How Can Gaming Knowledge Help in the Stock Market?
You might think that the stock market is as far removed from the world of gaming as anything could be. Yet, there are some ways that a gamer can take advantage of their knowledge to understand share price trends.
Follow the Latest Trends
Perhaps the most obvious thing is to look at the latest news in the gaming market. Which companies are about to bring out a new game or launch some sort of new gaming platform? A game successfully launched at a major event like the UK Games Expo tends to have an effect on the price of a company’s share, so knowledge of this can be used to work out what might happen next.
However, you should be able to delve deeper than that. For instance, by looking at whether a new game still in development is likely to be a success or if a company seems to be struggling to produce new content. This can help you to understand whether the developer is on an upward trajectory or going in the opposite direction.
It doesn’t have to be a company that develops games. They might make accessories like game consoles, virtual reality headsets or augmented reality kits. There are plenty of businesses whose success depends upon the gaming market, and not all traditional investors are comfortable coming to terms with this as they don’t fully understand the market like a gamer does.
Look for Up and Coming Companies
Another interesting idea is to try and catch a games company that’s small but could make it big. Maybe their shares are currently worth very little but they might have some sort of revolutionary platform or some other key aspect that you believe should catapult them into the big time sooner or later.
This is the kind of share that every serious investor wants to buy before it gets big: low-cost shares that could explode in value are known as penny stocks in the UK, which investors can buy. They’re popular because they can often be snapped up with low initial investment and have the potential to increase in value significantly. However, of course, there’s also the risk that they lose value, as penny stocks can be highly volatile.
The gaming market is growing and it seems certain that some smaller companies will break through to join the elite level who have valuable shares on the stock exchange, like Activision Blizzard, Tencent and Nintendo. An investor who identifies them early enough could see them as like getting Microsoft, Apple or Sony Group shares when they were worth virtually nothing.
What Are the Risks?
Getting involved in the stock market isn’t right for everyone, as there’s the risk of losing money if the shares crash. This is something that requires a huge level of risk tolerance as well as the time and expertise needed to understand market trends.
Simply following the market for fun can be enough for some people, as they still get to see whether their predictions come true and how their favourite developers grow in value over time.
