In terms of entertainment, after the movies what do people particularly males spend their money on? In you said gaming then that is the correct answer. Most people could easily identify the big movie companies, but which ones are for gaming? There are some massive companies and some of them are public. In the gaming industry, similar to board games, it is not whether people love them or not, but how often they play or the retention value. The higher the retention value the more valuable the company’s games. In the world of gaming, to enhance your gaming experience is the addition of Virtual Reality. If you know very little and wish to know more about VR, the book The History of the Future by Blake Harris published by Dey St, a division of William Morrow, NY, 2019 is a great place to start.
The concept of VR was around for many years, however the systems were big, clunky, and only had a limited field of vision. As the semiconductor industry spent billions to make smartphones, the same chips could be used for VR to make the experience come alive. Similar to the stories of the first desktop computers with people trying all kinds of things in their garages, there is a story of a young man obsessed with VR living in the camper in his parent’s driveway. Originally, Palmer Luckeys was a teenager trying to invent the next link to bring VR to the masses. His ambition was to make do it your own kits and then other people would advance the technology so the masses would enjoy VR and gaming would be more fun and enjoyable. Along the way, because the VR world, similar to most worlds are relatively small, Palmer could reach or email the gurus of the field to show them what he had and maybe get a job in their labs. Eventually, others in the VR world saw what Palmer had done, helped start a company called Oculus and eventually Facebook bought it for $2.7 billion. Along the way there are many ups and downs and the book gives you an idea of how the technology companies work, in a small world relationships matter. It is true your biggest assets arrive in the morning and leave at night. How you keep them working for your company and working on the next big idea and not leaving to start their own company is technology management.
Linking to dividend paying stocks, depending on your age, you will approach the companies to buy differently. Those who are older, look at utility companies or the ones that provide electrical power to homes and businesses. Those that are younger will tend to do their interests first, given the economy has changed there is no right one to go to. A utility company can go to regulators and have their rates increased to ensure their capital plans are done and margins stay healthy. Tech and Entertainment companies pricing and retention are the key factors in evaluating whether their margins remain high and profits are steady. Both sectors can be very rewarding in the long run.
There are more questions than answers, till the next time – to raising questions.