The DFC Intelligence Video Game Stock Index and Video Game Stock Portfolio were launched on January 3, 2023. In its first month companies in the index reported an average 12% gain. The largest gain was among the larger conglomerate companies that ironically announced some significant recent layoffs.
Meta was the best performer, showing a 51% increase for the month, much of it in the past few days, after reporting fourth-quarter earnings. Netflix (up 25%), Apple (up 24%), Amazon (up 22%), Sony (up 22%), and Google (up 18%) also showed strong increases.
The DFC Intelligence Video Game Stock Portfolio does not focus on the conglomerate companies and the return was a more modest but still excellent 8%. In the portfolio, hardware companies Nvidia (up 48%), Turtle Beach (up 27%), and Corsair Gaming (up 18%) were the best performers.
Unlike the major conglomerates, most video game companies have yet to report earnings. Electronic Arts was one of the first companies to report and with a slight disappointment, its stock was down 6.5%. Ubisoft (down 19%) was the worst-performing company as it reported more distributing product delays and cancellations.
Overall DFC continues to be bullish on 2023 despite overall economic uncertainty. Of course, as more earnings roll in for the video game sector, it will be interesting to see how investors react. The fourth quarter of 2022 was tough for the industry from a product perspective. However, the recent news on increased Sony PlayStation 5 shipments and growing interest in new graphics cards are clear positive growth signs for the next two years.