Investors are interested in Riot Games because of its massive multiplayer online game (MMOG), League of Legends, with over 115 million monthly players. The game is so popular that teams compete in 12 international leagues for the annual League of Legends Championship.
Riot Games Stock
You cannot buy Riot Games stock directly because Riot Games is not a publicly listed company. You can buy stock in the company that owns Riot Games, Tencent Holdings ADR (OTCMKTS: TCHEY), as Riot Games is a subsidiary of Tencent Holdings.
Riot Games Stock Price
Riot Games has no stock price because the organization is not listed on any stock exchange. Tencent Holdings, Riot Games’ owner, had a stock price of $47 in 2024, which is 50% lower than its all-time high of $98, reached in February 2021.
Tencent Holdings’ stock price is down because of mounting political pressure in the USA and the continuing Chinese governmental crackdown on excessive technology firms’ profits.
Riot Games Stock Symbol
Riots Games’ stock symbol is the ticker of its parent company, Tencent Holdings. In the USA, Riot Games trades under the symbol OTCMKTS: TCHEY. OTCMKTS means that the stock trades on the Over-The-Counter markets. Tencent stock also trades on the Stock Exchange of Hong Kong.
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Tencent, Epic Games & Riot Games Stock
Tencent’s ownership of Riot Games is in doubt. Political pressure in the United States is Pushing Tencent to sell Riot Games and take a 40% stake in Fortnite developer Epic Games.
The Committee on Foreign Investments in the United States is reviewing Tencent’s ownership of Riot Games and Epic Games. Some American politicians and intellectuals claim Tencent’s ownership of the games companies threatens national security.
3 Top Investment Alternatives to Riot Games
Today’s stock market offers many excellent alternatives to Riot Games and Tencent Holdings. One advantage to these alternatives is they are American companies that are less vulnerable to the growing tensions between the United States and China.
You might consider three great alternatives, considering Tencent Holding’s stock price is 50% lower and the company’s headwinds at home in China and the USA.
These companies trade on US stock exchanges and are some of the best alternatives to Riot Games.
1. Activision Blizzard: Owned By Microsoft
Microsoft is one of the world’s largest gaming companies and the world’s biggest and most famous software company. Microsoft is the fourth-largest gaming company globally, with $11.6 billion in gaming revenues.
Microsoft has recently acquired Activision Blizzard in a prominent takeover. This move grants Microsoft ownership of renowned game franchises like Call of Duty, World of Warcraft, and Candy Crush.
The acquisition strengthened Microsoft’s foothold in the gaming sector and broadened its revenue sources. By securing some of the most prosperous titles in the market, Microsoft gained a competitive edge over other gaming enterprises.
View the Microsoft Chart Live on Trendspider
Xbox has ramped up its game release schedule, introducing several high-profile titles. The launch of games like Starfield in late 2023 has attracted significant attention and contributed to increased engagement on the platform.
Xbox Game Pass continues to be a major driver of growth. The subscription service has seen a substantial increase in subscribers, with projections suggesting it could generate $5.5 billion in revenue by 2025, representing a significant increase from previous years. The addition of new games and exclusive titles has made Game Pass more appealing to gamers.
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Microsoft’s quarterly revenues grew from $38.033 billion on June 30, 2020, to $46.152 billion on June 30, 2021. According to Stock Rover, Microsoft’s revenues grew by 21.35% in the quarter ending June 30, 2021. Microsoft is a pandemic-proof company. It experienced six quarters of double-digit revenue growth between March 31, 2020, and June 30, 2021.
Microsoft is considered a value investment and a growth stock because it generates enormous amounts of cash.
2. Apple Inc. (AAPL)
Most people will not consider Apple a games company. However, the games data platform Newzoo ranks Apple as the third-largest games company in revenue, after Tencent Holdings and Sony.
As of 2024, Apple has reported significant revenue from its gaming segment. In 2023, the company generated approximately $14.8 billion in annual gaming revenue. This figure reflects Apple’s strong position in the mobile gaming market, particularly through its App Store and Apple Arcade services.
