Pac-man, the Mario Brothers, and Donkey Kong - most of the readers would know these names well, and quite a few would have also played games featuring these characters. Early video games were mainly targeted at arcades and slowly evolved to consoles in the ’80s. Handheld devices became more popular in the ‘90s. Consoles with superior processing power became the norm in the 2000s and continue to remain popular. With the advent of smartphones, mobile games have become as widely played as console and PC games, if not more. Games have come a long way from their arcade beginnings and are now a more significant industry than music and movies.

The videogaming and movie ecosystems have also come together in some cases, with many movies and TV shows being adapted from games, and vice versa.
The gaming ecosystem spans several related industries, such as merchandising and theme park rides. The gaming market size has increased and boasts some impressive numbers.

Major players:
Games can be broadly categorized into Console-based, PC games and mobile games. Another classification is by the type of games, say, role-playing, which includes battle royale games like Fortnite and PUBG and massive multi-player online role-playing games (MMORPG) like Dungeons and Dragons. The classification would include non-role-playing games like Resident Evil and Call of Duty and arcade games like Candy Crush Saga.
The major players in the gaming industry are console manufacturers, game developers and publishers, and mobile platforms that offer services. Japanese companies have had a dominating presence in the industry right from the '80s and continue to hold significant sway.

Sony is one of the top players in the industry with consoles, content, and network. The company’s PlayStation 4 has sold more than 114 million units. The next iteration, PS5, comes with artificial intelligence and advanced virtual reality features and has already sold close to 9 million units since its launch in November 2020. Sony is also a major game publisher and collaborates with game developers to convert games into movies and TV shows. The PlayStation ecosystem is now cloud-based as well and offers a subscription service for players.
Nintendo and Sega Sammy are other Japanese companies with significant influence in the industry. Both these companies were publishers of some of the earliest hit titles, such as Mario and Sonic. Nintendo has a console business and is popular in mobile games as well.

Microsoft is a dominant player in the console market, and its Xbox One and Xbox 360 have sold over 50 million and 84 million units, respectively. The firm’s game studio has also developed hit games like Flight Simulator, NFL series, and Halo. Microsoft also has a large universe of PC games. The Xbox too is available on the cloud and available for interactive and multi-player games.
Stand-alone game publishers hold equal clout on the market and are owners of influential franchises. Some of the top names here include Activision Blizzard, Electronic Arts, Zynga, and Take-Two Interactive. Apple and Google are dominant in the platforms for mobile games.

Activision Blizzard is the owner of top-selling titles such as Call of Duty and Guitar Hero and the hit MMORPG game World of Warcraft. The firm clocked $8.09 billion revenues in 2020.

Electronic Arts is another major game publisher. This firm’s hit titles include Battlefield, Need for speed, and several sports titles like FIFA, NBA, and NHL. EA had $5.5 billion in 2020 revenues.

TakeTwo Interactive is the third major American publisher with hit titles including Bio Shock, Borderlands, and the Grand Theft Auto series. TakeTwo had $3.10 billion in revenues for the year 2020.
Role-playing games have always been popular since their early days. In the past few years, though, that segment has seen accelerated growth. The Battle Royale-style games where a group of online contestants plays till only one of them survives are immensely popular. Games like Fortnite, PUBG, and the recently launched Warzone have millions of users. The following charts shows their growth.


Roblox is a revolutionary company that has taken the role-playing genre to the next level, where most of the games on its platform are user-generated, spanning themes.
The two major smartphone operating systems play a crucial role in the proliferation of mobile games. The offering of in-game purchases is a multi-billion dollar industry. The two dominant companies, Apple and Google parent, Alphabet, generate tons of revenues from their commissions on these sales.
According to data from Statista, each payer made 1.5 transactions on average in the year 2020, spending $7.24 on each of those transactions, on average.
Esports and streaming – new paradigms
In addition to mainstream sports, video games are also becoming an essential source of entertainment. Many games are played competitively, and top performers earn big bucks playing video games professionally. The streaming of video games is equally lucrative. More than 600 million people watched games that were live-streamed in 2020, and this number is expected to grow to 920 million by 2024, according to data from Newzoo.
Top companies involved in the game streaming business include Google, Amazon, Sony, and Microsoft. Amazon acquired the popular streaming platform Twitch for $970 million in 2014. Netflix recently announced they would have video games available on their platform.


Huya, based in China and listed on the NYSE, is one of the largest game streaming companies in China. It is backed by both Tencent and JOYY.
The streaming business has also attracted companies that would like to use these platforms as an advertisement medium. For instance, Tesla has tied up with PUBG whereby the virtual environment in one of the game’s locations would be a Tesla factory. Virtual versions of the automaker’s models would also be available on it. Similarly, the Italian supercar maker, Ferrari, would feature its virtual models on PUBG’s rival game platform Fortnite.
Market performance:
Several companies associated with the gaming industry are publicly listed at different exchanges across the world. Quite a few are based out of Japan and South Korea and are popular stocks in those countries. Quite a few are primarily listed in the U.S. The chart below gives a snapshot of the recent performance of some of the companies we have covered in this blog.

Evolving trends and the path to the future:
The gaming industry is evolving rapidly and would likely to continue to do so in the future. Some of the cutting-edge scientific and technological features, such as AI and alternate reality, are already mainstream in games. Augmented reality is already prevalent among gamers, as seen in the cult status of the Pokemon Go game, where gamers hunted for virtual characters in real locations. The new PlayStation comes equipped with artificial intelligence that can play alongside human players. Virtual reality is also becoming mainstream, with many companies making hardware that can enhance this effect. Oculus, HTC, and Sony PlayStation are some of the top hardware makers in this field.
User-generated content is another trend to look forward to in this industry. Roblox is already making waves in this field. Pieces of the game industry are being incorporated into other sectors too. Many banks and trading platforms are exploring incorporating game-like simulations to understand customer behaviour and risk profiles.
Those seeking to invest in the gaming industry can either invest directly into the stocks or through an ETF such as the VenEck Vectors Video Gaming and eSports ETF (ESPO). Globalise customers also have access to the Future innovation Globe, where gaming is one of the key themes.