#10 - Amazon (NASDAQ:AMZN)
If Google is trying to position itself as the Netflix (NASDAQ:NFLX) of gaming, then Amazon (NASDAQ:AMZN) may be trying to be the Roku (NASDAQ:ROKU). Amazon’s Twitch is similar to Roku in that it is agnostic to which gaming platform a customer is using. Twitch essentially allows consumers to live stream their gaming activity to the world. It’s an interesting idea, but one that doesn’t excite me personally.
Alas, I’m not the target audience for Twitch. And over 55 million visitors per month, with an average age of 21 years old, would agree. You see, it turns out people like to watch other people play video games. And that’s what Twitch enables. That 55 million visitors gives it the fourth-largest source for U.S. internet traffic.
What’s even more impressive is that, according to the company, 58% of users spend over 20 hours a week on the site. That’s some loyalty and some eyeballs. In a day and age where consumers can literally choose almost anything to watch, they are choosing to watch other people play video games. What a world.
About Amazon.com
Amazon.com, Inc engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero; and develops and produces media content.
Read More - Current Price
- $218.94
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 42 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $243.67 (11.3% Upside)
One of the best parts about investing in the video game industry is that you don’t have to be a gamer to understand the profit potential of this sector. If you watch Netflix, or use Roku, essentially if you are participating in the digital economy in any way, you can understand why this market is so attractive.
Subscriptions, streaming services, and loyalty programs are all pieces of the digital economy. And they’re all available in one form or another with video game companies. The companies in this presentation do not represent the entire video game market, but they do represent some of the largest players in the arena.
The Covid-19 pandemic will have repercussions for the economy for years. And one of those repercussions is that it accelerated the shift in how many consumers choose to consume content. And that includes the way gamers play individually and online. No live sports? We’ve got esports.
Or you can simply go online and play games with friends, or compete with complete strangers.
All of this was in place before the pandemic, but the trends have been accelerated, and they are unlikely to go backwards.
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