The growth in gaming revenue is attributed to the increasing popularity of mobile games and the continued expansion of the App Store’s offerings, which includes both free and paid games. Apple’s focus on enhancing user experience and providing a platform for developers to reach a broad audience has further contributed to this revenue growth.
Stock Rover Research estimates that Apple is still undervalued with a Margin of Safety of +23%.
I consider Apple the best alternative to Riot Games because of its dividend and the enormous amounts of cash it generates. Those seeking an alternative to Tencent Holdings must investigate Apple (AAPL).
3. Take2Interactive Software Inc. (TTWO)
Other game publishers to investigate include Take2games. Take2 publishes games based on many licensed properties, including the National Basketball Association (NBA) and Marvel Superheroes.
See the Take2Interactive Chart Live
Take-Two owns Rockstar Games, which publishes the legendary games franchises Grand Theft Auto and Red Dead Revolver. Grand Theft Auto is one of the most lucrative game franchises ever.
Take-Two Interactive announced its financial results for the first quarter of fiscal year 2024, highlighting a 20% increase in total net bookings, reaching $1.20 billion compared to $1.00 billion in the same period the previous year. This growth reflects the company’s strong performance and popular game releases.
Stock Rover Research estimates that Take2 Interactive is overvalued with a Margin of Safety of -13%, meaning TTWO is not expected to generate enough cash flow to justify its current stock price.
Unlike Apple and Activision Blizzard, Take2 shares pay no dividends. Yet, its shares are more expensive than those stocks.
Riot Games’ owners Tencent Holdings, Activision Blizzard, and Apple show that games are a good investment.
Tencent/Riot Games Stock Value
Tencent Holdings is one of the world’s largest social media and digital content companies.
Tencent’s largest subsidiary is the Chinese social media platform WeChat or Weixin. Statista estimates WeChat has over 1.242 billion users, and over 500 million people use WeChat’s search function every month. Tencent’s other social media solution, the instant messenger QQ, has over 639 million Chinese users.
Tencent is one of the world’s largest fintech companies. TechCrunch estimates WeChat Pay processes over 1.6 trillion yuan ($250 billion) annually. WeChat management claims 240 million people have used its “payments score” feature, which powers consumer credit solutions. WeChat’s enterprise or business version has over 130 million active users monthly.
After Riot Games, Tencent’s most valuable American holding is its 40% stake in Epic Games. Epic Games claims its Fortnite game has over 350 million registered players, and 15.3 million people participated in Fortnite’s largest live event.
Tencent Holdings makes money. The company’s revenues have tripled from 2016 to 2024.
Tencent/Riot Games Stock Dividend
Tencent Holdings (TCEHY) pays dividends, unlike other social media companies. TCEHY shares will pay a dividend yield of 0.73% in 2023. The Tencent dividend payout has been consistent over the last six years.
Riot Games Recent Financial News
In 2024, Riot Games has experienced several significant financial and political developments:
- Workforce Reductions: Riot Games announced layoffs affecting approximately 11% of its workforce, which translates to around 530 positions. This decision aims to streamline operations and refocus the company’s efforts on core development areas. The layoffs have sparked discussions about the impact on the gaming workforce and industry standards (source).
- Financial Performance: Despite the layoffs, Riot Games continues to perform well financially. The company reported strong revenue from its flagship titles, including League of Legends and Valorant, contributing to a robust financial outlook for the year.
- Esports Strategy Adjustments: Riot has made strategic adjustments to its esports operations, particularly concerning its League of Legends esports leagues. The company is focusing on sustainability and profitability in its esports ventures, reflecting broader trends in the industry (source).
- Future Outlook: Riot Games is looking ahead to future game releases and expansions, with plans to enhance its existing titles and introduce new content. The company aims to maintain its competitive edge in the rapidly evolving gaming landscape.
These developments indicate that Riot Games is navigating a complex environment marked by workforce changes, financial performance, and a commitment to social responsibility while preparing for future growth.
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