Stock Entry Point Article​

Activision Blizzard or Microsoft? Top Video Game Stocks

Activision Blizzard is almost a household name with blockbuster games like Call of Duty and Candy Crush. Microsoft, on the other hand, owns X-Box and is now starting to expand its subscription gaming business as well. There are also companies like Zynga and Electronic Arts. The pandemic has increased the demand for gaming as people look to fill their time at home. Gaming, as an activity in general, has increased in the past few months. Therefore, it might make sense to invest in stocks within the gaming industry. However, as an investor looking to buy video game stocks, where would you look.

Microsoft is making some moves

Microsoft recently announced one of the largest videogame sector deals when it acquired videogame maker ZeniMax for around $7.5 billion. One would have normally expected Electronic Arts or Activision Blizzard, often among the best video game stocks, to buy ZeniMax. However, since Microsoft has bought the company, there could be more deal-making by Activision Blizzard and Electronic Arts to counter Microsoft’s move.

It seems like Microsoft has been thinking about its gaming segment on lines similar to its other subscription businesses. The company has added games like Wolfenstein, Fallout, and Doom to its library. The acquisition of ZeniMax will further expand Microsoft’s Game Pass offering. The gaming market is potentially worth $200 billion and all the top competitors are jostling for a piece of the pie.

Activision Blizzard’s recent performance

Activision Blizzard reported significantly higher earnings per share in Q2 of 2020 as compared to Q2 of 2019. Earnings went up from $0.43 per share to $0.75 per share. The company was also successful in adding 101 million new users to its active user base that now stands at 428 million.

Activision’s stock closed at $80.13 on 23rd September 2020, down 3.57% for the past month but up 36.6% for the year 2020. It is still regarded as one of the best gaming stocks to buy.


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