While the video game sector has proven to be a somewhat volatile one, investors who bought its top stocks at opportune times -- and held on to their positions -- have seen tremendous gains. The industry has experienced incredible growth over the past few decades, powered by expanding global demand, new technologies, and digital trends. And despite this impressive history, these may still be early days overall.

The interactive entertainment industry is a large, fast-growing market that still has lots of potential. Companies that can continue adapting to -- and shaping -- the demands of that industry are poised to deliver great returns for shareholders. With that in mind, Take-Two Interactive (NASDAQ:TTWO)Tencent Holdings (OTC:TCEHY), Activision Blizzard (NASDAQ:ATVI)Electronic Arts (NASDAQ:EA), and Capcom (OTC:CCOEF) stand out as top gaming stocks for the long term.

These companies look primed to take advantage of key trends and have assets and competitive advantages that set them apart from the field. Investors who want to tap into the video game industry's promising growth trajectory should explore the individual profiles of these stocks in greater detail. But, first, it's worth establishing some foundations about video games and investing in order to put some context around the appeal of these businesses and the space in which they operate. 

A black video game controller set against a purple background.

Image source: Getty Images.

Reasons to invest in the video game industry

Video games make up a large and fast-growing industry that looks primed to continue benefiting from increasing global demand for entertainment. Content is becoming an ever more important part of the product offerings of big tech companies, and massive platform operators including Amazon, Alphabet, and Apple are looking at entertainment as a strategic asset that can bring people into broader ecosystems and keep them coming back. That appears to be a smart approach -- and there appears to be real wisdom in the old phrase "Content is king."

The video game industry has been and continues to be highly competitive, but there's proven demand for its offerings, and it seems almost certain that interactive entertainment will be even bigger in the world of the future. More people play video games today than ever before, and it's likely that the industry will continue to expand and account for an increasing share of the overall entertainment sector.

Young people who grew up on titles such as Nintendo's original Super Mario Bros. (1985) or Capcom's Street Fighter (1987) are in middle age now -- and adults who played games including Asteroids (1979) or Centipede (1980) upon release might be playing in retirement today. Mobile phones have made gaming-capable platforms increasingly ubiquitous, and people of nearly every demographic group are more represented among the ranks of "gamers" than they were a decade ago. Video games have already gone mainstream, and the appeal is only getting broader.

A study conducted by Electronic Entertainment Design and Research found that roughly 211 million Americans played video games in 2018; that's roughly 67% of the population. Globally, somewhere around a third of the Earth's population plays games, and that figure is rising every day. 

Newzoo estimates that the global games market generated roughly $135 billion in sales in 2018, and it expects that number to hit $174 billion in 2021. Interactive entertainment has undeniable momentum and plenty of untapped potential.

Within the broader context of industry growth, it's worth taking a look at some of the specific trends that could power the expansion of gaming and help power performance for leading publishers. 

  • Digital distribution and streaming
    Now that most video game consoles and PC platforms are connected to the internet and feature large hard drives, publishers are increasingly selling their games as digital downloads. This makes games more profitable because publishers don't lose a portion of each sale to retail middlemen like GameStop and Walmart, and it eliminates the need to produce packaging material and handle shipping costs.

    The transition to digital has been going on for a while, but game makers still have substantial room for growth in digital distribution. For example, Take-Two projects that 37% of its current-generation video games will have been sold through digital channels in 2019, up from 34% in 2018. That still leaves a long runway for download growth. 

    The other big advancement in game distribution is in streaming. Interactive experiences can now be streamed to a device in much the same way that you might stream a television show or movie on Netflix. Alphabet's Google division has made a foray into the gaming space with its streaming platform, Stadia, and other big tech players and more specialized game companies -- including Tencent, Sony, and Microsoft -- will make streaming a big part of their offerings. Being able to stream a high-end game through a browser eliminates the need to own hardware capable of running the game, because the actual processing is done through data centers and cloud servers. The rise of streaming has the potential to rapidly expand the addressable market for developers and publishers.

  • Subscription or games as a service
    In addition to more software being distributed digitally, a growing portion of total industry revenue comes from in-app spending and other purchases made after the initial game sale or download. This business model is sometimes referred to as "games as a service" because it moves video games away from being a one-time purchase and toward a more subscription- or microtransaction-focused sales structure. It's a trend that's generally been very favorable for gaming companies, making sales more frequent and more predictable and presenting positive catalysts for profit margins. 

