For private investors seeking to invest their cash in a singular video game project, the decision-making process can be rather complicated, as the video game industry operates very differently from the standard brick-and-mortar businesses, most investors have been accustomed to. 

Some key features of video game financing, as well as important factors to consider for investors, include:

• A high risk profile - even big-budget titles from world-renowned developers can carry a lot of risk with them, as any discrepancies between the target demographic and the finished product can cause the project to severely underperform in relation to its sales targets and ultimately fail 
• Importance of online communities - engagement with online communities, such as forums, groups, Discord servers, etc. is very important to prove the concept of the video game and get early feedback from the target customer base before the game launches, to mitigate risks and make necessary adjustments before the game’s official release date
• Deadline crunches and employee turnover - video game companies are notoriously volatile and carry a high turnover rate, where developers frequently have to work overtime and in tight deadlines, as the scope and progress of the project shifts over time, which can create an unstable working environment and lead to the loss of key talents for video game developers
• Intense competition and release schedules - video game developers need to be careful and strategic in selecting the release window of their projects, so as to not coincide with the release of another title of a similar genre and characteristics, which can greatly affect early-stage revenues and could potentially tank the project entirely 
• Regulations - this is especially important when considering video games that depict explicit content, which can be banned by regulators in various countries and lead to the loss of an important chunk of the target audience. Regulators, such as ESRB, assign ratings to each video game to inform users and parents of the contents of the video game, as well as the nature of its gameplay 

These are only a handful of issues that can arise during the development process and we have not even covered the many issues with leadership and project scope that can arise - all of which can have a noticeable impact on the post-release commercial performance of the project, as well as ongoing maintenance costs for servers and patch releases/updates. 

This is why it is crucial for investors to get accustomed to the development team and process as closely as possible to make sure that they are on top of these processes and will be able to handle these issues as they arise during the development process. 

The aforementioned reasons, coupled with an uneven distribution of publishing rights can make it exceedingly difficult for small developers to compete on the market and create a stable business.

For example, developers who wish to publish their games and make them playable on consoles, have a rather limited option of companies to choose from, namely Xbox, PlayStation, and Nintendo Switch, who together hold a lion's share of the global market. The policies of these companies determine the viability of the project to gain access to a global audience. 

For developers targeting a PC release, the selection is somewhat broader, but Steam and Epic Games still hold the bulk of the global market. This puts a strain on the pricing of video games, as well as the expected revenue figures for development studios. 

For this reason, investors have mostly been focused on investing in the stocks of publicly traded big-budget developers, such as Ubisoft, Activision Blizzard, Nintendo, Tencent, etc. 

However, this is no longer the sole option for investors looking to get a piece of this high-risk, but lucrative industry. 

Equity crowdfunding and private investments have turned a portion of the global video game industry into a lucrative alternative investment vehicle for industry professionals and those with sufficient knowledge of how it operates. 

Some online platforms now offer direct access to crowdfunding and revenue-sharing opportunities for investors to put their capital in. 

Fig.co

Fig.co, which is a member of the Republic investment platform, offers equity crowdfunding for individual video games and console manufacturers, along with memorabilia and collectibles, as well as diversified funds for various projects. 

Launched in 2015, the platform is relatively new and the lineup of investment offerings is rather slim, but investors nonetheless have access to projects from well-known developers, such as Obsidian Entertainment. 

Each project on the platform has a funding goal that must be reached within a specified time frame for the deal to be successful. If the project fails to meet the funding goal, invested capital is returned to the users and the listing is canceled. 

Once a game is successfully funded and developed, it is released to the public. Revenue generated from game sales and other monetization channels is shared between the developer, investors, and Fig.co, according to the terms agreed upon during the campaign. 

Forge Global

Forge Global is one of the largest private share markets that allow investors to buy and sell stocks in pre-IPO companies.

The platform includes hundreds of companies from various industries, which also includes the video game industry. 

Users of Forge Global can buy and sell shares of Valve Corporation, which is a popular developer and entertainment media company behind the famous Steam marketplace, as well as renowned franchises, such as Half-Life, Counter-Strike, Portal, Team Fortress, and Left 4 Dead, among others. 

