• Gaming stocks offer access to a global entertainment leader with massive projected growth.
• Gaming investment opportunities span hardware, mobile, e-sports, and emerging cloud technologies.
• Innovative business models like subscriptions and user-generated content are driving sustainable revenue growth.
• Mobile and cloud gaming are expanding market access, creating new investment frontiers.

Beyond the Basement: Why Gaming Could Be a Serious Play for Investors

A Grown Up Conversation About Gaming

Let’s be honest. When you think of gaming, you probably picture a teenager in a dimly lit room, fuelled by fizzy drinks and shouting at a screen. It’s a persistent image, but one that is now laughably out of date. While that teenager certainly still exists, the world of interactive entertainment has quietly grown into a financial juggernaut that makes Hollywood look like a quaint cottage industry. To me, ignoring the investment potential here feels a bit like dismissing the internet in 1999. It’s a massive, fundamental shift in how people spend their time and money, and it’s happening right under our noses.

The numbers, frankly, are staggering. We’re talking about an industry projected to be worth over $287 billion by 2026. This isn't some flash in the pan. The pandemic certainly gave it a nudge, but the momentum was already there. This is now a mainstream pastime, as ingrained in our culture as going to the cinema or watching a football match. The difference is, it’s far more interactive and, from a business perspective, potentially far more lucrative.

It’s Not Just the Games, It’s the Plumbing

The most obvious way to look at this market is through the games themselves, but I think that’s a mistake. The real story, for a pragmatic investor, might be in the infrastructure that makes it all possible. Think of it as a digital gold rush. You could try to bet on which prospector will strike it rich, or you could sell the pickaxes and shovels to everyone.

Companies like NVIDIA are the ultimate pickaxe sellers. They started with graphics cards for hardcore PC gamers, but now their technology is the backbone of everything. Their chips power not just high end consoles and PCs, but also the vast data centres required for cloud gaming. As games become more visually complex, the demand for their hardware only seems to grow. Then you have giants like Microsoft, which have played a blinder with their Xbox ecosystem. They aren't just selling a box anymore. With their Game Pass subscription, they’ve turned gaming into a recurring revenue stream, much like Netflix did for film. It’s a clever move that smooths out the boom and bust cycle of console launches.

The New Content Monarchs

Of course, the hardware is useless without compelling worlds to explore. Here too, the model is changing. Look at a company like Roblox. It doesn’t really make games in the traditional sense. Instead, it provides a platform, a digital box of Lego, and lets its users build the experiences. This creates a self-sustaining ecosystem where the company profits from a near infinite stream of user generated content. It’s a brilliantly simple and effective model.

This shift from a top down, publisher led industry to a platform based economy is crucial. It creates moats around businesses and fosters incredible loyalty. However, let’s not get carried away. The industry is not without its risks. It is notoriously hit driven, and consumer tastes can be fickle. Regulatory bodies are also starting to peer more closely at monetisation methods like loot boxes. Picking the one winner in this sprawling universe feels like a fool's errand. It's why a more diversified approach, like the one offered by the Gaming Revolution basket, might appeal to those of us who prefer to bet on the entire gold rush rather than a single miner. It spreads the risk across the hardware makers, the software creators, and the platform pioneers.

Deep Dive

Market & Opportunity

• The global gaming industry is projected to reach $287.1 billion by 2026.
• The hardware segment is expected to reach $140 billion by 2025.
• Mobile gaming is expected to generate $165.9 billion in 2023.
• The e-sports market is projected to grow to $3.2 billion by 2025.

Key Companies

• NVIDIA Corporation (NVDA): A chip manufacturer whose GPUs power high-end gaming rigs, cloud gaming services, mobile gaming performance, and virtual reality experiences.
• Microsoft Corporation (MSFT): Operates the Xbox ecosystem, which includes hardware, software, and services like the Game Pass subscription and Xbox Cloud Gaming for streaming games to various devices.
• ROBLOX Corporation (RBLX): A platform for user-generated games and experiences, monetized through a virtual currency called Robux which users purchase and creators can earn.

Primary Risk Factors

• The industry can be cyclical, with results driven by major game releases.
• Consumer preferences can shift quickly, especially in the mobile gaming sector.
• Increasing regulatory risks related to loot boxes and in-game purchasing models.
• Intense competition from new and established players.
• Cloud gaming faces technical challenges, including internet infrastructure and latency issues.

Growth Catalysts

• Continued growth in mobile gaming, driven by increasing global smartphone penetration.
• The expansion of the e-sports market through sponsorships, media rights, and merchandise.
• Cloud gaming has the potential to remove hardware barriers, expanding the addressable market.
• Companies with strong intellectual property and diverse revenue streams are well-positioned for growth.

Investment Access

• The investment is available through the Gaming Neme on the Nemo platform.
• Nemo is an ADGM-regulated platform.
• The platform offers commission-free investing and fractional shares starting from $1.
• The investment basket contains 21 stocks from the gaming ecosystem.