go have derived solid returns during the pandemic-induced boredom through in-app purchases, casual games found more committed players as they stayed in the games for a much longer session time. Per App Annie’s State of Mobile Gaming 2021 report, casual games led the way in terms of downloads, comprising 78% of all game downloads compared with 20% for core games and 2% for Casino.
Additionally, events drove the most gaming Average Revenue Per User (ARPU) in 2020. Games had monetized customization and players invested a lot of money in customizing avatars and leaderboards. In fact, App Annie’s report highlights that consumer spends in-game events more than doubled to $53 billion. The company also estimates that consumers will spend more than $120 billion this year versus $100 billion spent last year.
Niantic’s hit game Pokémon Go had been forced to convert its real-world event, Pokémon GO Fest, which serves as the biggest annual celebration of the game to go online worldwide. Since 2016, the GO Fest has been held in different parts of the world, with gamers coming in from various countries to play the two-day special event, hauling in huge revenues for the company. However, when lockdowns forced gamers to stay at home, this augmented reality mobile game that requires gamers to walk around had to make massive changes like providing more Pokémons at gamers’ current location, increase gyms and stops and more. Turning the Pokémon GO Fest 2020 online (those who purchased the tickets were allowed to play from their home location) pushed players to spend a total of $17.5 million, the game’s highest revenues since 2016. This year, the game has already announced dates for the Pokémon GO Fest 2021, which can be played from anywhere.
IPO Boosting the Gaming Space
On Apr 29, Electronic Arts Inc. (EA - Free Report) acquired Glu Mobile for $2.1 billion in enterprise value. The acquisition will help Electronic Arts and Glu accelerate the former’s mobile gaming portfolio growth along with building a network of 100 million monthly active players in mobile, and creating a market-leading portfolio of more than 15 top live services across multiple fast-growing genres in the gaming market. Glu’s top games like Covet Fashion, Design Home, Kim Kardashian: Hollywood and MLB Tap Sports Baseball will also be more accessible to global audiences, thanks to Electronic Arts’ wider outreach.
On Apr 15, AppLovin, which owns popular mobile games like Matchington Mansion and Wordscapes, went public on the Nasdaq raising $1.8 billion in the initial public offering (IPO). The company has benefited significantly from the pandemic-led gaming industry boom and has made numerous acquisitions in recent years. AppLovin has a portfolio of more than 200 games and also sells access to its marketing software to other developers, making it easier for them to monetize their applications.
Additionally, several mergers, acquisitions and deals constantly continue to boost the mobile gaming space. Recently, Tripledot Studios, a mobile game studio, raised $78 million in funding from Eldridge, Access Industries, and Lightspeed Venture Partners. The company could hit $100 million in revenues over the next 12 months based on its current revenue trend, thanks to the gaming boom.
What’s more? The deployment of 5G will lead to the boom in the mobile cloud gaming market. There are currently more than 2.4 billion mobile gamers globally and 5G’s high data availability, network capacity and emerging time-critical communications, and ultra-reliable low-latency communication will bring in more gamers.
5 Stocks to Look Out For
The pandemic-led lockdown has led to a boom in the mobile gaming market and the trend is here to stay even after the pandemic. The more time spent indoors equals to more time spent on digital games. This theory has now put projections of the global market for mobile gaming to reach $153.3 billion by 2027, at a CAGR of 11.5%, per a Reportlinker.com report. Given such positives, we have shortlisted five stocks that deal in mobile gaming and are poised to grow.
Mattel, Inc. (MAT - Free Report) designs and produces toys and consumer products. The company has a deal with NetEase to offer Mattel apps and mobile games, including Pictionary, Hot Wheels Race Off andBarbie Fashion Closet. Its expected earnings growth rate for the current year is 66.7% compared with the Zacks Toys - Games - Hobbies industry’s projected earnings growth of 29.6%.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 20% upward over the past 60 days. Mattel currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alphabet Inc. (GOOGL - Free Report) offers its Google Play platform for android devices where game developers can host their mobile games for users to download. The company’s expected earnings growth rate for the current year is 18.7% compared with the Zacks Internet - Services industry’s projected earnings growth of 5.7%. The Zacks Consensus Estimate for this Zacks Rank #1 company’s current-year earnings has been revised 0.8% upward over the past 60 days.
Playtika Holding Corp. (PLTK - Free Report) develops mobile games and owns a portfolio of casual and casino-themed games. Its expected earnings growth rate for the current year is more than 100% compared with the Zacks Gaming industry’s projected earnings growth of 16.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1.1% upward over the past 60 days. Playtika currently sports a Zacks Rank #2 (Buy).
Activision Blizzard, Inc. develops and distributes content and services on video game consoles, personal computers and mobile devices. The company that belongs to the Zacks Toys - Games - Hobbies industry has an expected earnings growth rate of 5.8% for the current year. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 0.3% upward over the past 60 days. Activision Blizzard currently carries a Zacks Rank #3 (Hold).
Zynga Inc. develops, markets and operates social games as live services played on mobile platforms. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Gaming industry’s estimated earnings growth of 16.9%. The Zacks Consensus Estimate for its current-year earnings has climbed 17.1% over the past 60 days. Zynga carries a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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