Source: Pixabay
The world of online gaming and gaming has conquered a large audience in recent years, with the side effect of slowing down the gaming consoles’ momentum. Many predict that these will become obsolete, especially with the arrival of Google’s Stadia platform on the market. In Nice, several startups are already active in the sector and attracting investors. Do Nintendo, Sony, and their counterparts still have bright days ahead?
Investor Reaction Following the Slowdown of Gaming Consoles
Many are concerned about the future for Nintendo and other companies active in the gaming console sector. This sentiment has indeed intensified with the upcoming arrival of Google Stadia. Some investors, therefore, choose to bet on a drop in the share prices of companies active in the gaming console domain, anticipating a decline. To do so, some of them buy derivative products such as CFDs. If you’re not familiar with financial markets, click on this link to understand what CFD trading is. These instruments offered by trading platforms allow, through leverage, to benefit from the rise or fall of an underlying asset.
Link Between Stock Prices and Gaming Consoles
That said, investors should not worry excessively. Indeed, while in the past, the launch of a new product or console was considered an event, this is less the case today.
If we look at the graph below, we can see that the correlation between stock prices and a new product or console is increasingly limited. This seems quite logical considering that these companies have anticipated this change and diversified. They are therefore not solely dependent on their gaming consoles.
Source: IG.
In any case, it’s been some time now that online games have been gaining market share at the expense of gaming consoles. Statista estimates that the number of PC gamers will be close to 1.5 billion by 2021. Conversely, annual sales of gaming consoles have reportedly halved between 2008 and 2018, going from 90 million units to 45 million. The latest launch, the PlayStation Classic, was also a big disappointment.
Source: IG.
A Promising Start-up Near Nice
The scheduled end of gaming consoles does not mean the end of gaming, which is doing better than ever. E-sports, for example, is booming. In Sophia Antipolis, the technology park located southwest of Nice, the e-sport management start-up sees a bright future. Its main goal is to professionalize the management of e-sport teams. In 2018, the young company managed to secure funding of two million euros, and the number of users doubled in one year, going from about 20,000 to 40,000.
According to a Newzoo report, relayed by the World Economic Forum, this segment’s growth will be sustained in the coming years. Revenue is expected to surpass the one-billion-dollar mark in 2019. There is no doubt that this very promising sector should develop in France, given the many companies active in the field. Savvy investors will therefore not fail to seize upcoming opportunities.
