Broker Berenberg has started regular coverage of the video games and kicked off with a list of shares to buy.
Shares in the sector have pulled back sharply in recent weeks it notes, but that has provided an opportunity to buy into its key picks, it adds.
Buys are Electronic Arts, Embracer Group, Frontier Developments (AIM:FDEV), Team17, Keywords Studios and Ubisoft.
Its only sell is CD Project, which has significantly outperformed the rest of the sector it, adds.
On an industry-wide level, Berenberg notes that Twitch viewership trends remain strong: with player engagement above pre-pandemic levels.
That supports its belief that video game adoption has grown during the pandemic rather than it being a one-off boost.
US consumer spending on video games also remains robust, Berenberg adds.
According to Facteus data, US consumer spending on video games grew 11% yoy in Q3 2021 (Q2 2021 -6% and Q1 2021 +32%) and remains 50% higher than Q3 2019.
Shares in UK-listed Keywords rose 3% to 3,066p and Frontier Developments (AIM:FDEV) by 1.2% to 2,545p.