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Cape Town - Overberg Asset Management analyst Kirk Swart looks at Pokémon GO and the world of gaming in this week's five shares to watch:
Even though I am not a “true gamer” myself, we have all dabbled in some gaming at one point or another. New Zoo’s global market report in April of this year showed that gaming worldwide is expected to generate approximately $99.6bn in revenues, up 8.5% from 2015.
Of the $99.6bn, $36.9bn can be attributed to mobile gaming. With the global gaming market expected to grow by another $6.9bn in 2017, it’s no wonder that companies such as Naspers have decided to enter the online gaming market.
Lately, Nintedo's Pokémon GO has taken the world by storm. Pokémon GO, a virtual reality game, is played via your cellphone and rewards players for finding a virtual Pokémon. The gaming market is ever changing and companies have to remain relevant and adapt to the faster changing environment.
Below mentioned are some notable gaming companies that have their shares listed on stock exchanges worldwide.
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1. Nintendo
Mario Brothers was one of Nintendo's first breakout games. The company began by selling gaming cards in 1889, and has since grown to become the biggest gaming company worldwide by revenue. Outside of gaming, Nintendo also has a majority interest in Major League Baseball Team Settle Mariners.
Nintendo trades on the Japanese market. The company's share price has seen a lot of volatility the past few weeks as the market tries to analyse the impact of the Pokémon GO craze on its revenue.
The share opened Monday morning 17.7% lower following a release by the company that Pokémon GO's impact on revenue will be limited.
READ: Nintendo shares plunge on Pokemon Go profit woes
2. Atari
Pacman, Donkey Kong and RollerCoaster Tycoon are some of Atari's most successful games. The company, a subsidiary of the French publisher Atari SA, was founded in 1972. Atari is currently the world leader in Arcade games.
Atari SA, who has their shares trading on the French stock market was up 5.26% on Monday following the announcement that they will be partnering with Hip-Hop Legend RZA to release a record based on Atari game music.
3. Electronic Arts
Electronic Arts is the world's fourth largest gaming company by revenue. Based in California, Electronic Arts is listed on the Nasdaq and is trading at $76.33. Electronic Arts are famously known for sports games such as FIFA, Madden, NHL, Tiger Woods PGA, and reality game, The SIMS.
The company is set to release their first quarter 2017 financials on the 2nd of August 2016. It is the consensus among top rated analysts that Electronic Arts will continue to outperform the market.
4. Nvidia Corporation
Even though Nvidia does not produce games themselves, they do play a very important role in the gaming market. The company supplies Graphic Processing Units and Drivers which allow games to run smoothly while giving gamers the best possible viewing pleasure.
Nvidia's best known product is the GeForce line of processors. The company is expanding beyond these processors into its Shield range of gaming tablets and TV's.
Nvidia is trading on the Nasdaq at $54 per share.
5. Sony Corporation
The Sony Corporation, situated in Japan, is a multinational company that offers consumers a wide variety of consumer products, electronics, and gaming services.
Sony's biggest gaming product is its PlayStation consoles. The PlayStation consoles are in direct competition with Microsoft's Xbox and Nintendo's Wii. Sony's PlayStation 4 had the biggest share of the market in 2015 at 17.37%.
Sony is trading in Tokyo at ¥316. It opened trade on Monday morning 1.36% down.
Do you agree with Kirk's stock picks? Send us yours and tell us why.
* Kirk Swart is an analyst at Overberg Asset Management , an Authorised Financial Services Provider (No 783) which specialises in the private management of local and global discretionary portfolios as well as pension products.
Disclaimer: The above article does not constitute financial advice and is not a recommendation. Investors must always seek the advice of professionals and trade with caution. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
