Video Game Stocks Poised for Surge in 2025, Analysts Predict
Video game stocks are expected to outperform the broader market in 2025, according to a recent forecast by Ned Davis Research (NDR). The firm predicts a 22% upside for video game stocks compared to the S&P 500, citing major upcoming releases as key drivers for the sector’s growth.
NDR has initiated an “overweight” rating for the video game sector in 2025, anticipating significant sales growth driven by new game titles and console releases. Among the highly anticipated releases are Assassin’s Creed Shadows, Monster Hunter Wilds, Fable 4, Borderlands 4, and the much-awaited Grand Theft Auto VI.
The video game industry has lagged behind the S&P 500 since 2021, but analysts expect it to catch up as profit margins begin to recover. Industry-wide workforce reductions implemented in 2024 are expected to set the stage for improved margins in the coming year.
Technological advancements, particularly the adoption of AI in game development, could further boost the sector’s profitability. AI’s potential to enhance game development efficiency is seen as a significant factor in reducing costs and improving overall profitability.
Grand Theft Auto VI is predicted to be a major sales driver, with some estimates suggesting it could sell up to 250 million copies. The high anticipation for this title stems from the unprecedented success of its predecessor, Grand Theft Auto V.
Another key factor in the 2025 outlook is the expected release of the Nintendo Switch 2, coming eight years after the original Switch. This new console is anticipated to drive sales with its accompanying game releases.
For investors looking to capitalize on this trend, NDR recommends the Global X Video Games & Esports ETF (HERO), which offers significant exposure to key players in the industry, including Take-Two Interactive. The firm projects a 22% relative return for HERO over one year compared to the SPDR S&P 500 ETF Trust (SPY).
As the video game industry gears up for a potentially landmark year in 2025, investors and gamers alike will be watching closely to see if these predictions come to fruition.
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