Video games are so passé. Sure, millions of people spend billions on them every year, but traditional console and PC games can only be played on an expensive console at home and glued to a screen for hours at a time. With the rise in popularity of virtual reality, gamers are retreating even further into their homes and away from the real world.
Where’s the fun in that?
That’s why mobile games exist. If you want to play games and move about, you can do so on your phone or tablet. Instead of buying $60+ games, most mobile games are free or under $10. If you want extra content in your mobile games, you only need to pay for what you need. When you don’t want to play a game, you simply exit from the app and go about your day. They’re easy, accessible, and just as fun, which is why hundreds of millions of smart phone and tablet owners spend billions on mobile games each year.
Like console games, you can actually invest in the mobile game space, as a few key companies are publicly listed on worldwide stock exchanges. But should you invest in them? Let’s take a look.
Many major mobile game companies are owned by video game companies.
Activision Blizzard ($ATVI) owns King, makers of the ever-popular Candy Crush games. In 2014, the company made $2.26 billion in revenue just from mobile games. Candy Crush titles continue to be some of the most played and purchased games on mobile platforms. Vivendi ($VIV) owns 96% of French developer Gameloft, a company known for making action-packed games and tie-in titles for console games. If you wanted to invest in either of these companies, you would have to invest in their parent companies.
Glu Mobile and Zynga are two publicly traded mobile game companies known for licensed and original properties.
Zynga ($ZNGA) is known for their once-famous FarmVille Facebook/mobile game. The company purchased countless mobile development companies several years ago, including the makers of the popular Words With Friends game. Glu Mobile ($GLUU) is known for all sorts of licensed games, like Kim Kardashian: Hollywood, several Call of Duty mobile games, and games based on popular cartoons.
Unfortunately, both companies are struggling to stay afloat. Zynga went through numerous layoffs in the last couple of years, and Glu’s stock lost over 16% of its value last year. They’re still raking in in-app payments in the millions, but not as much as they were during their heyday.
Supercell, makers of the Clash of Clans games, is owned by Tencent, a Chinese media company.
Tencent owns numerous popular Chinese apps and entertainment brands, but Supercell, a Finnish company, was a sound investment for them. The Clans games are some of the best-grossing games on iOS and Android app stores, making billions a year on in-app purchases. Chances are you probably know someone who plays the games and spends money on them fairly frequently.
Should you invest in mobile game companies? Glu and Zynga are selling for a fraction of what they were once worth. It’s worth noting that Glu has performed fairly well since the beginning of 2017.
If you think the mobile game space will only continue to bring in billions from users paying for more content, you might want to look at Tencent, Activision Blizzard, and other owners of mobile game publishers. If you think traditional video games are where the money’s at, you can always invest in that, too. Just be sure to always to your research before you start investing.