According to several sources, the video game industry is worth around $ 200 billion, making it too big for investors to ignore. But with dozens of state-owned companies and multiple ways to invest in the space, it can be difficult to know where to start. If you’re struggling to figure out where to spend your valuable time researching a business, consider spending some time getting to know Tencent Holdings (OTC: TCEHY).

In this video clip from Motley Fool Behind-the-Scenes Pass, recorded on September 13, Fool.com analysts Sanmeet Deo and Clay Bruning explain why Tencent needs to be on investor radar. Whether it is having significant assets of its own or forging strategic partnerships, this is a company that has a lot to offer.

Deo Sanmeet: I’m going to kick Clay first to give us his pick in this industry.

Clay burnishing: I haven’t done a lot of research on individual mobile game companies. But for me, after catching up with some of my market research, for me, it felt like I had to release a mobile game company or a company at least involved in this space. A few occurred to me, but the one I kept coming back to, and maybe that’s because they’ve been on a very bumpy road due to some regulatory risks in China, is Tencent .

This is a company that is not just a video game or mobile game company but has a ridiculous portfolio of assets. Not just in mobile and video games as a whole, but just in ridiculous areas like autonomous driving, delivery, you name it, they’re there.

But more to the point, some of the portfolio companies that got me excited about the mobile gaming opportunity are Supercell – it’s actually one close to my heart. In high school and during the pandemic I was a heavy Clash of the clans guy. This is one of their mobile games, and I think they have similar games like Clash Royale and some names like that, but it’s one of their holding companies. They have an investment in Activision Blizzard. When you think of Call of Duty wallet and they increasingly tried to be present on mobile devices as well. We’ve talked at length about Epic and they have a substantial investment in Epic. Epic is obviously the creator of Fortnite on mobile, PC and consoles. Then they also have a substantial investment, I think it’s 20% or 30%. They own 20 to 30% of Limited sea, which has only experienced astronomical growth. I think their game they own the maker of Free fire, which I’ve heard of, is like the most downloaded mobile gaming app in the past couple of months. When I think of mobile gaming, I don’t know who will be the winner, but I think Tencent offers a pretty compelling opportunity to branch out into some of these big names, so this would be my choice in the mobile gaming space. .

Deo: Impressive. I was curious when you were talking about Supercell and Clash of the clans, I watched other games. I noticed Brawl stars. It’s a game my son played [laughs] so much during the pandemic, too, Brawl stars. He played anywhere, grabbed my phone and started playing. [laughs] I said, “What are you playing?”

It’s pretty cool. I get all of my gambling investment advice from my son.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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