Video games market booming following COVID-19 related lockdowns
The video games market has skyrocketed following the COVID-19 pandemic and subsequent nationwide lockdowns.
As an industry custom-built for people to stay indoors, it is understandable that the global video games market has boomed in the last few months, bringing huge profits for the leading gaming companies and their shareholders, states BuyShares, the trading and finance company.
According to data from BuyShares, the market capitalisation of the six leading video games companies in the world jumped by $354.5 billion between January and June.
With a 28% growth in the total value of shares in this period, the Chinese IT company Tencent has witnessed the most significant rise in market capitalisation, according to the data.
In January, Tencent amounted to $49.03 billion. Then the COVID-19 outbreak triggered a significant drop, with the total value of shares falling to $42.06 billion in March.
However, data shows the next month brought a recovery, with the market cap jumping to $50.96 billion. The upward trend continued in the last two months, with the total value of shares reaching $62.20 billion last week, a $13.17 billion increase in six months.
Founded in 2008 by the merger of US gaming companies Activision and Blizzard Entertainment, Activision Blizzard generated $6.5 billion in revenue last year.
Data shows the market capitalisation of the California-based gaming company best known for its famous game series Call of Duty, amounted to $45.33 billion at the beginning of 2020. Since then, this figure jumped to $58.75 billion, a $13.42 billion rise between January and June.
The world's largest software company and the third-largest video game company, Microsoft, also witnessed a surge in the total value of shares in the last six months.
The company's gaming revenue is primarily generated by Xbox One sales. However, Microsoft also develops video games solo or through partnerships. An example of this is its collaboration with the Swedish video game studio Mojang, now owned by Microsoft, which is known for creating one of the most popular games in history, Minecraft.
Data indicates the Microsoft market capitalisation surged by $311.73 billion in the last six months, growing from $1.21 trillion In January to $1.52 trillion last week.
Electronic Arts, Nintendo, and Sony combined market cap jumped by $16.27 billion. Electronic Arts, an American video game company known for Battlefield series, FIFA Series, Medal of Honor series, NBA Series, and Star Wars series, also witnessed a significant growth in the combined value of shares in the last six months.
Data shows that between January and June, the market cap of this gaming company jumped by $6.25 billion, reaching $38.36 billion last week.
Nintendo, the fifth video games company on this list, has seen its value of shares rising from $50.25 billion in January to $55.93 billion last week, an 11% jump in the first half of the year.
Data shows the company made $11.1 billion from sales of Nintendo Switch last year, the most significant part of its revenue. This figure is expected to rise by the end of 2020, with the Nintendo Switch sales booming amid COVID-19 lockdowns.
However, the company also develops many successful video game series itself. In the middle of the COVID-19 lockdown, Nintendo released its new hit ‘Animal Crossing: New Horizons’, and reported selling 13.41 million copies in its first six weeks.
Another Japanese tech giant, Sony, saw its market cap grow by $4.34 billion in the first half of 2020, rising from $83.56 billion in January to $87.9 billion this July. In 2019, the company reported $20.3 billion in gaming revenue, with most of it generated from PlayStation 4 sales.