In the late 1970s and early 1980s, the video game industry was young and exciting. New technology was allowing people to play video games at home for the first time and investors were throwing everything they could at it, in the hopes of striking big returns.
However, in 1983, the North American video games market crashed. This was due to market saturation and a lack of quality control as publishers rushed to get titles to retailers as quickly as possible.
The industry never truly returned to the pre-crash peaks when you adjust for inflation, though it appears to be getting close. So are we seeing the beginnings of a new bubble, or is there genuine cause for investor optimism?
Record Revenues
There are countless times in living memory where investors have got over-excited about a particular asset or industry and driven its share price up to unjustifiable, astronomical levels. Recent examples include the 2017/18 Bitcoin boom, the dotcom bubble and potentially even Tesla right now.
Several major gaming companies, including Electronic Arts, Take-Two Interactive, Ubisoft, and Microsoft are all trading near or above record levels.
But these high share prices are not without merit. These companies are posting record revenue and profit figures, and most are expected to benefit from the launch of the new generation of consoles in the coming weeks.
iGaming
iGaming, which is the term for businesses that offer sports betting and online casino games through a website or an app, is also performing well. The 2018 changes to US federal law have meant new markets have begun opening in the country and many of the established players from around the world are trying to build a market share.
Even in established markets like Europe, revenues continue to grow with gross gaming revenues from casino games alone expected to reach €25 billion this year.
Recent innovations of “live casinos” have helped to make online casino games more engaging for many players, which has led to more customers and longer gaming sessions.
While both new consoles and innovations in iGaming are helping to drive stronger revenues and stock prices, the biggest drivers of growth in the gaming industry come from mobile games and microtransactions.
The microtransaction model has become ubiquitous in recent years. It started first with casual games played through social media sites like Facebook and smartphone apps offering the option to purchase in-game items and extra lives, but this has since found its way to other games.
Take-Two Interactive, one of the companies that have been enjoying a rising share price, has seen its revenues and profits surge thanks to microtransactions.
Its Grand Theft Auto Online game is generating significant revenues, despite it being more than seven years old. Red Dead Online is also helping to keep the two-year-old game alive. Both titles enjoy high levels of player engagement thanks to regular updates that keep users returning to the game.
In 2019, Take-Two made almost 60% of its profits from microtransactions in its online games, while in May 2020, the company announced that it had seen its profits increase by 116%.
Long Term Revenue
As well as helping older games to have a longer lifespan, the content that generates microtransactions doesn’t require the same level of upfront development that is required for a new game.
This means that video game developers are able to make more money for much longer periods of time from their intellectual property with lower associated costs.
Valve, the creator of Counter-Strike: Global Offensive, announced at the end of 2018 that the game would become free-to-play. The game, which was six years old at the time, remained incredibly popular with fans thanks to skins and other customisations that generated revenue through microtransactions.
The game still sees hundreds of thousands of concurrent players on the Steam platform, eight years after it was released.
A Good Investment?
Gaming companies are enjoying rising revenues and profits. The monetisation model for most video games has been evolving over the last few years to one that generates more revenue from fewer releases.
Based on this, and an ever-growing number of players, gaming companies may be good investments.
GUADALAJARA, Mexico – Canada’s Marina Stakusic fell 6-4, 6-3 to Poland’s Magdalena Frech in the quarterfinals of the Guadalajara Open tennis tournament on Friday.
The 19-year-old from Mississauga, Ont., won 61 per cent of her first-serve points and broke on just one of her six opportunities.
Stakusic had upset top-seeded Jelena Ostapenko of Latvia 6-3, 5-7, 7-6 (0) on Thursday night to advance.
In the opening round, Stakusic defeated Slovakia’s Anna Karolína Schmiedlová 6-2, 6-4 on Tuesday.
The fifth-seeded Frech won 62 per cent of her first-serve points and converted on three of her nine break point opportunities.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Alejandro Kirk’s long single with the bases loaded provided the Toronto Blue Jays with a walk-off 4-3 win in the 11th inning of their series opener against the St. Louis Cardinals on Friday.
With the Cardinals outfield in, Kirk drove a shot off the base of the left-field wall to give the Blue Jays (70-78) their fourth win in 11 outings and halt the Cardinals’ (74-73) two-game win streak before 30,380 at Rogers Centre.
Kirk enjoyed a two-hit, two-RBI outing.
Erik Swanson (2-2) pitched a perfect 11th inning for the win, while Cardinals reliever Ryan Fernandez (1-5) took the loss.
Blue Jays starter Kevin Gausman enjoyed a seven-inning, 104-pitch outing. He surrendered his two runs on nine hits and two walks and fanned only two Cardinals.
