Computer games are a growth market that seems to be shaking off the current crisis with ease. Is this an opportunity for investors? Or is the boom nearing its end? We shed light on the topic and give an overview of investment opportunities.

Overnight nerds who don't leave the house for days on end and live on pizza and coke: The cliché of the typical gamer is outdated. Gaming has long been a huge market that generates billions in sales. And in this country, too: according to the annual report of the German games industry 2020, there are more than 34 million gamers in Europe. At 52 to 48 per cent, the ratio between men and women is almost balanced. And the average age is now 37.5 years.

Gaming shares were the stock market high flyers of recent years

The growth of the computer games industry has been clearly reflected in share prices in recent years. A look at the MVIS Global Video Gaming & eSports Index shows this. It is made up of a total of 25 gaming stocks, including game developers such as Activision Blizzard as well as the graphics card manufacturer NVIDIA. The performance of the index in download exness is impressive: Within the last five years, it has increased by over 370 percent. The increase within the last twelve months was also impressive - it amounted to 53 percent. The gaming index thus outperformed the more general MSCI World IT in both periods: the latter "only" managed 242 per cent and 44 per cent respectively (as of 11 May 2021).

What future growth potential does the industry offer?

Will this boom continue or has the growth potential been exhausted? This question is not easy to answer. One thing is clear: the gaming market benefited like few industries from the Corona crisis - those who stay at home gamble more. This drove up sales and subscriptions.

At the same time, technological progress promises further growth. VR gaming promises great potential here, enabling gamers to immerse themselves completely in virtual worlds with the help of equipment such as VR glasses. Forecasts by the International Data Corporation (IDC) point to this: according to the market research company, the market for VR headsets is expected to grow by 48 percent annually until 2024. The gaming sector will account for a significant share.

Last but not least, the triumph of e-sports could give the gaming industry an additional boost: In addition to streaming platforms like Twitch - which belongs to Amazon - the manufacturers of games and equipment benefit from the advertising effect.

What are the risks of investing in the gaming sector?

The fact that the Corona crisis has really boosted gaming stocks so far does not mean that this boom will continue. After all, computer games are not essential, but "nice to have". An economic downturn in which consumers tighten their belts could hit the industry hard. Exacerbating the situation is the fact that the period of lockdowns and no-contact orders may have led to saturation. When normality returns, people may be more drawn to the outdoors - and not in front of a PC or console.