Stock prices in the video game and interactive entertainment industry soared during COVID stay-at-home orders. In 2022, stock prices came down across the board. As the global economy heads towards a potential recession now is the time to evaluate company valuation. To track the overall video game industry, DFC has launched the DFC Intelligence Video Game Stock Index.
Introducing the Video Game Stock Index
The initial index consists of 33 public companies representative of the high-end global video game industry. These companies are a mixture of pure play video game publishers, hardware manufacturers, and global conglomerates.
The index is focused on the premium high-end game market. Pure mobile companies, gambling, NFTs, and bitcoin-focused companies are not included. Of course, the index is subject to change both via mergers (for example Microsoft/ATVI) and new companies being added.
Be sure and go here to see the latest companies included in the index.
A Weak 2022 Leads to Strong Potential in 2023
Across the board, the year 2022 was not good for video game stocks. Setting January 2022 as a base of 100, the average stock in the index was at 70 by the start of 2023.
Of course, this mirrors the overall stock market which was down across the board. The NASDAQ, which is heavy on tech stocks also fell 30%.
DFC Intelligence Video Game Stock Index January 2022 to January 2023
| Company | Stock Price Start of 2023 | % Change |
|---|---|---|
| Capcom | 136.5 | 37% |
| Nexon | 117.5 | 17% |
| Paradox Interactive | 117.0 | 17% |
| Activision Blizzard | 114.7 | 15% |
| Start of 2022 | 100 | 0% |
| Konami | 100.0 | 0% |
| Sega Sammy | 98.9 | -1% |
| Electronic Arts | 91.5 | -8% |
| Nintendo | 89.8 | -10% |
| Square Enix | 87.0 | -13% |
| Bandai Namco | 81.4 | -19% |
| NetEase | 77.3 | -23% |
| Tencent | 76.9 | -23% |
| Logitech | 75.3 | -25% |
| Microsoft | 72.2 | -28% |
| Apple | 69.1 | -31% |
| NCSoft | 65.7 | -34% |
| Corsair | 62.4 | -38% |
| 61.8 | -38% | |
| Sony | 60.7 | -39% |
| Ubisoft | 60.7 | -39% |
| CD Projekt | 59.7 | -40% |
| Take-Two | 57.7 | -42% |
| Disney | 56.8 | -43% |
| Embracer Group | 50.4 | -50% |
| Amazon | 50.4 | -50% |
| Netflix | 49.4 | -51% |
| Nvidia | 47.6 | -52% |
| AMD | 42.6 | -57% |
| GN Store Nord | 41.4 | -59% |
| Warner Discovery | 37.7 | -62% |
| Meta | 36.8 | -63% |
| Turtle Beach | 31.6 | -68% |
| Roblox | 28.2 | -72% |
In the DFC Video Game Stock Index, the biggest declines were metaverse companies with Meta/Facebook and Roblox both down well over 60%. Japan based companies were the strongest performers, although that is not saying much.
Going into 2023, DFC Intelligence is bullish on the video game market. Hardware issues are being worked out in the PC and console business, there is a solid lineup of new games in the pipeline and the recession actually looks to benefit the industry as people get the expensive post-COVID travel out of their system.
The DFC Intelligence Video Game Stock Portfolio
At the start of 2023, DFC invested a hypothetical $15,000 in ten stocks from the DFC Intelligence Video Game Stock Index that we expect to be strong performers in the next several months. It is important to note that these are also all stocks that we feel have long-term value and will not be subject to heavy-day trading.
Our portfolio will be adjusted throughout the year but we will focus primarily on holding for long-term growth. New stocks may be added as appropriate.
Stay tuned and look out for the new DFC Intelligence 2023 forecast. We expect some pleasant surprises for the industry!