    Virtual goods and currencies are generally cheap for developers to produce, and they can be recreated at virtually zero cost. So, when a player buys virtual currency or an in-game chest filled with items in a "microtransaction," it tends to have a very high gross margin. Many games are now available for free but feature in-game items for sale, making it possible for titles to reach wide audiences and then generate substantial business through this type of microtransactional model.

    The general movement toward the games-as-a-service model has been accompanied by an increasing emphasis on multiplayer-focused experiences. Having titles built around active online modes is beneficial for publishers because it keeps games active longer, which tends to mean more return on the initial development investment.

  • Expansion in international markets
    Gaming has already become far more globally popular over the past two decades. More people play games than ever before, and there's lots of room left for growth. The biggest geographic markets for video games have historically been North America, Europe, and Japan, but the industry has seen rapid expansion outside those territories in recent years.

    The proliferation of smartphones and tablets, rapid economic growth in markets like China and India, and the overall trend toward globalized internet connectivity mean that the gaming population gets bigger every day.

  • Mobile
    Mobile is both the largest and the fastest-growing gaming platform in terms of revenue, accounting for roughly $63 billion of the industry's $135 billion total revenue in 2018. That's particularly impressive because smartphone gaming didn't really take off until 2007 with the release of Apple's iPhone, and console and PC gaming were already well established at that point.

    In a world where everyone has a mobile device, everyone has a gaming platform. That dynamic continues to present a growth opportunity for the interactive entertainment industry and suggests a favorable outlook for content demand.

  • Esports
    Watching other people play video games might not sound like everyone's idea of entertainment, but it's actually a popular activity among the Generation Z and millennial demographics. An industry has sprung up around professional video game matches as spectator entertainment, and this fast-growing content category generated nearly $1 billion in revenue in 2018. Total revenue for gaming-based video content that includes more casual, less competitive offerings is many, many times higher.

    Hundreds of millions of people around the globe already watch esports content, and it has strong audience engagement in demographics that marketers are eager to reach. Esports is a relatively small revenue contributor for most companies at this point, but the industry is growing at a rapid clip and has big long-term expansion potential. Video game companies can form leagues around their big franchises -- generating revenue in team licensing deals, broadcast fees, advertising, and merchandise.

  • Augmented reality and virtual reality
    The gaming industry has already seen one big shift in display technology over the past 15 years: High-quality mobile screens have helped to make portable gaming hugely popular, significantly expanding the size of the gaming market. Growth for augmented reality (AR) and virtual reality (VR) devices could present another shift that creates opportunities for gaming companies.

    VR and AR experiences have long been something of a holy grail in the video game industry, because they can make experiences dramatically more immersive and pave the way for exciting new dynamics. Mobile games like the hugely popular Pokemon Go from Nintendo and Niantic have already successfully brought augmented-reality gameplay to mobile devices, but adoption for dedicated AR and VR headsets has been slow. That said, the hardware and software will continue to improve, headset prices will continue to fall, and there's a good chance that mixed-reality gaming is a category that will see big growth over the next decade.

Key industry headwinds and risk factors

Making and releasing video games comes with risk. Earnings performance for gaming's big players has generally gotten better and more consistent thanks to increased consumer demand, tailwinds from higher-margin digital revenue, and the extension of many games' active lives through online updates, but failure for an important title can still be costly. 

As a category, video game stocks remain relatively high risk compared with categories like utilities and consumer staples -- and with the market as a whole. Investors will often have limited visibility into how upcoming games will perform sales-wise, and investing in video game companies can involve guesswork and embracing uncertainty. With that in mind, understanding risk factors that could shape industry performance is crucial for making informed investment choices in the space. 

  • Roadblocks to in-game monetization growth
    As mentioned above, the growth of in-game item sales has been a driving force in the strong performance of gaming stocks over the last decade. Anything that reduces sales from microtransactions and recurring revenue streams could have a noticeable negative impact on major publishers in the space. This could include consumer opinion -- with players simply deciding that in-game content no longer presents an appealing value proposition -- or actions taken by government bodies to regulate in-game monetization practices.

  • Market oversaturation
    Some investors are concerned that the video game market has or will become oversaturated and that a few big games will dominate the market, making it increasingly difficult for other titles to thrive. Some analysts believe that an example of this dynamic can be seen with the success of Epic Games' Fortnite, a free-to-play title that's enormously popular and is sucking up huge amounts of player time and spending.