Forge Global offers relatively high liquidity for the private share market. However, it must be noted that Valve has long dismissed rumors of going public in the near future, which means that investors may have to wait longer to see the company publicly listed on an exchange, if ever. 

Conversely, the more traditional route to gaining exposure to the video game industry is by buying shares in publicly traded video game publishers. 

These companies are present across multiple genres and platforms and are generally well-diversified. However, almost all of them have a number of big-budget titles and franchises that serve as revenue drivers for these companies, which adds a layer of risk in the case of underperformance. 

Investing in video game stocks can help investors take advantage of the expected growth of the industry in the long run. 

For those with limited stock trading experience, a virtual trading account might be the best place to practice. 

Take Two Interactive Software Inc (NASDAQ:TTWO)

Take Two Interactive is a popular video game publisher behind world-renowned franchises through Rockstar Entertainment and 2K Games, which are the developers behind titles, such as:

• NBA 2K - the basketball franchise that holds a near-monopoly on video games related to the sport 
• Red Dead Redemption - the popular open-world franchise centered around the Wild West, with a narrative-driven experience 
• Grand Theft Auto - the open-world action-adventure series known for its immersive gameplay, rich narratives, and detailed environments, which is also the most popular title among Rockstar’s roster 
• Borderlands - published by 2K Games, the Borderlands series is a first-person shooter franchise known for its unique art style, humor, and cooperative multiplayer gameplay, combining the elements of shooting and looting in a post-apocalyptic setting
• BioShock - the BioShock series is renowned for its immersive storytelling, atmospheric settings, and thought-provoking themes. It is a first-person shooter series set in dystopian environments
• Civilization - the Civilization series is a turn-based strategy game franchise. Players guide a civilization from ancient times to the future, making decisions on diplomacy, technology, warfare, and more

As of May 29, 2023, Take Two Interactive had a market capitalization of $23.5 billion, generating $1.45 billion in Q1 2023 revenues, ending the period with a $650 million loss. 

Ubisoft Entertainment SA (EPA:UBI)

Ubisoft is a French video game developer operating offices in France, Canada, and the United States. The company was founded in 1986 and has since become one of the largest and most influential players in the gaming industry. 

Some notable IPs under the company’s name include:

• Assassin’s Creed - the alternative history franchise focuses on action-packed gameplay with stealth, combat, and exploration elements. Assassin’s Creed is also the most successful franchise under Ubisoft’s umbrella
• Far Cry - the Far Cry series is known for its open-world first-person shooter gameplay and exotic locations. Each game presents a different immersive environment and often features engaging narratives
• Tom Clancy’s Rainbow Six Siege - Rainbow Six Siege is a highly popular tactical multiplayer first-person shooter that focuses on teamwork and strategy where players engage in close-quarters combat 
• Watch Dogs - Watch Dogs is an open-world action-adventure series that delves into the concept of hacking and surveillance. Players take on the role of skilled hackers navigating vast urban environments
• Tom Clancy’s Ghost Recon - Ghost Recon is another third-person shooter where players lead a squad of special forces operatives and engage in covert operations
• Tom Clancy’s The Division - Set in a post-pandemic, open-world environment, The Division series focuses on cooperative multiplayer gameplay and RPG elements where players battle to restore their community 
• Just Dance - Just Dance is a rhythm-based dance game that has gained immense popularity, particularly in social and party settings. Players follow on-screen dance moves to various popular songs

As of May 29, 2023, Ubisoft had a market capitalization of EUR 3.3 billion, with EUR 541 million in revenues and a EUR 152 million loss as of Q1 2023. The company is listed on the Euronext Paris exchange. 

