Video game stocks look poised to rally amid a stacked 2025 release calendar, the research firm says

• Video game stocks are expected to rise in 2025 amid a slew of major releases, says Ned Davis Research.

• Grand Theft Auto VI and Nintendo Switch 2 are expected to drive further sales growth in the industry.

• NDR suggests investing in the Global X Video Games & Esports ETF to gain exposure to the sector.

Video game stocks are expected to rise in 2025 ahead of a huge slate of blockbuster releases, according to Ned Davis research.

The company launched the video game theme as “overweight” for 2025, forecasting a 22% upside compared to the S&P 500 over the next year.

“New titles for 2025 – especially Grand Theft Auto VI “The release of Nintendo Switch 2 should ensure that sales growth reaches the lowest levels in the industry,” NDR said in a recent note.

The research firm highlighted upcoming game releases, including Assassin’s Creed Shadows, Monster Hunter Wilds, Fable 4, Borderlands 4, and Take-Two’s Grand Theft Auto VI, which are expected to launch. It will be released before the 2025 holiday shopping season.

NDR noted that since the end of 2021, the S&P 500 has jumped 27% compared to a gain of just 7% for its objective video game index. The research firm now expects to play catch-up, as evidence suggests profit margins have bottomed out.

The company confirmed that video game companies in all fields reduced their workforce in 2024 after weak sales after the pandemic.

“One of the most bullish things a company can do in a recession is to reduce fixed costs so that when sales recover, operating leverage leads to significant earnings growth,” NDR said. “Layoffs paved the way for margin improvement.”

Additionally, NDR said the adoption and use of AI in the video game industry has the potential to reduce game development costs.

Regarding a sales recovery in 2025, NDR said it expects a significant rebound thanks to the “800-pound gorilla” that is Grand Theft Auto VI, “which could sell 250 million copies over its lifetime,” NDR said.

This is based on Grand Theft Auto 5 being the second best-selling video game of all time. The fact that it was released over 11 years ago means that the desire for the next installment is high among gamers.

Finally, the Nintendo Switch 2 is expected to launch next year, which will be another catalyst for booming sales. The research company said that the release will come about eight years after the appearance of the first Nintendo Switch device, and Nintendo will certainly “support it with new versions of video games.”

The company recommends that investors gain exposure to the sector through: Global X Video Games and Esports ETF (Indicator symbol hero), partly due to its high exposure to Take-Two stock.

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