With the rise of generative artificial intelligence (gen AI) and the metaverse, also known as virtual and augmented reality, the video game market looks poised for greater growth as companies take the immersive factor to the next level. Therefore, in this piece, well talk about these catalysts and use TipRanks comparison tool to analyze two video game stocks (EA and NTDOY) and see which one stands out as a better bet.

Given that there are only so many hours in the day, active entertainment (video games) could begin to cut further into the turf of passive entertainment services (think video and audio streaming) over time, especially as experiences become more profound. www.tipranks.com/compare-stocks/custom

Video Game Market to Benefit from the Metaverse and Gen AI

With Apples AAPL spatial computer (Vision Pro) poised for an early February launch, I believe the way we think about gaming will be changed forever. Though Apple Vision Pro isnt a gaming device per se, I think its just a matter of time before its app store is populated with incredibly profound games and experiences that turn spatial computers (and headsets) from a fun, nice-to-have gadget for rich enthusiasts to a product thats a must-have for your average consumer.

Though video game firms may gradually ease a toe into the waters of virtual reality, game-changing (forgive the pun) products like Vision Pro could make the underlying economics of virtual reality game development much better. Indeed, its hard to justify pouring millions in resources on a game that most people wouldnt have the opportunity to play, given the sky-high hardware requirements (best-in-breed headsets are not cheap, folks).

As headsets become more commonplace in the latter half of the decade, however, I think its a mistake to sleep on gaming companies, which stand to benefit greatly from the Metaverse boom, even if there arent any prominent virtual reality projects in the pipeline currently.

Finally, the rise of gen AI could curb development costs on even the most ambitious projects. Of course, theres sure to be designer and development backlash in response to what gen AI can bring to the video gaming community. Regardless, I view gen AI as a potentially massive catalyst that could drive appreciation over the next five to 10 years.

Without further ado, lets see how the two previously mentioned gaming powerhouses stack up.

Electronic Arts EA

Electronic Arts is a video game firm behind popular sports titles like NHL (National Hockey League), UFC (Ultimate Fighting Championship), Madden, WRC (a racing game), and EA FC (Football Club). Sports fans need to get their fix, and EA has been helping deliver next generation experiences that they crave. Additionally, EAs recent non-sports titles (think Star Wars Jedi: Survivor) are intriguing and were good enough to be nominated at the years video-game awards in two categories.

Though EA may not be the most loved player in the industry, I still think its worth staying bullish on, given its footing in a potentially explosive market.

After flatlining over the past two years, EA stock seems like an intriguing value play (18.1 times trailing price-to-earnings) right here. Looking ahead, the firms poised to launch its much-awaited Plants vs. Zombies 3 title in addition to its annual sports titles.

EA FC, in particular, has done profoundly well and demonstrates that the firm may not need a license to resonate with gamers. All considered, 2024 could be a prosperous year for EA, especially as it gains more traction in the front of virtual reality.

Reportedly, EA Sports WRC will have virtual reality support for PCs. Thats a big deal that could forever change how racing games are played. Arguably, racing was built for virtual reality, and as the franchise evolves in EAs hands, Id bet that EA could become a profound force in the age of spatial computing.

Is EA Stock a Buy, According to Analysts?

EA stock is a Moderate Buy, according to analysts, with 12 Buys and seven Holds assigned in the past three months. The average EA stock price target of $147.32 implies 7% upside potential.

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