Video Game Company Stock Performance

Stocks for the most part reflect the performance of the company that issued them. IF we want to analyze the performance of a bunch of video game companies, one great way to do that is to just look at their stocks.

Unfortunately many video game companies are privately held. They have NO obligation to report their financial performance to the public. Valve and Zenimax are perfect examples of this.

However, many of the biggest video game companies are publicly held corporations. The governement requires them to report their financial performance to the public. Which allows us to make more informed investment decisions(unless they lie like in Enron's case).

Before we continue I want to make a correction to my previous post about the stock of Activision Blizzard. I did not take into account that their stock splits were not a 2:1 split. Many were 4:3 splits so I overestimated the performance of Activision-Blizzard's stock. If you invested 1 dollar in Activision-Blizzard in Jan. 2003 and held it until now you would have turned one dallar into 6.43 dollars.(my previous was 1 to 32 which now that I look back is a little rediculous). However,the Electronic Arts analysis was accurate.

So to make up for that, instead of doing the complicated calculations myself, I am just going to use screenshots of google finance. Then I will discuss the results. The companies I have chosen are by far the largest in the industry: Konami(KNM), Take Two(TTWO), Nintendo(NTDOY), THQ(THQI), Activision-Blizzard(ATVI), and Electronic Arts(ERTS).

Our Video Game Stock Portfolio:

Our Portfolio for Jan 2003 to Aug 2011

Now we can see that if you invested on Jan 1st 2003 and held it until about now, you would have outperformed the market as a whole(the dow and the nasdaq). A portfolio of these six companies would have increased by 90.26%. A portfolio of the Dow and Nasdaq would have increased by only 58.25%. As you can see from the defaulted settings, this includes splits and dividends.






Downfall:

Our Portfolio Since the Great Recession

Analysis:

Now I want to list some of the best games these companies in our portfolio released in the time period in question. I will just grab this information from Wikipedia. I want to compare that to the performance of all of the companies in our portfolio.

With ample use of copy and paste we have this (note: I used the percentages from the topmost graph in this post):

Our Portfolio Analysis

Market Portfolio Analysis