The video game industry has a long history of innovation and growth. Where players used to spend their money buying physical game discs in stores, games are now delivered at lower cost directly to players over their PC, console, or mobile device.

The emergence of cloud gaming services will make interactive entertainment even more accessible for millions around the world. It's a great opportunity for game producers, as well as companies selling gaming controllers and other accessories.

What follows are two timely stocks to buy that could be poised for both near- and long-term gains.

1. Activision Blizzard

Microsoft's acquisition of Activision Blizzard (ATVI) in an all-cash deal for $95 per share is looking increasingly likely to receive approval from regulators. With the stock trading at around $85, investors can potentially lock in a 12% return by buying the stock today, although it's still not a done deal yet.  

The addition of Activision's top video games to Microsoft's Xbox Game Pass service would significantly bolster the software giant's gaming division, which is anchored by its Xbox console and Windows gaming business. However, the U.S. Federal Trade Commission has already authorized a complaint against the proposed merger, so it's still possible the deal could fail.  

If the deal doesn't receive a thumbs-up, buying Activision stock would still be a win-win for patient shareholders. Investors would still own a very profitable game producer with tremendous opportunities for long-term growth.

Activision makes some of the industry's best-selling games, most notably Call of Duty and World of Warcraft. Across all games on console, PC, and mobile, the company ended 2022 with 371 million monthly active users. When you have that many players engaged with these titles with a credit card within reach, you won't be short of moneymaking opportunities.

Because most of Activision's revenue is generated from players spending money on add-on content while playing a game, the company generates stable revenue and free cash flow every year. The company even pays out a small percentage of its roughly $2 billion of free cash flow in dividends.  

The massive popularity of Call of Duty and its impact on the competitive landscape in Microsoft's hands has been a key point of scrutiny by regulators across several jurisdictions. But regulators in Japan and the U.K. recently dropped some of their concerns over the business combination's potential to harm competition. The market has viewed this news as a big step toward the deal's closure.

The stock is up 7.5% over the last month, as investors see a greater than 50% chance the deal will be completed, which could happen by the end of June, as Microsoft originally expected. 

If you're interested in locking in a 12% return in the next few months from a probable catalyst coming to fruition, now's the time to buy.

2. Corsair Gaming

The gaming opportunity goes beyond selling games. There's a big opportunity for leading peripherals brands that design and manufacture technical-oriented accessories, such as controllers, headsets, gaming keyboards, and mice. Corsair Gaming (CRSR -13.79%) is a leading brand in the $4.4 billion gaming peripherals market, according to Expert Market Research, and the volatility in the stock gives long-term investors the chance to buy shares on the cheap.

Many gamers rushed to buy gaming gear at the start of the pandemic. That caused a windfall for Corsair's business in 2020, but inflation, supply issues across the gaming hardware market, and the reopening of the economy coming out of the pandemic weighed on the business in 2022.  

The stock tumbled to new lows, but Corsair is not done growing. In fact, 2023 could be a much better year for the company. Corsair turned in a strong fourth-quarter revenue performance, with the top line advancing 28% over the third quarter. 

The oversupply issues that hurt sales earlier last year appear to be over. Corsair avoided the heavy discounting in the holiday quarter with strong sales of SCUF controllers, driven by the launch of Activision's Call of Duty: Modern Warfare 2. Popular new releases from top game producers can be a strong growth catalyst for the company over the long term.

On a price-to-sales basis, the stock is trading at a small premium to its 2020 initial public offering price. It looks even cheaper comparing its current share price to 2021 adjusted earnings per share of $1.45, when business conditions were stronger. That's an attractive price-to-earnings multiple of 12.6 -- about half what the average business sells for.  

With global sales of gaming peripherals expected to increase at a compound annual growth rate of 8% through 2028, according to Expert Market Research, Corsair looks undervalued based on its prospects to grow along with the industry.