Video games have never been more popular, and strong performance from gaming companies amid this year's coronavirus-related volatility has highlighted interactive entertainment's appeal as a resilient growth industry. Research from GlobalData anticipates that annual video game revenue will climb from $131 billion in 2018 to $300 billion in 2025, and the category will still have a long runway for expansion past the end of that projection period.

If you're looking for investments that offer a rare combination of defensive value and big growth potential, the video game industry is one of the best places to be right now. Here's why Huya (NYSE:HUYA), Zynga (NASDAQ:ZNGA), and Glu Mobile (NASDAQ:GLUU) stand out as the space's best stocks to buy this month. 

A person holding a video game controller.

Image source: Getty Images.

1. Huya

Huya is a China-based tech company that provides a platform for streaming gaming video broadcasts and commentary. Video games have become enormously popular as spectator entertainment content, and the category is already one of the most widely watched genres of videos on the internet.

Viewers donate to their favorite streamers and Huya takes a cut of the donation. The company also hosts and broadcasts its own esports events and generates a small, but fast-growing, portion of its revenue from advertising. The business is in a great position to grow with rapidly increasing viewership and monetization opportunities for casual and professional esports gaming broadcasts.

Business Insider Intelligence expects that the total global viewer base for esports alone will have grown from 454 million people in 2019 to 646 million in 2023, and viewership for casual gaming video content should be even higher. Huya's leading position in the overall category puts it in position to capitalize on the content's rapidly growing audience.

The company's valuation looks downright cheap. Its stock trades at roughly 28 times this year's expected earnings, but the company's forward price-to-earnings-growth ratio of just 0.2 highlights just how fast the business is growing. Huya's non-GAAP (adjusted) net income climbed 100.7% last quarter, and sales for the period rose 47.8% to reach $340.6 million. 

The stock's discounted growth stems, in part, from concerns about moves from China's government to regulate online content in the country. However, Huya's business has still been posting fantastic growth, and the company has been making fast progress on building its audience in other territories. The stock has big breakout potential.

2. Zynga

Zynga stock has climbed roughly 56% year to date, and shares still look attractive at current prices. After seeing its audience and sales erode as casual gaming audiences moved away from in-browser platforms, the developer and publisher has successfully reinvented itself as a mobile-focused business. Zynga has pulled off an impressive comeback, and long-term tailwinds from the growth of the global gaming industry should add to the impact of the smart moves it's made in recent years.

Honing the content and release timing for updates for its core video game franchises has been a big factor in the company's success. Zynga Poker, for example, was first launched in 2007 and is still generating significant engagement and sales today. Launching hit new titles in the mobile games market is difficult because of how much competition there is, but a hit game with a long life cycle can be incredibly lucrative. 

A collage of images from Zynga's gaming franchises.

Image source: Zynga.

Successful acquisitions have been the other main component of Zynga's success. The publisher recently completed its acquisition of Peak Games (the Turkish developer known for Toon Blast and Toy Blast), closing a $1.8 billion deal that marked the company's biggest-ever acquisition and is expected to boost its daily mobile user base by more than 60%. If Zynga can help extend the life cycles for Peak's popular titles, the deal should wind up being a big win for the company. 

Zynga trades at roughly 30 times this year's expected earnings. The company still has a strong balance sheet, which could pave the way for more acquisitions, and its growth could accelerate dramatically with the introduction of hit new franchises. 

3. Glu Mobile

Glu Mobile shares quite a few similarities with Zynga. Both developers are focused on releasing casual games for mobile platforms. The companies are led by CEOs who worked together at Electronic Arts: Zynga's Frank Gibeau was president of the gaming giant's mobile division and Glu's Nick Earl served as the division's senior vice president. And both CEOs were tasked with getting their respective businesses back on the path to consistent sales growth and profitability. 

Glu's turnaround project is at an earlier stage than Zynga's, but the smaller company could actually have greater growth potential. While Zynga has seen its market capitalization skyrocket from roughly $2.5 billion three years ago to over $9 billion today, Glu Mobile is still solidly in small-cap territory at roughly $1.6 billion. That's a valuation that leaves plenty of room for growth if the company executes at a high level amid ongoing expansion for the overall gaming industry. 

The business' path to big growth looks pretty similar to what Zynga has pulled off over the last few years. Releasing well-received updates for core franchises including Design Home, Covet Fashion, and Tap Sports Baseball should give Glu a solid baseline performance, and it looks like the company may be gearing up for an acquisitions push.

The game publisher ended its last quarter with a net cash position of roughly $115 million, and it recently completed a share offering that raised approximately $138.75 million. The press release announcing the pricing of the common stock noted that the proceeds may be used for acquisitions and strategic transactions, so it wouldn't be surprising to see news that the company has snatched up a promising development studio in the not-too-distant future. 

Glu stock trades at roughly 29 times this year's expected earnings. If Glu can maintain performance for its core games and deliver just one hit new property, its valuation could soar.