A New Play to Tap a $150 Billion Industry
If you’re a parent, you’ll get a kick out of this.
I opened up my credit card statement the other day and was greeted with quite the surprise.
Specifically, it was $84 in random charges to Google’s Play store. I immediately knew who the culprit was.
My son’s now hard at work on this Good Friday digging a ditch for me to lay a buried electrical cord.
It’s one of many chores on his list of to-dos I gave him in order to pay off his $84 debt. A little hard work builds character, right?
The alternative was no video games for a week. A death sentence to an adolescent boy…
But as I watched him digging from my home office, it dawned on me. There’s a ton of demand and subsequently a lot of opportunity in the gaming space.
A $137 Billion Industry in 2018
Yes, that’s billion with a “B,” folks, and it gets better. Since 2012 the industry has grown significantly year over year. Projections for the industry this year are topping $151 billion. It’s an industry with incredible growth.
Gaming opportunities can be broken down into three subsectors. There’s mobile gaming, which is how that $84 in charges showed up on my credit card statement.
There’s also PC gaming and console (PS4, Xbox and other systems) gaming. PC gaming last year saw revenues upward of $33 billion. The console market topped $38 billion in 2018, according to GamesIndustry.biz.
The largest sector by far however is mobile gaming, which accounts for 47% of all gaming revenue and topped a whopping $63 billion in revenue.
Which leads me to your opportunity today.
The King of Mobile Gaming?
I’m no spring chicken anymore, but I’m not so old that I don’t remember spending hours upon hours playing video games in my younger years.
Many of my readers may have experienced the same, be it playing Pong on the old Ataris or Super Mario Bros. on your first 8-bit Nintendo. Today the gaming landscape is much different and many of the big names we grew up with are no longer around.
But in place of these companies, we have new ones like Tencent Holdings (OTCBB: TCEHY).
If you’re a mobile gamer, you’re fully aware of the vast footprint Tencent is garnering. They produce some of the most popular mobile games around.
Recently Tencent shares were suffering due to Chinese regulatory issues. Beginning last March and on into December the Chinese government enacted a freeze on all new video game approvals, citing problems ranging from violence in games to breaking curfew.
The thinly veiled censorship did not bode well for Tencent, which saw its biggest profit drop in company history last December.
Investors clearly weren’t too worried, however. The listing bounced off its lows to fight close to breakeven following its earnings announcement. Its OTC shares have now rallied 52% off their October lows.
Additionally, we have a great new catalyst that could power this stock to new highs.
Today we learned Tencent has received approval to begin testing a new Super Mario Bros. game on the extremely popular Nintendo Switch portable console.
If preliminary testing goes well, this could open up a huge new market for Tencent. One that could pay off big-time now and in the long run for the company and its stakeholders.
Markets are closed today, but you may want to jump on this one come Monday.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily