Investment summary

The video game industry provides investors the opportunity to benefit from an ongoing secular growth trend. Some of these factors are globally improved living standards, demographic shifts, digitalization and the smartphone era.

Key industry drivers

Globally increased demand for free time entertainment

Global living standards are improving, this leads to more free time and an increased demand for entertainment. This trend benefits the video game industry as a whole.

Gamers come of age

Demographic shift increases the average age of gamers. Popularity for games grew large during the 80s and 90s; these are now in their mid-thirties with life-time peak of spending power.

Digitalization lower cost of distribution and increase availability

The rise of digital distribution has led to lower costs for selling games, which leads to an increased share of profits for game developers. The Improved profits lead to greater reinvestment opportunites and thus improving the gaming experience and drive innovation.

Smartphone broadens gamer audience

The rise of the smartphone have resulted in a relatively new game genre; Casual games. The reduced “hurdle” for start playing games have also increased the likelihood of “new” gamers trying other more hardcore game genres, thus increasing the gamer audience.

Why now?

The main secular forces behind the growth of the video game industry will continue for many years. The opportunity in new markets continue to be enormous and new trends like esports, VR and AR has only just begun to take form.

The theme focus on three high-growth subthemes

– Improved quality of life leading to more free time
– Rise of new technologies
– On going digitalization