    Developing and releasing big-budget, triple-A games is no easy task and tends to require sizable teams of highly talented individuals in specialized roles. These barriers have limited new entrants in the space, and tough competition has caused many gaming companies to fold. However, it's nonetheless possible that the game market will yet be disrupted by a flood of new entrants or shifts in consumer behavior. This could mean that the standard PC or console game that sells for $60 at retail will face diminishing avenues to success, or that the mobile games market will become so crowded that only a handful of titles can generate big profits. 

These risk factors exist in addition to the broader threats posed by economic downturn and the more individualized possibilities that companies will be mismanaged or that their respective product offerings will underperform. 

Helpful metrics for analyzing gaming stocks

In addition to keeping track of a company's sales and earnings and how fast each is growing or contracting, it can be helpful to look at revenue, profits, and other metrics in relation to the company's valuation. Doing this provides a quick way to gauge how much you are paying for a company's sales and profits, and it can help investors determine how much risk and upside a potential investment might have.

It's possible to invest in a strong business that is regularly profitable, but to buy its stock at such an inflated price that its shares continue to lose value over the long term. Accordingly, it's helpful to look at some valuation metrics in order to provide more insight into potential investments. 

  • Price-to-earnings ratio (P/E)
    The price-to-earnings ratio compares how much profit a company makes during an annual period to its share price. It's calculated by dividing the value of the share price by the business's yearly earnings. Shares represent an ownership stake in a company. When that company posts a profit, your shares are generating part of the earnings. 

    Another way of thinking about the P/E ratio is that it tells you how many years of earnings at a given annual rate it would take to match the the stock price at the time of your investment.

    As an example, Take-Two Interactive's price-to-earnings ratio of 20 suggests that the company would pay back an investment in its stock in 20 years -- if its earnings were to stay fixed at 2018's level. However, with most stocks and video game stocks in particular, investors are often looking for earnings growth. That means it's important to be thinking about the business' prospects down the road and whether they're accurately reflected in the stock price.

  • Price-to-earnings-to-growth ratio (PEG)
    When earnings growth happens quicker than expected, the value of the business typically expands quickly as well. Signs that a company is rapidly increasing its earnings typically lead to big stock gains.

    Price-to-earnings-to-growth ratio is a metric for showing how fast a business is increasing earnings relative to its price, and it's calculated by taking the company's price-to-earnings ratio and dividing it by the rate of earnings growth. A PEG ratio of less than 1 can indicate that a stock is undervalued because its rate of earnings growth is not reflected in the share price.

  • Price-to-free cash flow ratio (P/FCF)
    A company's earnings statements can sometimes include one-off events, such as the sale of a business unit or a big investment, and these types of financial events can lead to a skewed view of performance. Free cash flow is a metric that helps to address that issue, and it's calculated by subtracting a company's capital expenditures from its operating profits. FCF can actually provide a wonderful window into a business, so dividing a company's share price by its annual free cash flow can be a preferable way to value a stock. Investors can also look at FCF growth rates in relation to stock price.

  • Digital revenue and digital revenue growth
    The portion of a video game company's sales that come from digital sources tends to be higher margin than the money that originates with brick-and-mortar retail channels. Thus, investors can look to digital revenue and growth to get an idea of how profitable a given business might be in the future. 

These are far from the only helpful metrics when it comes to evaluating video game stocks, and it can be helpful to look at valuations, sales, and earnings in relation to assets, debt, and other dimensions, as well as examining sales trends for particular business units or franchises. But using P/E, P/FCF, and PEG ratios and keeping an eye on the digital sales picture should give you some insight into how a company is valued, and you can then add to this picture by incorporating other stock metrics into your research.

With these basics established, let's get into our look at top gaming stocks to buy in 2019 and beyond. These aren't the only candidates in the space that deserve a look, but building a portfolio around these five companies presents a well-rounded approach to investing in the industry.

Take-Two Interactive

A screenshot from Take-Two Interactive's Red Dead Redemption 2.

Image source: Take-Two Interactive. 

Take-Two used to swing wildly from periods of big profits to periods of big losses because of the costs associated with game development and the fluctuations of release cycles, but today the company is dependably profitable and looks stronger than ever. Much of that transformation was driven by the incredible success of Grand Theft Auto V -- a title from the company's Rockstar Games division that's sold more than 100 million copies since its release in 2013 and continues to generate revenue through the sale of virtual goods in its online mode.

