Mobile gaming continues to gain traction. According to a research report by Technavio, a leading global technology research and advisory company, the mobile gaming market is expected to grow to $66.43 billion by 2026—growth at a compound annual growth rate (CAGR) of 12.26% between 2021 and 2026.
The report also states that 47% of the mobile gaming market’s growth will come from the Asia-Pacific region. Countries like China, Japan, and South Korea could be the key market for mobile gaming.
In addition to this, multiplayer mobile games could be one of the key drivers in helping the growth of the mobile gaming market. Games like MMO and Pokémon Go could gain popularity with the help of smartphone companies launching unique futures such as enhanced displays.1
In other news, Warren Buffett said that Berkshire Hathaway has been building a stake in Activision Blizzard. Berkshire Hathaway recently accumulated 9.5% of Activision Blizzard shares.
Buffett said that he sees this as a merger arbitrage opportunity. He insisted that odds are in favour of a deal closing. His reasoning for buying more shares is that Activision Blizzard’s stock is trading below Microsoft’s offer and acquiring shares at the current levels could mean big returns.2
Roblox Corp., is an online entertainment platform that lets users play games created by other users. Recently, the company registered a loss per share of $0.27 in the first quarter 2022. Revenue for the company came in lighter than expected, as well.
However, the company remains optimistic. In an interview with CNBC, the CEO of Roblox, David Baszucki, said that the company will start seeing bookings increase with user growth. Bookings are defined as sales of the company’s virtual currency. In the quarter ending in March, Roblox reporting a decline of three percent in bookings.
The company is seriously looking into developing alternative sources of sales and new users’ growth for virtual work. It’s planning to push for new search features and looking into simplifying partnerships with brands and growing the amount of user-generated content sold on the platform. Furthermore, Roblox’s future could possibly include being able to connect coworkers in enterprise settings.3
Electronic Arts Inc.
Electronic Arts Inc., is a global leader focused on developing, marketing, publishing, and distributing games, content, and services for game consoles, PCs, mobile phones, and tablets. Recently, the company said that it will end a three-decade partnership with FIFA.
The company’s well-known FIFA video game will now be known as EA SPORTS FC.
Cam Weber, EVP and group GM for EA Sports & Racing, said in a statement that the independent platform will bring new opportunities to innovate, create, and evolve. While the name will change, the game will have most of the teams and players that have made it popular. Electronic Arts was able to keep the teams and players through separate licence agreements with soccer leagues in England, Spain, Italy, Germany, the U.S., and the UEFA.4
HERO ETF: Investing in the Growing Gaming Industry
Interested in a diversified approach to investing in video games? Evolve E-Gaming Index ETF (TSX Ticker: HERO) may be a good investment option for you. HERO ETF gives investors access to equity securities of companies, listed domestically and globally, with business activities in the gaming industry. This ETF invests in companies involved in hardware, software and services relating to the electronic gaming industry. Learn more about this fund by clicking here.
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- “Mobile Gaming Market Size to grow by USD 66.43 billion | 47% of the growth will originate from APAC | Technavio,” PR Newswire, May 19, 2022; https://www.prnewswire.com/news-releases/mobile-gaming-market-size-to-grow-by-usd-66-43-billion–47-of-the-growth-will-originate-from-apac-technavio-301550272.html.
- Miao, H., “Warren Buffett says Berkshire owns 9.5% of Activision Blizzard shares in merger arbitrage bet,” CNBC, April 30, 2022; https://www.cnbc.com/2022/04/30/buffett-berkshire-owns-9point5percent-of-activision-blizzard-shares-in-merger-arbitrage-bet.html.
- Leswing, K., “Roblox CEO says April bookings are starting to turn around after a difficult March,” CNBC, May 11, 2022; https://www.cnbc.com/2022/05/11/roblox-ceo-david-baszucki-says-bookings-are-turning-around.html.
- Iyengar, R., “EA Sports will end its video game partnership with FIFA,” CNN, May 10, 2022; https://www.cnn.com/2022/05/10/tech/ea-sports-fifa-partnership-ending/index.html.