He gave way to reliever Genesis Cabrera, who gave up a one-out homer to Thomas Saggese, his first in 2024, that tied the game in the eighth.
The Cardinals started swiftly with four straight singles to open the game. But they exited the first inning with only two runs on an RBI single to centre from Nolan Arendao and a fielder’s choice from Saggese.
Gausman required 28 pitches to escape the first inning but settled down to allow his teammates to snatch the lead in the fourth.
He also deftly pitched out of threats from the visitors in the fifth, sixth and seventh thanks to some solid defence, including Will Wagner’s diving stop, which led to a double play to end the fifth inning.
George Springer led off with a walk and stole second base. He advanced to third on Nathan Lukes’s single and scored when Vladimir Guerrero Jr. knocked in his 95th run with a double off the left-field wall.
Lukes scored on a sacrifice fly to left field from Spencer Horwitz. Guerrero touched home on Kirk’s two-out single to right.
In the ninth, Guerrero made a critical diving catch on an Arenado grounder to throw out the Cardinals’ infielder, with reliever Tommy Nance covering first. The defensive gem ended the inning with a runner on second base.
St. Louis starter Erick Fedde faced the minimum night batters in the first three innings thanks to a pair of double plays. He lasted five innings, giving up three runs on six hits and a walk with three strikeouts.
ON DECK
Toronto ace Jose Berrios (15-9) will start the second of the three-game series on Saturday. He has a six-game win streak.
The Cardinals will counter with righty Kyle Gibson (8-6).
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – The Vancouver Whitecaps have loaned midfielder Jay Herdman to Cavalry FC of the Canadian Premier League and rewarded two Whitecaps FC 2 players with MLS contracts.
Midfielder Jeevan Badwal signed as a homegrown player through 2027, with options for 2028 and 2029, while forward Nicolas Fleuriau Chateau signed an MLS contract through 2025, with club options for 2026 and 2027.
Both have been playing for the Whitecaps’ MLS Next Pro team along with the 20-year-old Herdman, the son of Toronto FC coach John Herdman.
The moves were made before Friday’s MLS and CPL roster freeze.
Born in New Zealand while his father was working for the New Zealand Football Federation, Jay Herdman was also part of the New Zealand soccer team at the Paris Olympics with three appearances including two starts. Herdman’s loan deal runs through the end of the CPL season.
“Jay is an important signing for us, who will provide another attacking option for the run-in,” Cavalry coach and GM Tommy Wheeldon Jr. said in a statement. “He’s a player that we’ve been tracking since we played against Whitecaps in pre-season and he has very good quality, with terrific energy and the ability to contribute to goals.
“With the recent injury to Mael Henry, Jay’s positional profile and age helps us with on-field options and minutes that count towards the league’s required 2,000 U-21 domestic minutes during the regular season.”
Badwal, an 18-year-old from suburban Surrey, is the 26th academy player to sign an MLS contract with the Whitecaps.
“Having joined our academy in 2019, Jeevan continues to progress through our club and takes every challenge in stride,” Whitecaps FC sporting director Axel Schuster said in a statement. “He is comfortable on the ball, positionally sound, and does the simple things very well. We are excited for Jeevan to make the next step in his young career.”
Badwal has made 19 appearances with Whitecaps 2 this season, scoring two goals and adding three assists. A Canadian youth international, he started all three matches for Canada at the 2023 FIFA U-17 World Cup
Badwal made his first-team debut off the bench in the first leg of the Canadian Championship semifinal against Pacific FC.
Chateau was originally selected 74th overall by the Whitecaps in the 2024 MLS SuperDraft after spending two years at St. John’s University.
The 22-year-old from Ottawa signed an MLS NEXT Pro contract with Whitecaps FC 2 in March. He leads Whitecaps FC 2 in goal-scoring this season with eight goals across 21 appearances (including eight starts).
“Nicolas leads MLS NEXT Pro in shots on target, has a very strong work rate and willpower. We are looking forward to seeing his growth as he builds on his young professional career,” said Schuster.
Chateau made his first-team debut as a second-half substitute at CF Montreal on July 6.
Herdman, who joined the Whitecaps academy as a 13-year-old, has made 19 appearances for Whitecaps FC 2 in 2024, scoring six goals and adding three assists. He made his MLS debut in April as a second-half substitute in a 2-0 victory at the Seattle Sounders.
Internationally, Herdman has represented New Zealand 29 times across the U-19, U-20, and U-23 sides. He was part of New Zealand’s squad at the 2023 FIFA U-20 World Cup, starting three matches at the tournament and scoring against Uzbekistan.
The Whitecaps host San Jose on Saturday while Cavalry entertains Atletico Ottawa on Sunday.
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This report by The Canadian Press was first published Sept. 13, 2024
