Small-cap video game stocks: the indie players

Team 17 is the 1990 lovechild of British publisher 17-Bit Software and Swedish developer Team 7. The studio is most known for its artillery game, Worms, which sold millions of copies in its first year. According to CEO Debbie Bestwick, they knew it was going to be a hit, since they couldn’t stop playing it the moment they got their hands on the game. Indeed, they loved it so much Team 17 went on to make sixteen editions of the game between 1995 and 2010. Today the studio has over twenty Worms games, and its latest release is MetaWorms, a non-fungible token (NFT) project that aims to sell characters from the franchise as digital collectables.

You know how watching people on Twitch drive trucks and fly planes is a thing now? Well, Nacon was around before that was a thing; the French developer owns games like Train Life: A Railway Simulator and Hotel Life: A Resort Simulator. For those not wanting to live in a simulation, Nacon also publishes action-adventure, racing, and sports titles that have generated between 200k and 3m copies worldwide. As well as developing hardware accessories for Sony and Nintendo, it also buys up a lot of “expert development studios” that allow the company to operate as a developer-publisher – giving it coverage of the entire development process.

It’s almost surprising that it took as long as it did for Remedy to go public – 22 years elapsed between its birth and going live on the Helsinki Stock Exchange. Indeed, Remedy has a history of hanging around with big shots. Its notable release Max Payne was published by video game giants Rockstar Games, while it partnered with Microsoft to release Alan Wake in 2010 – a game inspired by Stephen King's novels, Twin Peaks, and ghost towns in the American Northwest. Fun. The studio has lately expanded into a multi-project studio model, allowing it to turn over games quicker. It also has teamed up with Epic Games and Tencent for future releases.

People Can Fly hit the ground running after its 2004 debut release of Painkiller – so much so THQ made a deal with the Polish developer to make Come Midnight. After that was cancelled, however, PCF came under financial trouble until Epic Games stepped in to buy a majority stake in the company, helping them on projects as big as Gears of War: Judgment which was released in 2013. Later that same year, Epic Games rebranded the studio to ‘Epic Games Poland’. The Polish gamers now boast 350 employees in 8 different locations across the globe.

“To have fun is to live.” That’s what you’ll find if you get your teeth sunk into Marvelous’ manifesto. Launched in 1997, the Japanese developer’s most well-known releases are perhaps its Story of Seasons and Rune series. The company’s growth has accelerated of late – only a year after merging with fellow gamers AQ Interactive and Liveware, Marvelous Inc. went live on the Tokyo Stock Exchange. Going forward, the company has plans to render new parts of the gaming map by getting into eSports. Tencent clearly liked the sound of that – scooping up 20% of Marvelous shares for $65m in 2020.

Polish game developer 11 Bit derives from two gaming companies: CD Projekt and Metropolis Software. Apparently, 11 Bit’s ethos is to widen its FOV to include both hardcore and casual gamers, with releases such as Anomaly: Warzone Earth, and This War of Mine proving successful in that regard – the latter of which was praised for its depiction of besieged city warfare and its similarities to the Siege of Sarajevo. While 11 Bit’s latest release, Frostpunk, sold over 250k copies in its first three days, the studio hasn’t released a title since. However, there's plans for a Frostpunk 2, and it's backed with a $21m investment made by the company.

Thunderful finds its roots in a triad of companies that came before it: Image & Form, Zoink, and Guru Games. All Swedish companies, the three of them now rest under one umbrella to produce and publish games crossover between PC, console, and mobile. Notably, the company has teamed up with Lego to produce Lego Bricktales, due to release later in 2022. They seem pretty open to new ideas, too – there’s even a ‘Pitch Your Game’ section on their website.

Before games, FuRyu dabbled in printers, mobile advertisements, photobooths. It really did the rounds before it landed upon video games. But when it brought gaming into the business, it became a public company shortly after. Like so many Japanese game developers, FuRyu deals mostly in RPGs, with many not making it to Western markets. Its corporate philosophy is “creating quality entertainment that brings happiness and fulfilment to people.” Fair enough, we can't argue against that.

Swedish developer Enad Global 7 is happy to tell all of its successes: one only needs to go to its about page to quickly find it’s got 1500 titles under its belt and is home to over 800 employees. The company initially started out as a consultancy firm, helping out here and there to produce games. Since 2017, however, Enad has developed its own games and has Enad been rendering new parts of its business, acquiring several companies to have a total of seven subsidiaries under its wing. Among a wide variety of games it's produced, it has even contributed to the campaigns of mega-titles like Call of Duty and Far Cry.

