Video game industry stock is a better investment than gold

Gordon Brown has a long history of financial mistakes. Income tax credits, private finance initiatives and more than doubling health service spending in 5 years for little benefit for instance. But one of the silliest was selling off half of Britain’s gold reserves, some 400 tons, at a 20 year low price. Since when the value of gold has tripled to over $1,000 dollars an ounce. This represents a loss to the British taxpayer of some £2 billion.

Gold is a usually a bad investment, you have to pay for storage and it generates no income, so why has its value rocketed? Quite simply we live in turbulent times, currencies are going up and down as are company stock prices. Nobody knows what is going to happen next. So people are buying gold as a safe refuge for their wealth which is driving it’s value up. But they are wasting their time, they should be investing in the stock of video game industry companies. Just look at this:

  • GAME Profits Hit Record High In Full Year Results. Record pre-tax profits were recorded of £75.5 million ($149.0m) – an increase of 156 percent on the previous year. Total sales growth for the year rose by 86 percent to £1.49 billion ($2.94bn), with like for like sales up by 41 percent.
  • Record-Breaking UK Launch For Nintendo’s Wii Fit . Despite a higher than normal retail price, due to the inclusion of the “Balance Board” controller, Wii Fitwas bought by around 1 in 10 Wii console owners over its first two days on sale. The title recorded an estimated £16.3 million ($32.4m) in revenues, making it the third biggest launch ever in the UK, behind only Grand Theft Auto: San Andreas (£24.2 million/$48.2m) and Halo 3 (£16.9 million/$33.6m).
  • Gameloft Sales Rise 11% To $40 Million In Q1. Mobile games developer and publisher Gameloft is reporting consolidated sales of €25.3 million ($39.6 million) in its first quarter sales report for 2008, 11% higher than in the previous year.
  • GTA IV sets UK day one records. According to Chart-Track estimates, GTA IV first day sales were 609,000 units – eclipsing the record of 501,000 units set by GTA: San Andreas in 2004. GTA IV also set a record for first day sales Xbox 360 software, with 335,000 units. The prior record, set last September by Halo 3, was 266,000 units.
  • Microsoft’s Entertainment division revenues up 68%. Revenue from the Entertainment and Devices division grew 68 per cent over the comparable period last year which Microsoft attributes to demand for Xbox 360 consoles. Cumulative Xbox 360 console sales surpassed 19 million during the quarter, up 74 per cent from the prior year.
  • Ubisoft 2007-08 sales up 43%. Ubisoft has reported Q4 sales of EUR 217 million (USD 340 million; GBP 172 million), up 20.3 per cent from the same period of the prior fiscal year at constant exchange rates. Fourth quarter sales were 31.5 per cent higher than the company’s initial guidance issued on January 23, 2008. This strong showing was driven by better-than-expected performances from Tom Clancy’s Rainbow Six Vegas 2, the Games for Everyone brands and Assassin’s Creed. For the full fiscal 2007-08 year, sales were EUR 298 million, up 42.9 per cent at constant exchange rates (USD 466 million; GBP 236.6 million).
  • Nintendo sales up 73% for the year. The company saw sales jump 73 per cent across the fiscal year, while operating income was up 115.6 per cent and profit up 47.7 per cent. Total sales therefore amounted to JPY 1.67 trillion (USD 16.1 billion), with profit hitting JPY 257 billion (USD 2.48 billion), fuelled by the sales of over 30 million Nintendo DS consoles, and almost 19 million Wii consoles.
  • Logitech reports Q4 growth. The peripherals manufacturer reported sales results of USD 601 million (EUR 376.9 million), up 17 per cent from last year’s quarter result of USD 513 million (EUR321.7 million) . Operating income was USD 66.1 million (EUR 41.4 million), up 20 per cent from USD 55.3 million (EUR 34.6 million) a year ago.

The game industry is definitely the place to have your money. It is growing faster than anyone predicted and it will continue to grow through the economic downturn. Remember, this is entertainment, and Hollywood had some of it’s greatest successes during the great recession.

And the video game industry is still at it’s very beginning. It will continue to grow till it is bigger than television and film combined. This is inevitable as gaming has the powerful and fundamental advantages of interactivity, connectivity and non linearity.


  1. As long as we remember to get our money out before piracy kills the industry, obv.

  2. “The game industry is definitely the place to have your money. It is growing faster than anyone predicted and it will continue to grow through the economic downturn.”

    So, piracy isn’t going to kill the industry?

  3. The game industry has many ways in protecting their software – piracy although there, but not as impactable as it has been in the past.

    There are many ways to protect your software now, so yes he is correct.

  4. I believe the digital entertainment industry is a strong one, and piracy holds little threat to it, take the PS3 for an example, in over three years not one person has released any sort of credible hack, crack, replacement firmware, emulator or even a single playable rom.

    Now correct me if I am wrong, but Sony is the future of the industry, with Nintendo following up closely, and Microsoft’s entertainment division might as well sell off there rights to the X-box to either Apple or even Dell, at least they have experience building computers that work. So what I am saying is that piracy protection will fall on the hardware manufacturer’s, but the real company’s to watch are the developer’s.

    Companies like Ubisoft are making a huge profit and has only suffered a small loss of there market (due to the recession), and are firm investments for anyone.

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