want to jump straight to the best most of our users prefer interactive brokers for stock trading your parents may have told you that video games will rot your brain but they probably didn’t understand how big a boost they could give to your portfolio video games have gone mainstream thanks to industries like esports and nonfungible token nft marketplaces professional call of duty and league of legends players rake in millions of dollars from streaming platforms and competitive gaming tournaments espn covers esports and it won’t be long until you can bet on these matchups like they were the nfl playoffs gaming stocks made headlines last year because of the gamestop corp nyse gme short squeeze but that market movement was influenced more by market psychology than improvement in gamestop’s bottom line here are benzinga’s top five picks in the gaming sector for 2022 gaming stocks to watch out for this year consolidation has been a theme in sectors like gaming for a while now whether it’s small studios being absorbed by larger companies or two major studios merging microsoft corp’s nasdaq msft purchase of activision blizzard recently stole headlines and take two interactive’s purchase of zynga inc nasdaq znga was of note but this trend has been going on for decades such as squaresoft merging with enix and buying eidos interactive many of the companies on this list are conglomerations of multiple outfits but a few stand on their own as new entrants in a rapidly evolving industry one of the newer entrants in the space is roblox the online gaming platform that allows users to play and create their own games on the system’s network through roblox studios users can build their own gaming universes and offer them to other players on the network the roblox network is free to access and play but additional items can be purchased with the ingame currency robux roblox went public in 2020 and immediately became a winner the stock has struggled in the last few months as most tech stocks have but the user base and network should give the company an advantage for years to come roblox is down more than 50 from its 2021 high and could be a bargain at these levels scientific games corp is a las vegasbased company that provides gaming services to live venues and mobile phones the first segment sells gaming machines lottery terminals and tablegame equipment to casinos and bars it also develops online mobile software for users to place live bets on slots cards and bingo games sgms is the smallest company on this list with only a 6 billion market cap but its stock has held up well compared to the rest of the sector over the last 12 months and it can appeal to a broader market than traditional gaming companies nvidia doesn’t develop actual video games or gaming consoles but the industry would be in a tight spot without its products nvidia’s geforce now and geforce gpu are crucial parts for gaming consoles pcs gaming networks and streaming services without these processors gamers worldwide would see their computers and consoles turn into expensive paperweights nvidia is a massive force in the tech sector with a market cap over 600 billion its processors are more indemand than ever and the increasing complexity of these systems creates a lucrative moat for the company nvidia also has ventures exploring selfdriving cars cloud computing and artificial intelligence electronic arts develops and publishes games for consoles pcs tablets and mobile phones but you probably know them for their flagship madden nfl series for xbox and playstation additionally the company develops and publishes sports titles like fifa nhl and ufc as well as star wars titles like battlefront and jedi fallen order if you own a home gaming console there’s a good chance you own more than one ea title as well ea is a large cap stock with a 35 billion market cap and more than 11000 fulltime employees the company has a near monopoly on console sports games thanks to its licenses with fifa and the nfl giving it a large barrier against competitors one of electronic arts’ biggest competitors is taketwo interactive the gaming studio behind popular titles like grand theft auto red dead redemption and borderlands the company develops its games primarily for home consoles like xbox playstation and nintendo switch in addition to its action adventure and shooter titles taketwo has partnerships with the nba wwe and pga to develop sports games under their franchise taketwo is based in new york city has 6500 fulltime employees and sports a market cap of 16 billion making it one of the smaller companies on this list but with a wealth of brand name titles and licenses with popular sports leagues taketwo is set up for plenty of future success if you’re reading this now you likely belong to the first generation to grow up with a video game console in your home video games used to exist only in arcades and computers but the 1980s ushered in the era of the home console today video games can be played at home in the arcade or while sitting on the bus if you have a smartphone video game stocks are also constantly evolving but you can gain exposure to the industry from a number of different directions however most companies in the industry fall into one of two categories hardware or software companies in the hardware category make the parts and equipment needed to bring video games to life for example microsoft manufactures the xbox series of gaming consoles but nvidia makes the processing chips that enable the consoles to work properly other types of gaming hardware include controllers headsets cameras and chargers in the software category you have game developers and publishers like taketwo interactive electronic arts and activision blizzard some companies pull double duty in hardware and software like nintendo otcmkts ntdoy which publishes the super mario series of games and makes consoles like nintendo wii and handhelds like nintendo switch to buy gaming stocks you’ll need capital a broker that sells the shares and a trading plan for the stock select the broker that best suits your style and trading goals but make sure it has the stocks you’re looking to buy once you’ve opened and funded your account with your broker of choice you can execute your trade and add gaming stocks to your portfolio some gaming stocks are located outside the united states or trade on otc markets so you’ll need to choose a broker that has access to these shares here are a few of benzinga’s favorites features to look for in gaming stocks strong barriers to entry the video game industry is one of repetition when a game or app reaches extreme popularity it’s inevitable that a dozen imitators will enter the fray if you’ve been gaming long enough you’ve heard of a game being a doom clone or halo killer in reference to two of the most popular first person shooters of all time the companies on this list have brand names customer loyalty and the expertise and funding to thwart competitors brand recognition gamers are fickle beasts which is why the best companies have brand notoriety whether it’s the processing power of nvidia gpus or the staying power of game series like madden or grand theft auto the top stocks here all have recognizable names and features that gamers will keep coming back to high gross margins a company needs to turn a profit to be successful developing video games consoles and equipment can be an expensive process and many fledgling studios lose money trying to break into the industry gross margins are a good barometer to show companies that have excessive overhead costs which could limit profitability every industry has benefits and drawbacks when it comes to investing and the gaming industry is no different here are a couple pros and cons to keep in mind when doing your research on video game stocks video games have entered the community zeitgeist and kids spend more time in front of screens not only do they enjoy playing games but they also enjoy watching others play thanks to services like twitch and popular professional esports gamers the popularity of gaming continues to grow and there’s no sign of it slowing anytime soon even the best companies take haircuts in the wrong part of the business cycle early 2022 could signal an environment that doesn’t bode well for software and tech companies interest rates are set to rise and inflation is at 40year highs these factors aren’t tailwinds for an industry like gaming pro many ways to play the industry the gaming industry isn’t just consoles and titles you have game developers and publishers hardware manufacturers semiconductor producers and network and streaming systems as more states legalize gambling and sports betting online table games will increase in popularity you can play the gaming sector from a number of different angles the main demographic for the gaming industry is kids and what are kids notorious for short attention spans and changing interests the gaming industry can change on a dime thanks to a new craze that sweeps schools much like pokemon go did a few years ago also kids grow up and spend less time gaming which means you’re needing to appeal to a new section of the demographic companies with staying power understand the need to reinvent themselves are gaming stocks a good investment right now like much of the broader tech sector gaming stocks have been hit hard since the beginning of 2021 some highflying companies like roblox and sea limited nasdaq se have seen their stock prices slashed over the last 12 months many of the big winners from 2020 have become the biggest losers in today’s market with inflation high and monetary policy becoming less accommodative it might be more prudent to wait until this current trend reverses before allocating too much capital to gaming stocks video games will continue to thrive but picking winners is hard look around the room next time you’re at a restaurant everyone is glued to a screen playing some kind of online game or puzzle video games are no longer relegated to the home or arcade because you have a gaming console in your pocket at all times kids today want to go pro playing fortnite just as much as they want to play pro football or basketball the trick is picking the winners video games are definitely here to stay however selecting the top gaming stocks requires research trendfollowing and luck modern humans may possess the shortest attention spans in human history here invest appropriately