Analysis of investment opportunities in the gaming stock market using social trading

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Abstract

Despite the gaming industry’s growth, until 2016 there was no option to invest in the gaming stock market with a diversified financial product, and even in 2024, investment instruments are scarce. Furthermore, the literature lacks an explanation of the relationship between key game metrics and macroeconomic variables (Palma-Ruiz et al., 2022). This study aims to fill both these gaps. The 50 countries with the highest revenues for various markets and geographic regions are analysed to develop multivariate models that explain gaming revenues and player numbers using macroeconomic variables such as gross domestic product (GDP), private consumption, number of Internet users, and interest in online gaming via Google Trends. The main finding is that the games’ revenues and the number of players can be effectively explained by the macroeconomic variables mentioned above and that the models also serve as a forecasting method with high model quality. In addition, a portfolio of gaming stocks is developed using the social trading platform (STP) wikifolio and compared to alternatives in terms of holding and performance. The findings suggest that STPs can serve as a bridge in markets with limited or non-existent tradable instruments and that social traders have outperformed conventional investment products in gaming.

Keywords: FinTech, Games, Gaming, Video Games, Social Trading, Wikifolio

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: G11, G12, G23, L86, O16

Received: 03.06.2024
Revised: 09.10.2024; 20.11.2024; 03.03.2025
Accepted: 06.03.2025
Published online: 10.03.2025

How to cite this paper: Tahvildari, M. (2025). Analysis of investment opportunities in the gaming stock market using social trading [Special issue]. Risk Governance & Control: Financial Markets & Institutions, 15(1), 204–214. https://doi.org/10.22495/rgcv15i1sip6