Electronic Arts Inc (NASDAQ:EA)

Electronic Arts, commonly known as just EA, is one of the largest video game developers and publishers in the United States. Founded in 1982, the company is behind some notable titles, such as:

• FIFA - published by EA Sports, FIFA is the titular football franchise with hundreds of millions of players around the world. The series releases annual installments
• Madden NFL - Madden NFL is a long-running American football simulation franchise. It offers realistic gameplay, team management features, and licensed NFL teams and players. Madden NFL also releases annual installments 
• The Sims - The Sims is a highly successful life simulation franchise. Players can create virtual characters and control their lives, making decisions regarding relationships, careers, and daily activities
• Battlefield - the Battlefield series is a renowned first-person shooter franchise known for its large-scale multiplayer battles and immersive environments. The franchise often focuses on historical or modern military conflicts
• Mass Effect - Mass Effect is a critically acclaimed science fiction RPG franchise centered around richly detailed character relationships
• Need For Speed - Need for Speed is a long-running racing game franchise that emphasizes high-speed car racing, customization, and a variety of game modes. The franchise has had numerous installments over the years 

EA had a total market cap figure of $34.8 billion as of May 29, 2023. The company generated $1.87 billion in quarterly revenues in Q1 2023 - ending the period with a $12 million loss. 

It should be noted that EA has had quite a bit of backlash in recent years due to the introduction of “loot boxes” to their games. This has led to several lawsuits and scorn from players, who view these actions as a way for the shareholders to get more out of their customer base while offering inferior products. Despite this, EA seems to be trying to get things back on track, and the stock seems stable.

Nintendo Co Ltd (TYO:7974)

Nintendo is a popular Japanese video game company that develops and publishes a number of highly successful game franchises, as well as the Nintendo Switch video game console, which is the third best-selling console in the world. 

The company initially started out as a playing card manufacturer all the way back in 1889 and switched to producing video games hardware and software by the latter half of the 20th century. 

Nintendo has developed a wide range of handheld and stationary consoles over the years, including the Nintendo Gamecube, Nintendo Entertainment System (NES), Nintendo Wii, Nintendo 3DS, and others. 

Some of Nintendo’s most notable intellectual properties include:

• Super Mario - the iconic platformer that has spanned multiple iterations, with the latest release being Super Mario Odyssey, which was released to widespread critical acclaim
• The Legend of Zelda - The Legend of Zelda is an action-adventure franchise known for its immersive worlds, puzzles, and epic storytelling
• Metroid - Metroid is a science fiction action-adventure franchise featuring the protagonist Samus Aran, a bounty hunter equipped with a powered exoskeleton. The series is known for its exploration, non-linear gameplay, and strong female protagonist
• Super Smash Bros - Super Smash Bros. is a crossover fighting game that brings together characters from various Nintendo franchises and other video game series. Players can choose their favorite characters and engage in multiplayer battles
• Mario Kart - Mario Kart is a popular racing franchise featuring characters from the Mario series. Players compete in go-kart races on imaginative tracks, utilizing power-ups to gain an advantage over opponents
• Animal Crossing - Animal Crossing is a life simulation franchise where players live in a village inhabited by anthropomorphic animals. The games are known for their open-ended gameplay, allowing players to engage in various activities like fishing, bug catching, and home decoration
• Donkey Kong - Donkey Kong is a classic arcade franchise that has evolved over the years. It features the adventures of a powerful ape named Donkey Kong, often involving platforming challenges and battles against enemies

These are only a few of the many franchises under Nintendo’s long list of intellectual property. As of May 29, 2023, the company had a market capitalization of JPY 7.8 trillion, or $55.38 billion. 

Activision Blizzard Inc (NASDAQ:ATVI)

Activision Blizzard is one of the largest video game publishers in the United States, which was formed after the merger of Activision and Vivendi in 2008. 

