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2020 has been a year for the books. Our entire way of life changed after lawmakers shut down the country to prevent the spread of COVID-19. Students were required to learn online through Zoom, social interactions outside of one’s house were severely limited, and millions of small businesses were forced to shut down.

Although the virus wreaked havoc on many different corporations across the country, certain industries continued to thrive, including the gaming sector. Earlier this week, Stifel analysts released their 8th annual “holiday preview” report outlining the gaming industry’s surprising year of success so far while also predicting a strong end to the final quarter of 2020.

The gains in the first half of 2020 for the gaming industry can be attributed to the implementation of stay-at-home orders by government officials. Unable to socialize in-person, teenagers and young adults started using the online features of video game consoles as one of the primary ways to interact with friends. Not only does that require a subscription to programs such as Xbox Live Gold, which runs at a minimum of $10 per month, but also often requires everyone to use the same version of the console. Therefore, unit sales of Xbox One and Sony’s Playstation 4 rose.

As we look to the end of the year, Stifel believes that the gaming industry will continue to grow due to the release of new video games. Earlier this month, NBA 2K21 and Madden 21 were released, receiving satisfactory reviews from users. On the other hand, FIFA 21 and PGA Tour 2K21 are expected to be released in the coming months. However, sales for these video games may not meet expectations until Sony and Microsoft release their highly anticipated next-gen consoles this holiday season. Stifel predicts that the Xbox Series X and PlayStation 5 will sell better than that of the previous consoles for each respective company (Xbox One & PlayStation 4).

Stocks such as Activision Blizzard (ATVI), Electronic Arts (EA), and Take-Two Interactive Software, Inc. (TTWO) have experienced good growth in the past year and are expected to end the year on a high note. Stifel is keeping ATVI as their “Stifel Select List" idea and maintains their Buy ratings on all three stocks.

Take-Two Interactive Software, Inc. and Microsoft are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.

Disclosure: At the time of publication, I have no positions in any of the securities mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.