Though people are gradually returning to outdoor activities, the demand for video games, which has grown significantly amid the pandemic, is not expected to decline. Rising competition in the industry has been compelling companies to develop and add captivating games to their platforms to maintain their user bases amid the availability of increasing entertainment options with the economic reopening and elimination of social distancing mandates. So, though both Playtika (PLTK) and Skillz (SKLZ) are well-positioned to capitalize on the industry tailwinds, let’s find out which of these stocks is a better buy now.Playtika Holding Corporation (PLTK) and Skillz Inc. (SKLZ) are two prominent players in the video gaming industry. PLTK is an Israel-based digital entertainment company that develops, publishes, and distributes its mobile games to customers worldwide through various web and mobile platforms and its proprietary platforms. SKLZ is a San Francisco concern that delivers a mobile game platform that hosts tournaments and competitions, serving and connecting game developers and end-users worldwide.
Expanding their monthly active user bases amid the pandemic has helped companies in the video game industry generate huge profits. The launches of Microsoft (NASDAQ:MSFT) Corporation’s (MSFT) Xbox Series X/S and Sony (NYSE:SONY) Corporation’s (SONY) PlayStation 5 in late 2020, along with Netflix, Inc.’s (NASDAQ:NFLX) expansion plans into video games, has been incentivizing companies to develop captivating video games to compete and maintain their user bases in response to peoples’ desire to return to outdoor entertainment alternatives. The global mobile gaming industry is projected to grow at an 11.5% CAGR to $153.50 billion by 2027. Rising investor optimism in the industry is evident in the Global X Video Games & Esports ETF’s (HERO) 14.6% returns over the past nine months. So, both PLTK and SKLZ should benefit from the industry tailwinds.
In terms of their past three months’ performance, SKLZ is a winner with marginal gains, versus PLTK’s negative returns. But, which of these stocks is a better pick now? Let’s find out.