Immersive experiences in virtual reality and the financial potential to be explored with the development of the metaverse have generated a strong increase in interest and investments by large companies and investors in the electronic games sector.
In Brazil, there are alternatives that offer investors the possibility to stop occupying the position of just a traditional game player, to also be able to invest in some of the most promising names in the new digital economy.
Although tech stocks in general have been under intense volatility, in the wake of the prospect of rising interest rates in the United States, experts argue that the sector started the year with important announcements, which show the size of interest by video game companies in this time.
The most emblematic operation so far took place on January 18, when the acquisition of Activision Blizzard, developer of games such as “Call of Duty” and “Candy Crush”, valued at about US$ 75 billion by Microsoft, became public. something like R$ 390 billion.
It was the biggest transaction ever made by the technology company founded by Bill Gates.
A few weeks earlier, between mid-October and November, US mega-investor Warren Buffett had invested approximately US$975 million in the game developer’s shares.
Buffett, a longtime friend of Bill Gates, said he was unaware of Microsoft’s interest in making the investment in Activision.
The bombastic announcement of the purchase made by Microsoft came just days after Take-Two, responsible for the controversial GTA (Grand Theft Auto), signed a US$ 12.7 billion (R$ 66 billion) deal to bring the Zynga, creator of FarmVille.
To close the month of January, on the 31st, it was the turn of the Asian conglomerate Sony to acquire Bungie, developer of the Halo franchise, for US$ 3.6 billion (R$ 18.7 billion).
One of the main alternatives for retail investors interested in accessing the heated global market for electronic games today is through BDRs (Brazilian Depositary Receipts), says Rodrigo Knudsen, manager of Vitreo.
The BDRs, explains the manager, are financial assets traded on the Brazilian stock exchange, B3, which correspond to shares of foreign companies originally listed on international stock exchanges.
Activision Blizzard, Electronic Arts, Take-Two, Roblox and Zynga are some of the leading electronic game developers on a global scale with BDRs available for trading on the local exchange.
Knudsen adds that it is also possible to find BDRs from Microsoft and Sony, responsible for the sale of Xbox and PlayStation devices, on B3.
With the recent announcements, says the manager, there is an important signal about the potential of the segment of development of virtual entertainment.
“By investing in BDRs, the investor will be subject to both the fluctuations in the shares of the chosen company, as well as the dollar against the real”, he points out.
The minimum investment, however, is still high. Sony’s BDRs were trading at BRL 537.36 on Friday (18), while Activision Blizzard’s were priced at BRL 417.32 a unit.
Among the more affordable game BDRs, Zynga’s were priced at R$45.45 and Roblox’s were priced at R$25.38.
When investing in these assets, the investor pays a brokerage fee that varies between investment platforms, depending on the volume traded, and to B3.
If the investor prefers, or does not have the time to dedicate himself to the subject, another option is to delegate to a professional manager the selection of the best opportunities within the universe of electronic games.
In the wake of growing demand from investors, platforms and banks such as Warren, BB DTVM, Itaú, XP and Vitreo have recently launched funds dedicated to the theme of games and the metaverse.
The Warren Games FIA fund, which seeks the most promising BDRs on the Stock Exchange, accumulated a positive return of 15.64% in 2021.
In January, however, the fund was down 9.5% as prospects for interest rates in the US sent tech stocks lower.
Warren’s manager, Igor Cavaca says that, despite the high volatility, a typical characteristic of technology stocks, the electronic games sector has a high potential still to be explored, especially with the development of new fronts, such as the metaverse.
“The result of the fund last year came a lot from the bet that we have been making for some time in the metaverse, which we believe to be the next big trend in the market”, he says.
He says that he carries in the fund’s portfolio papers from companies such as Meta (formerly Facebook) and Roblox, an online gaming platform, as well as names more related to the hardware area, from video card and chip manufacturers, such as Nvidia and Qualcomm.
The fund is not exposed to exchange rate variation, with its result depending solely on the performance of the shares. The minimum investment for investment is R$ 1, with no administration fee.
A third way that investors find to allocate capital in the video game sector is through ETFs.
Cauê Mançanares, CEO of Investo, explains that the acronym corresponds to an investment vehicle that works as a kind of fund, whose shares are traded on the B3, and which aims to replicate large global stock indices.
In December last year, Investo launched an ETF called JOGO11 on the local stock exchange, whose purpose is to closely monitor the performance of the global ESPO index (VanEck Video Gaming and eSports ETF).
The index is composed of names not available via BDRs, such as Tencent, Nintendo, Capcom and Konami, and others that can already be accessed by B3, such as Take-Two, Electronic Arts and Activision Blizzard.
On Friday (18), the ETF, which is exposed to exchange rate fluctuations and charges a management fee of 1.03% per year, was traded for R$77.75.
“Many people already relate to these companies through games, participate in this gaming community, and now they can participate in the value creation that these companies are bringing”, says the Investo executive.
Last year, the global index that gathers the main stocks of games of the market retreated 2.1%, in dollar. In three years, until December 2021, the index rises 36.7%.
The most recent move, says Mauricio Schuck, head of management of active equity funds at BB DTVM, was influenced by the prospect of rising global interest rates, which had already begun to emerge in the middle of last year, as well as by the interventionist measures of the Chinese government. .
Schuck says that while both risks remain on the radar for 2022, the growth of the video game market represents a structural trend that should not be held back by any of these factors.
The BB Ações Games fund dropped 7.46% in January, with an accumulated drop of 8.5% since the beginning of the strategy, in March 2021. The minimum investment starts from R$ 0.01, with an administration fee of 1% per year.
“We ended up getting a slightly less favorable window for the games industry for now, but the outlook for the industry remains very positive, with an increasingly addressable market,” says Schuck.
He points out Activision Blizzard, Electronic Arts and Nvidia among the top bets in the fund’s portfolio.
“In the past, companies made money only from the sale of game consoles and cartridges. With the evolution of the industry, today the revenue comes mainly from sales that occur within the games themselves. It is a very important change, from a one-off revenue for a much more recurring revenue model”, he says.
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