Better Christmas Gift: GameStop Stock Or Latest Video Game?

Video games and video game consoles have remained popular gift ideas for the Christmas holiday for many years, with the holiday helping to provide a boost to the overall gaming sector.

Here's a look at whether parents and loved ones would have been better off buying a video game or stock in leading video game retailer GameStop Corporation GME last Christmas and over the last five Christmas holidays.

What Happened: GameStop is one of the most popular retail destinations for people looking for video game gifts during the holidays. The company has also had one of the most popular stocks in recent years thanks to a historic short squeeze in 2021 and the notoriety of being a meme stock.

A visit to GameStop around the holidays would find many new release games carrying a $69.99 retail price.

While children likely prefer an item like a video game that carries the instant gratification of being able to play it on Christmas Day and in the subsequent days, there are other gifts that might hold their value longer.

Video games often lose value over time as new versions of sports games come out or sequels to video game franchises. The release of new consoles over time often diminishes the value of older video games as well.

Another gift idea is giving the stock of public companies, but most kids or younger relatives might not understand the value of an investment and potential gains over the years.

Here's a look at the comparison between buying a video game versus buying stock.

Read Also: GameStop Q3 Earnings: Revenue Miss, $4B+ Cash, No More Offerings Planned In Fiscal Year

Stock Instead of Game: While many kids would have been happy with the latest video game last Christmas, it turns out they might be wishing that they got GameStop stock instead.

A new video game cost $69.99 last Christmas, while GameStop stock traded at a high of $17.20 on Dec. 22 last year, the last trading day before Christmas.

The same $69.99 used for a video game could have bought 4.07 GME shares. Based on a price of $30.80 at the time of writing, the GameStop shares would be worth $125.36 today, up 79.1%.

While the GameStop stock rose in value, chances are the $69.99 video game is now worth less than half of its original value due to being opened, used, and somewhat outdated.

Going back to past years, here's a look at how the same $69.99 invested in GameStop stock would have performed.

• 2019: Price on Dec. 23 $1.52, 46.05 shares with $69.99 investment, $1,418.34 today, +1,926.5%
• 2020: Price on Dec. 23 $5.59, 12.52 shares with $69.99 investment, $385.62 today, +451.0%
• 2021: Price on Dec. 23 $38.75, 1.81 shares with $69.99 investment, $55.75 today, -20.3%
• 2022: Price on Dec. 23 $20.62, 3.39 shares with $69.99 investment, $104.41 today, +34.4%

Add in the 2023 investment and over the past five Christmas shopping seasons, the investment would look like this:

• $349.95 invested in GameStop instead of video games = $2,089.48 today, +497.1%

It's hard to predict if GameStop stock will trade higher in 2025 and if investing in the stock this Christmas will perform better than a video game. With a price of $30.80 today, the $69.99 investment used for stock instead of video games could buy 2.27 GME shares.

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• GameStop Rockets As Roaring Kitty Returns To X: What Does His Tweet Signal Ahead Of Q3 Earnings?

This article was previously published by Benzinga and has been updated.

Photo: Shutterstock