In all businesses there are changes in who uses the services and when they become mainstream. For many years, gamers were considered a minority subset of people who played in their parent’s basement, however that has changed. Listen to the new generations of people and ask them have they ever gamed and likely they will say yes. If they say yes then you can ask them what games they play and wonder who makes the games. How do the games make money for their companies and how much do people spend on gaming? In turns out the money spent on gaming is comparable to the amount spent on going to the movies.
In an article by Nivedita Balu and Tiyashi Datta of Reuters, two bigger gaming companies are merging – Take-Two Interactive bid $11.04 billion for Zynga. The merger of the two companies would produce a gaming powerhouse for people using console, PC and mobile devices. The real growth is mobile devices.
D.A, Davidson analyst Franco Granda noted many console developers are finding out that creating mobile devices is very hard. It may be easier for companies to buy other talents to capture mobile devices.
Take-Two Interactive biggest blockbuster is Grand Theft Auto and Zynga has FarmVille.
Linking to dividend paying stocks, in all industries they build and develop and many times as investors you either do not pay attention to them for personal reasons or they are not in the industry you are in and that is ok. It is important to realize in the world of consumers, there are many consumers doing many things but once they become mainstream it means there is serious money at play and you should examine the industry. You can invest in everything, but there is never a lack of homework to do when investing or not investing.
There are more questions than answers, till the next time – to raising questions.