5 of the Largest U.S. Video Game Company IPOs in History
By now, Wall Street is about as familiar with the video game industry as the average 15- to 35-year-old male, the industry’s largest demographic. Here’s why: There’s a lot of money to be made in the video game industry. While there are no doubt a few gamers among the ranks of America’s financial services sector, the irresistible allure of a high return on investment has helped solidify the industry’s place on Wall Street.
To be clear, video games aren’t big business the same way that, say, smartphones are. Even as an outlet for relatively small but higher-risk, higher-reward investments, video game companies aren’t as attractive as the average pharmaceutical company. At the end of the day, game revenues depend on discretionary spending, which is fickle compared to more obligatory healthcare spending.
But there are definitely video game companies that have followed the storybook stock market narrative. Take Activision Blizzard (NASDAQ:ATVI) for example. The company launched its initial public offering in the early 1990s and traded at about $1 per share until the end of 2000, when it finally became clear that the company wasn’t going to evaporate alongside the bursting of the tech bubble.
With a current beta of 1, Activision stock has done a pretty good job of following the overall market, and since its debut on the Nasdaq, has increased to nearly $20 per share, a 2,235 percent gain. With a market cap of $13.8 billion, Activision isn’t necessarily a heavy hitter, but it’s got enough history and momentum that it’s become something of a monument. A 1 percent dividend yield doesn’t hurt its reputation, either.
But not all video game companies have been successful — some, in fact, have been spectacular failures — and the jury is still out on recent gaming IPOs in the social-mobile space. Here are a couple of the big names from the past and present.