Grand Theft Auto V continues to put up impressive engagement metrics, which suggests the company can count on the game to be a meaningful contributor of high-margin revenue in 2019 and beyond. The company is almost certainly hard at work on a new installment in the hugely successful franchise -- something that's of great interest to investors. Grand Theft Auto remains Take-Two's biggest and most important property and is one of the biggest blockbuster performers in all of entertainment, but the company has also been making commendable progress expanding its franchise slate. 

The company released Red Dead Redemption 2 at the end of 2018, and the title quickly went on to surpass expectations. The adventure game set in the frontiers of the late 19th-century Wild West shipped more than 23 million copies in roughly three months, coming in as 2018's best-selling game and blowing past lifetime sales targets many analysts predicted would be in the range of 15 million to 20 million.

Take-Two's NBA 2K basketball franchise has also continued to gain ground and sets the company up with a growth opportunity in esports. NBA 2K 19 was the third-best-selling game in North America in 2018, and the series is stronger than ever in terms of sales and customer engagement, helping Take-Two post great results across the holiday season. Strong performance from Grand Theft Auto, Red Dead, and NBA 2K together helped the business record historic levels of recurring revenue in 2018, and these franchises look to give Take-Two a strong foundation to build on as it pursues expansion opportunities. 

Take-Two is also making a bigger push into mobile. The company acquired mobile games maker Social Point in 2017, and it's recently mapped out plans to expand the presence of its sports games and launch new original properties. With $1.6 billion in cash against zero debt, Take-Two has a strong balance sheet and could be positioned to make new acquisitions to speed its expansion in mobile and other development avenues. 

Take-Two has managed to capitalize on digital sales growth and sustain impressive momentum to elevate its business. With Grand Theft Auto, Red Dead, and NBA 2K giving the company a strong slate of franchises and lots of untapped growth potential in mobile and other areas, Take-Two stands out as one of the top gaming stocks for 2019.

Tencent Holdings

A screenshot from Epic Games' Fortnite.

Image source: Epic Games.

Tencent is a Chinese multimedia conglomerate that's also the world's largest video game company by revenue. The company's strength in multimedia, its burgeoning cloud infrastructure, and its holdings in other gaming companies, as well as the tie-in advantages available with its dominant WeChat social network, make it uniquely compelling as a diversified investment in technology and content. 

WeChat is China's biggest social media platform, and Tencent owns it in addition to a range of other social media investments. WeChat is like an ecosystem unto itself, combining elements of Facebook, Twitter, video, and e-commerce with third-party mini-apps that are hosted on the platform and available for download (much like those offered on the Android or iOS mobile operating systems). This means that Tencent can actually benefit from third-party games that come to market on its platform: It takes a cut of their sales and encourages the use of its payment services and communication systems, further strengthening its overall product family.

The company counts roughly 1.1 billion monthly active users between its core WeChat and Weixin platforms, and its position at the heart of China's social media user experience bolsters its formidable strength in gaming. Tencent's League of Legends has been going strong since its release in 2009, emerging as a top draw in esports and helping to propel interest in competitive gaming as a spectator sport. Adding to its strength in action-strategy titles, Tencent is also responsible for the hugely popular Honor of Kings, one of China's most successful mobile games. The media giant's strength across different game types is evidence of the strength in its development and publishing assets.

Tencent is also well represented when it comes to the "battle royale" genre that's risen to incredible popularity as it's swept the gaming industry. Battle royale games see huge groups of players competing with each other to be the last player standing on a large open map. They first started rising to prominence with PlayerUnknown's Battlegrounds and then broke through to even greater popularity with Epic Games' landmark Fortnite. Tencent publishes the mobile versions of Battlegrounds, and it also owns a 40% stake in Epic -- one of many strategic investments it's made across the sector. The company owns substantial stakes in video game publishers including Take-Two, Activision Blizzard, and Ubisoft, and is in a development partnership with Square Enix. 

While Tencent is highly diversified in gaming and other areas of tech and media, U.S. investors should keep in mind that it's a foreign company and trades on a foreign exchange, and this does come with some extra risks. Sales and earnings performance can be significantly affected by changes in currency exchange rates, broader economic trends can have a big impact on stock performance, and politics and governmental action can present unexpected roadblocks.