DONTNOD was founded in Paris in 2008, with some of its team having a history with Criterion Games, Ubisoft and EA. Its 2015 release Life is Strange sold over three million copies and won a host of awards, consolidating DONTNOD’s philosophy of focusing on independent projects. The French company appears dedicated to producing concept-driven, narrative games that play in the spirit of modern indie games. Indeed, DONTNOD boasts that it aims to reinvent itself with every game it produces, making it an unpredictable but potentially exciting prospect as a stock.

Inspired by the Millenium Falcon, the name Nihon Falcom was crafted by founder Masayuki Kato, who founded this Japanese company way back in 1981. Quickly, it became a big name in Japanese RPGs, with most titles being published for computer use only until the early 2000s, when the company branched out to consoles. Perhaps its most successful franchise, the Ys series is still around today, launching on modern consoles to be only a touch behind Final Fantasy in terms of titles released. Apparently Nihon Falcom have a good taste in music, too – Ys is recognised as having one of the best game scores out there.

Starbreeze is a Stockholm company that had a tough ride in the years between its inception and the release of Payday 2, the first video game released by the company to turn the business profitable. Starbreeze has also joined up with names as big as EA – rebooting the Syndicate franchise, albeit to poor sales. Most recently, Starbreeze has gone back to the success of Payday to put a third instalment in motion, set to release in 2023. The Swedish gamers also want to enter the virtual reality space with their own line of VR headsets.

Atari? How is Atari a low-cap video game stock? Don’t ask us, but it is bewildering how the leader of the video game industry in the late 70s and 80s now sits with a market capitalization below $100m. Founded in California, the company rose to the top of the gaming world with the release of the Atari 2600, selling millions worldwide. After the video game market crash of 1983, though, Atari struggled to repeat the success of the 2600, and as of today, it’s better known for its Rollercoaster Tycoon productions. The company recently decided to dabble in the rapidly growing cryptocurrency business, a potentially lucrative but volatile venture.

Farm 51 is a Polish video game developer founded fairly recently in 2005. Initially, the company outsourced its production but scooped up enough funding to launch its own title, NecroVisioN in 2009, followed by a sequel the very next year. Despite its lesser available resources in comparison to leading companies, Farm 51 offers VR technology through its subgroup Reality 51. Its most recent game Chernoblyite has also kept up with the times, supported by the latest big-name gaming consoles in the Playstation 5 and Xbox Series X/S.

Another game developer coming out of Japan, Nippon Ichi is most known for its strategy RPG games, as well as publishing anime. Some of these games include the series Disgaea and Marl Kingdom – the former selling five million copies worldwide in 2021. Though its games are very grounded in Japanese culture and video game tradition, its North American branch of the company, NIS America, allows the company the benefit of a wider market by repackaging and advertising its games for a Western audience.

Tose stands out among these small-cappers in two respects: firstly for its longevity in the industry (founded in 1979), and secondly for its production of household-name games such as Dragon Ball Z and Tetris 2. The Kyoto company has produced over 1,000 games and has worked with various consoles throughout the years. It also doesn’t mind a change of scene, too, producing games that range from Shrek: Hassle at the Castle to Resident Evil Zero – both published in the very same year. Tose is perhaps an unknown entity due to its “ghost developer” status; although it has an impressive CV, it’s hardly ever credited in the games it helps produce.

CAVE, an acronym for “Computer Art Visual Entertainment”, is most known for its success with the shoot 'em up games it has developed since 1995. Indeed, it has even held a Guinness World Record since 2010 for being the most prolific developer in this sector. Otherwise known as “danmaku” shooters (literally translated as “bullet curtain” or “curtain fire”), the Tokyo-based company still produces this genre of games today, publishing its titles on Playstation 4, Xbox One, and Nintendo Switch, as well as adaptions for mobile.

Yuke's is a Japanese video game developer with its hub in Osaka. Earning its cred from its pro wrestler game Power Move Pro Wrestling released on PS1 in 1996, Yuke’s went on to produce the famous WWE 2K game franchise from 2000 to 2018. Sadly for the developer, it was thrown out of the ring for California-based studio Visual Concepts in 2019, but now it’s got a deal with All Elite Wrestling to show its muscle elsewhere. It’s worth noting, too, that its video game entourage is not strictly wrestling – the developer is known to produce first-person shooters and other fighter games.

With its HQ in Japan, CyberStep is one of the bigger small-cappers residing in Asia. The indie developer has been around since 2000 and produces the Cosmic Break series, with the latest title CosmicBreak Universal going live on Steam in 2021. It also owns Onigiri and Dawn of the Breakers – available on widely used consoles like Playstation, Xbox, and Nintendo. The company have recently branched out to the mobile gaming market, boasting millions of downloads.