There’s little doubt there’s been a resurgence in video games since the onset of the pandemic. The industry had an epic run going back more than a decade and was consolidating before the stay-at-home orders and lockdowns breathed new life into the adoption of gaming. With the next generation of players entering the fold, video games are more popular than ever before, leading some investors to wonder which stocks offer the greatest upside.
On this clip from Motley Fool Live, recorded on Feb. 8, “The Wrap” host Jason Hall, Fool analyst Auri Hughes, and Fool.com contributor Danny Vena discuss several ways to invest in the trend.
Auri Hughes: What are the two or three favorite stocks in the gaming industry? Several Motley Fool analysts have described this as the big new industry.
For me, a little bit of a cop out, but I’m going to do Amazon (NASDAQ:AMZN) because Amazon owns Twitch. Video game streaming as a huge phenomenon where I guess people like to watch other people play video games. It’s completely new. This is completely. [laughs]
Jason Hall: I used to roll my eyes about that, Auri. But then I remembered that there are also people that watch people play golf so.
Hughes: [laughs] Fair enough. This is one of those things that makes me feel old because I’m like, “Man, I thought we’d just wanted to play the video games,” but now you can be so incredibly skilled at video games, just like a pro athlete. There’s entertainment and watching it.
Amazon owns Twitch. I think there’s going to be a lot of potential there for that platform. That’s a nice way to get exposure to that.
Then another one I’ll throw out there is Take-Two [Interactive] (NASDAQ:TTWO). Take-Two, they work on masterpieces of games. They just work on a game and perfect it and then they release it ever. Do you not agree with that?
Hall: No, apparently, I activated Tim Sparks’ Siri HomePod. His HomePod somehow. [laughs].
Hall: [laughs] I was reading the comments, I apologize.
Hughes: Yeah, no problem. They work on games for a long time and then they’re essentially masterpieces. Grand Theft Auto, Red Dead Redemption, these are some of the games that come out of that factory. Then, this business just prints cash. They’re known for those games.
Hall: Incredible company.
Hughes: That might be a nice one to get exposure with. It’s in our universe and a lot of smart people like it.
Hall: Yeah, that’s a company I slept on and I never bought. I probably should just go ahead and buy, but I do like. They have some of the best console games. They’re just so high-quality.
Danny Vena: Coincidentally, I was going to say I’m a longtime shareholder of Take-Two, and I absolutely agree with Auri’s assessment. They’re going for huge games that will last for decades. How long has Grand Theft Auto been around? They’re on the next iteration of Red Dead Redemption. I’m also a little bit partial to Activision Blizzard (NASDAQ:ATVI), which I just talked about.
Hall: All three of those companies: Activision Blizzard, Take-Two, Amazon, just really cash cows.