What Is a Pure Play? Meaning, Pros and Cons, Example

What Is a Pure Play?

By Keith Noonan – Updated Nov 16, 2025 at 12:53 AM EST

Key Points

Pure play companies focus on a single industry, simplifying analysis and potential investment decisions.
Investing in a pure play can lead to high returns if the sector thrives, but risks increase if the trend fails.
Diversified companies mitigate risks across industries, but success in one area may be offset by failures in others.

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Rather than trying to branch into unrelated new business categories to drive growth, Take-Two has concentrated on its area of expertise. In general, this pure play's focus has worked out quite well for the company and its long-term shareholders.

By comparison, Microsoft (MSFT +1.59%) also has a strong position in the gaming industry but offers cloud services, productivity software, and a wide range of other software and hardware products. Video games make up a relatively small portion of the tech giant's hugely successful business, but its operations in the space help strengthen its overall product ecosystem.

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About the Author

Keith Noonan is a contributing writer at The Motley Fool covering technology, consumer goods, and other sectors. He holds a bachelor’s degree in English from Boston College.

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Keith Noonan has positions in Take-Two Interactive Software. The Motley Fool has positions in and recommends Microsoft and Take-Two Interactive Software. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.