A slowdown in economic growth in China has affected Tencent, and the company has also come up against increased regulatory pressures in its home market, with Chinese regulators taking extra time to grant the release licenses needed to bring new games online. Given Tencent's significant investments across the video game industry, the pressures from the release stoppage are amplified, meaning one of the company's core growth engines has been slowed in the near term. That said, shares nonetheless look to present plenty of long-term upside, trading at roughly 27 times the company's 2018 free cash flow and about 36 times the year's earnings. And the recent challenges could actually present a worthwhile opportunity for long-term investors.

Activision Blizzard

A screenshot from Activision Blizzard's Diablo Immortal.

Image source: Activision Blizzard.

Activision Blizzard is America's largest games company by revenue and combines three main developing and publishing divisions: King Digital mostly does mobile games, Activision has primarily been focused on on console platforms, and Blizzard has been responsible for some of the biggest hits in PC gaming. After half a decade of blockbuster performance, the company's stock hit a rough patch late in 2018 that has continued into this year. However, the business' long-term outlook remains promising, and its stock stumbles have created a worthwhile opportunity for investors looking to build a position in the video game space.

The publisher's shares are valued at just 15.5 times 2018's earnings and roughly 19.5 times free cash flow. Long-term investors should consider building a position in the company even though its sales and earnings will actually lose some ground in the short term. 

Specifically, Activision Blizzard is looking at a transitional year in 2019, with management guiding for sales to fall roughly 19.5% to land at roughly $6 billion and adjusted earnings per share to fall roughly 32% to come in at $1.85 per share. Part of the drop-off is because the Blizzard wing of the business doesn't expect to release a big new game in 2019, but it's also because some key franchises are losing steam.

World of Warcraft was a landmark hit for the company and the industry when it was released in 2004, and it's very impressive that the game still generates significant revenue today, but the title is showing its age and will likely continue to decline. Meanwhile, Activision has dissolved its relationship with Bungie and ended support for the Destiny franchise that they had worked on together after the series' 2017 release Destiny 2 proved to be something of a dud.

The company isn't standing still, however. The three wings of Activision Blizzard are working on bringing the business's biggest franchises to mobile platforms and expanding their reach around the globe. Many of the concerns about the gaming giant's outlook appear to be overblown, and shares have been pushed to levels that offer substantial upside for investors. The company's slowdown and its pivot to mobile present an opportunity to buy an historically well-run company at an opportune valuation as it reorients for its next growth stages. 

New hit properties are needed, and it's not surprising that the stock has been volatile as shareholders have been waiting for them to arrive. That said, Activision Blizzard's catalog remains strong. Call of Duty is still putting up good numbers, with Black Ops 4 charting as 2018's second-best selling retail game. As an early leader in the esports space, Overwatch is a franchise that has lots of promise, and Candy Crush Saga continues to put up impressive numbers. The company also still has underutilized franchises in its formidable catalog of properties that it could reenergize with new releases. 

Activision Blizzard stock looks to offer a good business at a good price, and it's worth holding for the long term.

Electronic Arts

A screenshot from EA's Apex Legends.

Image source: Electronic Arts. 

Electronic Arts was founded in 1982. Today, the company stands as America's second-largest game publisher by revenue -- a testament to its ability to navigate the gaming industry's twists and turns through the years. That doesn't mean there haven't been bumps in the road, and the performance of some of its key franchises has at times had a negative impact on the company's outlook, but there are still reasons to like its long-term prospects despite the challenges.

The Redwood City, Calif.-based video game publisher's business has typically revolved around big sports franchises including FIFA and Madden, but it needs help from other properties to drive growth. The track record has been mixed there, leading to some volatile swings for EA stock. Electronic Arts has faced pressure as key titles, including Star Wars Battlefront II and Battlefield V, have underperformed; even the company's usually dependable FIFA soccer franchise delivered results in 2018 that came in below expectations. 

The stock lost roughly a quarter of its value in 2018, and it currently trades at roughly 21 times the company's earnings for the 12-month period ending in December. So why is EA still a worthwhile long-term play in the video game space? In addition to scoring a major hit with the surprise release of Apex Legends early in 2019, the publisher maintains its strong core-franchise catalog, and it boasts development resources that should allow it to take advantage of many of the trends that will likely power gaming-industry growth in the coming decades.