The company has a wide range of popular franchises under its name, including:

• Call of Duty - Call of Duty is a highly successful first-person shooter franchise that has become one of the most popular video game series worldwide. It features intense military combat scenarios in various historical and modern settings
• World of Warcraft - World of Warcraft is a fantasy-themed massively multiplayer online role-playing game (MMORPG) that has had a significant impact on the genre
• Diablo - Diablo is a dark fantasy action role-playing franchise known for its hack-and-slash gameplay and atmospheric storytelling
• Overwatch - Overwatch is a team-based first-person shooter that blends elements of traditional FPS gameplay with hero-based mechanics. Players choose from a diverse roster of characters, each with unique abilities, and participate in objective-based battles
• Hearthstone - Hearthstone is a digital collectible card game set in the Warcraft universe. Players build decks of cards representing characters, spells, and abilities from the Warcraft series and compete against each other in strategic card battles

Activision Blizzard has a large number of IPs under its name and the company had a market capitalization of over $61.8 billion and quarterly revenues of $2.38 billion and a net income of $740 million by Q1 2023. 

It should also be mentioned that the company might be bought out by Microsoft who put in a $68.7 billion bid to purchase Activision Blizzard. While there are still a lot of regulatory hurdles that need to be overcome before the purchase will be finalized, this could be a good thing for investors who pick up some shares before the buyout.

Tencent Holdings Ltd (HKG:0700)

Tencent is a Chinese multinational conglomerate company that operates in various industries, including technology, entertainment, and gaming. It is one of the world's largest video game companies and has made significant investments in numerous game developers and publishers. Some of Tencent's notable video game holdings include:

• Riot Games - Riot Games is the developer of the popular multiplayer online battle arena (MOBA) game League of Legends, which has a significant presence on the global esports scene
• Supercell - Tencent acquired a majority stake in Supercell, the Finnish mobile game developer, in 2016. Supercell is known for its hit games like Clash of Clans, Clash Royale, and Brawl Stars
• Epic Games - Epic Games is the developer of the popular battle royale game Fortnite, as well as the developer of the Epic Games Store, which competes with the likes of Steam in facilitating an online video game marketplace 
• Ubisoft - Tencent holds a minority stake in Ubisoft
• Activision Blizzard - Tencent holds a majority stake in the company 
• PUBG Corporation - Tencent owns a significant stake in PUBG Corporation, the developer of PlayerUnknown's Battlegrounds (PUBG), a highly influential battle royale game that helped popularize the genre
• Klei Entertainment - Tencent acquired a majority stake in Klei Entertainment, the Canadian indie game developer behind titles like Don't Starve and Mark of the Ninja
• Grinding Gear Games - Tencent has a majority stake in Grinding Gear Games, the developer of the action RPG Path of Exile

Tencent is one of the largest and most diversified video game holdings in the world, with a total market capitalization of over $395 billion as of May 29, 2023. 

Roblox Corporation (NYSE:RBLX)

The Roblox Corporation is a gaming company that operates an online platform and game creation system called Roblox. Roblox is a user-generated content platform where players can create and play games created by other users. 

The platform allows users to design their own games using the Roblox Studio tool, which provides an online social space for players to interact with each other. 

Roblox offers a wide range of game modes, including obstacle courses, racing games, simulations, etc. 

In addition to user-generated games, Roblox also offers an in-game economy where users can purchase the in-game currency Robux to buy items and collectibles. 

The company was founded in 2004 and had a total market capitalization of over $24.5 billion as of May 29, 2023. 

CD Projekt SA (WSE:CDR)

CD Projekt is a Polish video game company founded in 1994. The company has become renowned for its Witcher series, adapted from the book series of the same name. 

The stock is traded on the Warsaw stock exchange and its notable products include:

• The Witcher - the Witcher series is a hugely popular fantasy RPG centered around the monster-hunter protagonist Geralt of Rivia and features a richly detailed world, complex characters, and branching narratives
• Cyberpunk 2077 - Cyberpunk 2077 is an open-world action role-playing game set in a dystopian future. Developed by CD Projekt Red, it offers a vast, futuristic city to explore, with players taking on the role of V, a mercenary navigating a cyber-enhanced world
• GOG.com - GOG is a digital video game marketplace with thousands of titles for sale across dozens of subgenres 

CD Projekt is one of the fastest-growing video game publishers in Europe and the company’s market capitalization stood at PLN 12.5 billion (approx $3.2 billion) as of May 29, 2023. 

