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The U.S. videogame industry has been on a high ever since the COVID-19 outbreak. With millions locked inside their homes, people continue to spend more on console games and hardware as the pandemic has left them with fewer choices of entertainment.

According to the latest data from International Data Corporation (IDC), the global gaming PC and monitor market hit a new high in 2020 as shipments saw a record jump in 2020. Moreover, spending on video games jumped in the first two months of 2021, marking one year of continued gains amid pandemic-related disruptions.

Gaming PC Shipments Hit New High

According to the latest report from IDC, gaming PC and monitor jumped 26.8% year over year in 2020 to a whopping 55 million units. Growth rate, both in terms of units and percentage, was the fastest and highest since IDC began tracking the market in 2016.

The higher numbers were driven by the pandemic-induced lockdown that left people with not many choices of outdoor entertainment. This saw people shelling out huge money on video games and hardware.

According to IDC, gaming notebooks emerged as the biggest draw in terms of volumes. Shipments of gaming notebooks grew a record 26.9% in 2020. Gaming monitors also hit a new high, growing 77% from 2019, with shipments reaching 14.3 million units.

Moreover, North America and Europe combined took over the Asia Pacific as the largest market for gaming PCs and monitors for the first time.

Videogame Industry on a High

According to an earlier report from NPD Group, videogame sales reached $56.9 billion in 2020 in the United States alone, jumping 27% from 2019. The pandemic saw millions stuck in their homes with not too many options for entertainment. This saw them shelling out more on gaming consoles and other accessories and software, thus making it a great 2020 for the videogame industry.

According to IDC, the gaming market will remain a bright spot although it predicts the gaming monitor market to slowly fade away in favor of notebooks. However, it expects the gaming monitor market to witness a five-year CAGR of more than 10%. 

One year down the line, despite three COVID-19 vaccines being rolled out, the situation hasn’t changed much as new cases are still being reported and fears continue to escalate. The situation thus is likely to favor the gaming market in the near term.

Our Choices

The videogame industry has started 2021 on a high note, given that the pandemic is still keeping people indoors and is likely to result in surging sales in the coming days. This thus makes it an opportune time to invest in gaming stocks that are sure to gain in the near term.

Microsoft Corporation (MSFT Quick Quote MSFT - Free Report) is one of the leading videogame makers and manufactures hardware and accessories. The company has been expanding its footprint in the industry and recently announced that it will be acquiring videogame maker ZeniMax Media.

The company’s expected earnings growth rate for the current year is 28%. The Zacks Consensus Estimate for current-year earnings has improved by 0.4% over the past 60 days. Microsoft carries a Zacks Rank #2 (Buy).

Sony Corporation (SONY Quick Quote SONY - Free Report) designs, manufactures, and sells several consumer and industrial electronic equipment. The company’s product roster comprises audio and video equipment, televisions, displays, semiconductors, electronic components, gaming consoles, computers and computer peripherals, and telecommunication equipment. 

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 5.6% over the past 60 days. Sony sports a Zacks Rank #1 (Strong Buy).

Electronic ArtsInc. (EA Quick Quote EA - Free Report) is a leading developer, marketer, publisher, and distributor of interactive games (video game software and content). It distributes its gaming content and services through multiple distribution channels as well as directly to consumers (online and wirelessly) through its online portals.

The company’s expected earnings growth rate for next year is 9.4%. The Zacks Consensus Estimate for current-year earnings has improved 6.5% over the past 30 days.  Electronic Arts has a Zacks Rank #3 (Hold).

Activision Blizzard, Inc. (ATVI Quick Quote ATVI - Free Report) is a leading developer and publisher of console, online and mobile games. The company’s Call of Duty is one of the most popular gaming franchises globally. Its Overwatch League can be considered a pioneer of the e-sports concept.

The company’s expected earnings growth rate for the current year is 5.8%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past 30 days.  Activision Blizzard has a Zacks Rank #3.