EA's size and its catalog of established franchises position it to benefit from ongoing growth in digital game distribution and the sale of virtual goods. The company's core football and soccer sports franchises are likely to enjoy an advantage from the increasing popularity of esports, because they have the support and potential for further integration with established professional leagues such as the NFL and the real FIFA. EA also has worthwhile franchises including The Sims, Need for Speed, and Plants vs Zombies that it could use to a greater extent going forward. And it bears repeating that Apex Legends has the makings of a long-term franchise hit.

Apex is the most successful new gaming offering of 2019, and it should deliver strong performance going forward. The game also has real esports potential. It managed to reach 50 million players just a month after release, setting a record pace for an EA game and the battle royale genre.  

There are areas in which EA's execution has left something to be desired over the past decade, but despite some setbacks, the company has made commendable progress in recent years. Electronic Arts remains well positioned to take advantage of ongoing digital growth and other industry trends, and its stock is still worth owning for long-term investors looking for exposure to the video game industry.

Capcom

A screenshot from Capcom's Monster Hunter: World.

Image source: Capcom. 

Video game developer and publisher Capcom is thriving thanks to successful releases that have strengthened its key franchises and propelled its profits to record levels. Like Tencent, Capcom is a foreign company and trades on a foreign exchange, so some of the same additional risks involved with currency fluctuations and political actions apply. But there are many reasons to like this long-standing Japanese business, which has been an industry stalwart for decades since its beginning in 1979. It's helped shape trends, been through good times and bad, and adapted to create some of the industry's most unique experiences. 

While sell-offs hit most video game publishers hard in 2018, Capcom kept an even keel, ending the year with its share price almost perfectly flat. The company's performance was elevated by growth for the Monster Hunter franchise, with the well-received series installment Monster Hunter: World delivering best-ever sales for the business. The title came in as 2018's ninth-best selling game in the North American market and was the best-selling game of the year in Japan. 

Capcom has also been scoring hits with its Resident Evil franchise, releasing new main-line installments and remakes of previous hits in the long-running horror series that have gone on to delight fans and critics. The company is delivering impressive revenue growth and explosive earnings gains (as reflected by its price-to-earnings-growth ratio of just 0.3 for 2018), and there's a feasible path to more success going forward as it builds on the foundations of Monster Hunter and Resident Evil

The Japanese developer and publisher has a strong set of properties beyond those two core pillars, and it owns franchises including Mega Man, Devil May Cry, and Street Fighter in addition to a deep library of lesser-known but still-loved classics. The company has been releasing classics since the days of the original Nintendo Entertainment System, and it's amassed an impressive collection of intellectual properties, some of which could be employed to a greater extent.

Capcom has been smart with its strategy of rereleasing past classics in order to continue profiting from its library. Take the company's Resident Evil 4, for instance. The action-horror title was first released in 2004 and is still broadly viewed as one of the best games ever made. Capcom has ported the game and rereleased it across more than a dozen different platforms, and it's scheduled to release a version for Nintendo's Switch console in 2019. There's potential to continue leveraging its great back catalog and adding to business brought in by new hits.

Capcom also pays a dividend, which is something of a rarity in the video game space. The company aims to keep its payout ratio at roughly 30% of trailing earnings, which means that it plans to return that percentage of its annual profits to shareholders through dividend payments. Profits tend to shift, so this means the company's payouts can be erratic, but management has reaffirmed returning cash to shareholders as a core part of stock ownership. This means that shareholders can look forward to increasingly large payouts from the company if its business continues to prosper -- in addition to the potential for increases in its stock price.

Shares trade at roughly 15 times the company's 2018 earnings, an attractive valuation for a company that's been making great games for 40 years and is demonstrating impressive momentum. 

The gaming industry looks like a long-term winner

Investors should have an understanding of the risks involved with gaming stocks, and they need to be willing to embrace the volatility that tends to come with the industry. But the long-term outlook remains promising. Leading players in the video game biz have the potential to deliver strong performance for shareholders, and these companies should continue to benefit from growth trends that are helping the market to expand around the world.

People love entertainment, and video games offer a range of potential experiences that can prove uniquely compelling. That's a hook that should benefit the overall content category for the next century. While video game companies will probably be hit with some unexpected twists and turns, the entertainment industry has actually proven pretty resilient and adaptive over the years, and there's a good chance that global demand for games will only continue to grow. 

There's still huge potential in the world of interactive entertainment, and for growth-seeking investors, this dynamic means that it's worth adding some gaming stocks to your portfolio.