The company’s revenue reached PLN 329 million, with profits of PLN 134.6 million as of Q4 2022. 

Microsoft Corporation (NASDAQ:MSFT)

The largest company engaged in the video game industry, Microsoft, is also one of the most influential. The company wholly owns and operates Xbox, which is the second largest-selling game console, and also runs an online marketplace. 

A large number of studios under Microsoft’s control are owned and operated by Xbox Game Studios, which include:

• Obsidian Entertainment - Obsidian Entertainment is known for its expertise in crafting narrative-driven RPGs. They have developed games like Fallout: New Vegas, Pillars of Eternity, and The Outer Worlds
• Bethesda Softworks - following Microsoft's acquisition of ZeniMax Media, Bethesda Game Studios became part of Xbox Game Studios. Bethesda Game Studios is known for developing major franchises such as The Elder Scrolls, Doom, and Fallout
• The Coalition - the Coalition is the studio behind the Gears of War series, known for its intense third-person shooter gameplay and immersive multiplayer modes
• Playground Games - Playground Games is known for the Forza Horizon series, an open-world racing game that combines stunning visuals, exploration, and a festival atmosphere
• Rare - Rare has a rich history in the gaming industry and is known for creating beloved franchises like Banjo-Kazooie, Conker, and Perfect Dark. They also developed Sea of Thieves, a multiplayer pirate adventure game
• 343 Industries - known for developing the Halo series, 343 Industries is responsible for continuing the iconic sci-fi first-person shooter franchise originally created by Bungie
• Mojang Studios - Mojang Studios is the studio behind the worldwide phenomenon Minecraft, a sandbox game that allows players to build and explore blocky, procedurally generated worlds
• Ninja Theory - Ninja Theory is known for its character-driven action games with a focus on storytelling and high-quality cinematics. They developed titles like Hellblade: Senua's Sacrifice and DmC: Devil May Cry

While Microsoft owns a multi-billion dollar portfolio of video game companies, it is still only a small branch of the entire business, which added up to a combined market capitalization of over $2.48 trillion as of May 29, 2023. 

Sony Group Corporation (NYSE:SONY)

Another major corporation engaged in the global video game industry is Sony. The company fully owns and operates PlayStation, which is the best-selling console in the world. 

Sony also owns a large number of video game studios, such as:

• Naughty Dog - Naughty Dog is renowned for its critically acclaimed games, including the Uncharted series and The Last of Us series with stunning visuals and storytelling
• Santa Monica Studio - Santa Monica Studio is best known for developing the God of War series
• Guerrilla Games - Guerrilla Games is recognized for the Killzone series and the highly successful open-world action RPG, Horizon Zero Dawn
• Insomniac Games - Insomniac Games has created popular franchises such as Ratchet & Clank and Marvel’s Spider-Man
• Polyphony Digital - Polyphony Digital is the studio responsible for the long-running Gran Turismo series, known for its realistic racing simulations and attention to detail
• Sucker Punch Productions - Sucker Punch Productions is known for the Infamous series and, more recently, Ghost of Tsushima, an open-world samurai adventure set in feudal Japan
• Japan Studio - Japan Studio is a diverse studio that has contributed to a variety of games, including Ape Escape, Gravity Rush, and Bloodborne
• Media Molecule - Media Molecule is known for its creativity-focused games, including LittleBigPlanet and Dreams
• Bend Studio - Bend Studio developed Days Gone, an open-world post-apocalyptic game set in a zombie-infested world

While video games are only a fraction of Sony’s business, they still account for a significant amount of revenue. As of May 29, 2023, Sony had a total market capitalization of over $119.2 billion. 

• The video game industry has been a rapidly growing one for the past few decades and is expected to reach $600 billion by 2030
• Investors can choose between equity crowdfunding platforms for funding individual projects, to investing in stocks of major video game developers and publishers 
• Platforms, such as Fig.co, are geared specifically toward video game investments
• Some major companies, such as Microsoft, Nintendo, and Sony, hold a dominant position in the video game console market
• Many major video game publishers own a number of development studios that focus on certain video game subgenres