While companies such as Nintendo, Sony (SONY 1.10%), and Microsoft (MSFT 0.37%) dominate the video game space, investing in smaller companies that contribute to the $195 billion industry could be a great way to profit off the market's growth. According to Grand View Research, the video game industry will see a compound annual growth rate of 12.9% until at least 2030.

Advanced Micro Devices (AMD -0.35%) and Warner Bros. Discovery (WBD -0.71%) each play crucial roles in video games, with one company providing key components to consoles and the other developing some of the industry's most anticipated games.

Along with other promising parts of their businesses, AMD and Warner Bros. Discovery are under-the-radar gaming stocks you can buy now and hold forever. Here's why. 

Advanced Micro Devices

AMD is best known in the video games market for its contribution to PC gaming as one of the leading sellers of graphics cards (GPUs), which power gaming PCs worldwide. Its reputation in the GPU industry has dragged AMD's stock down 57% in the last 12 months as GPU sales slumped to a 20-year low in 2022, according to Jon Peddie Research.

However, AMD is more than its GPU business. The company is also a key player in consoles, powering some of the world's best-selling gaming machines with its system on a chip. In 2020, AMD became the exclusive provider of graphics and processing in Microsoft's Xbox Series X|S console and Sony's PlayStation 5. Both consoles have gone on to be incredibly successful for their respective companies, with the PlayStation 5 hitting 25 million units sold in November and the Xbox Series X|S selling 17.16 million.

In the third quarter of 2022, AMD's gaming segment saw revenue grow 13.7%, earning $1.63 billion, largely thanks to its console partnerships.  Numerous reports have revealed that Sony and Microsoft are expected to release beefier versions of their 2020 consoles within the next two years. The release of upgraded versions would prompt many people to replace their current consoles, which would be especially lucrative for AMD.

In addition to consoles, AMD is home to a booming data centers segment, which saw revenue rise 45% year over year to $1.6 billion in Q3 2022 and earned the largest portion of revenue. As a result, the company offers investors a diverse business that may have stumbled in 2022 but will likely flourish over the long term. 

Warner Bros. Discovery 

Warner Bros. Discovery has featured in many headlines over the last year after making drastic restructuring moves in its streaming and film/TV businesses. As a result, many might not realize that the entertainment giant is also a keen game developer. In 2022 alone, the company released LEGO Star Wars: The Skywalker Saga, MultiVersus, and Gotham Knights, all available on Xbox and PlayStation consoles, as well as PC. 

Gaming paid off for Warner Bros. Discovery in 2022. The company saw content revenue rise 3% to $2.6 billion in the second quarter, which it primarily attributed to high gaming revenue from the release of LEGO Star Wars: The Skywalker Saga. 

While revenue for its free-to-play live service game MutliVersus hasn't been released, the title hit 20 million players in August after launching on July 19. With the use of microtransactions and ads, live service games have become an incredibly lucrative part of the industry, and MultiVersus is off to a promising start.

In the new year, Warner Bros. Discovery has plans to release the highly anticipated Harry Potter-themed Hogwarts Legacy in February and Suicide Squad: Kill the Justice League later in the year. 

Controversial restructuring decisions and the hefty cost that came with them dragged down Warner Bros. Discovery's stock 63% in 2022. However, its average 12-month price target among analysts of $20.63 per share is 117% higher than its current stock price of $9.48, suggesting it's a stock worth considering.

With a price-to-earnings ratio of 10.60 as of Dec. 29, Warner Bros. Discovery is a bargain and a great gaming stock to hold indefinitely.