3 Gaming Stocks to Buy Hand Over Fist Before 2022 Ends

After a harsh year for the stock market, many investors will be happy to see 2022 in their rearview mirror. The tech industry was hit especially hard, with the Nasdaq-100 Technology Sector falling 34% year to date. However, the games market has continued growing, with the biggest names in game consoles continuing to report record sales. 

According to Grand View Research, the $195.65 billion video game industry will see a compound annual growth rate (CAGR) of 14.1% until at least 2030. With the new year around the corner, now could be an excellent time to add a gaming stock to your portfolio. 

Here are three gaming stocks to buy hand over fist before 2023. 

Microsoft

Since the launch of its Xbox brand and console in 2021, Microsoft (MSFT 1.65%) has become a formidable force in the gaming industry. Previously, the market was almost solely controlled by Japanese companies such as Nintendo (OTC: NTDOY) and Sony. As a result, Microsoft had some tough times going. But its gaming business has really taken off in recent years, largely thanks to the success of its Netflix-for-games subscription service, Xbox Game Pass, in 2017. 

From 2020 to 2022, the service grew from 10 million to 25 million subscribers, an increase of 150%. Game Pass has added immense value to Microsoft's Xbox consoles, with the company's strategy of adding its in-house developed titles day-one to the platform. The release method allows people to pay one low monthly fee for access to Microsoft's newest games and an extensive library of others, rather than paying about $60 to play one new game on release day. 

Justifiably, Microsoft has become incredibly motivated to grow its number of game developer subsidiaries to expand its Game Pass library. For instance, the company acquired ZeniMax in 2020 for $7.5 billion, giving it ownership of Bethesda Softworks franchises such as The Elder Scrolls, Fallout, and the upcoming Starfield. 

In 2023, Microsoft hopes to complete its purchase of Activision Blizzard (NASDAQ: ATVI) for $68.7 billion. The deal may not go through because of antitrust concerns. However, if it does, the move will make Microsoft the world's third-largest games company, behind Sony and Tencent.

In its fiscal 2022, Microsoft's gaming revenue increased by 6% to $860 million, with its Xbox hardware revenue rising by 16% "due to continued demand" for its Xbox Series X|S consoles.

The company's gaming business is on an excellent trajectory that's likely to continue expanding in 2023, making now the perfect time to invest in Microsoft before the new year. 

Nvidia 

Nvidia (NVDA 3.65%) experienced a particularly rough year, with its stock plunging 41% year to date. The company suffered from steep declines in the PC market as rising interest rates led to reduced spending in the industry. However, a rough 12 months haven't dampened the company's prospects for 2023. 

While the company is predominantly known in the gaming world for its graphics cards (GPUs), which power millions of gaming PCs worldwide, Nvidia also exclusively provides the processing and graphics for the Nintendo Switch with its system on a chip. 

In November, Nintendo announced its Switch consoles had exceeded 114 million units sold, meaning just as many of Nvidia's custom chips had made their way into mainstream use. Numerous reports have revealed that a sequel to the Switch is in development and could release as early as 2023. If that's the case, Nvidia is in a prime position to profit from the console's sales for the long term.

Nvidia's gaming segment took a hit this year, with revenue declining 51% in its latest quarter to $1.57 billion, primarily because of GPU market declines. However, macroeconomic headwinds will not last forever. In the meantime, Nvidia can look forward to a lucrative partnership with Nintendo and a quickly growing data center business that had revenue growth of 30% to $3.8 billion in third-quarter 2023. 

Electronic Arts

As the leader in sports games, Electronic Arts (EA 0.02%) is home to some of the world's most profitable franchises, such as FIFA and Madden. In 2021, the live service portion of FIFA earned $1.6 billion, up from $1.1 billion in 2018 and not including revenue from individual game sales.

Next year, the company has plans to release several highly anticipated titles in addition to the annual installments of its sports franchises. EA will reboot one of its most successful series with the release of Dead Space in January, a remake of a 2008 title. Additionally, a sequel to its November 2019 game Jedi: Fallen Order will launch in March 2023 after the first game sold over 20 million copies by June 2021, according to its developer Respawn.

Moreover, EA has a swiftly growing mobile games business. In second-quarter 2023, the segment rose 27% to $320 million. The mobile games market is expected to grow at a CAGR of 11.88% until 2028, putting EA in a promising position to profit off the industry's development.

EA is one of the biggest names in gaming. Its 2023 video game slate, profitable sports franchises, and expanding mobile games business make now a great time to invest.