A new generation of hardware (Switch 2 and AI-enabled graphics cards for PCs) is set to usher in the next phase of the gaming cycle, providing a fresh boost to industry growth. The upcoming PS/Xbox cycle and the emergence of new gaming platforms like smart glasses will further fuel growth in the medium term.

The transition to new hardware is historically a boon for game software publishers as consumers eager to test the capabilities of their new machines spend more and as publishers ship more blockbusters to fully take advantage of this rising consumer spending.

Gaming is also poised to be a major beneficiary of the rise of GenAI. First, AI will enhance in-game experiences by personalizing stories to individual users, making them more immersive and engaging.

Second, AI is expected to take assistive technology to a new level, materially reducing development times not only for gaming assets creation but also for music generation and animation, hence materially speeding up the creation of games. It is also a game changer in terms of development costs as it is expected to make creative and development teams much more efficient by letting them focus on complex tasks (design of key avatars/settings, scenario, virtual world mechanics…) and get rid of basic artwork and time-consuming processes.

In the longer term, gaming companies appear at the forefront of the Metaverse revolution, a 3D virtual world that will come with its own economy and monetization opportunities including e-commerce, advertising and marketplace for digital goods.

Video gaming assets should then keep attracting M&A interest from Tech and Media giants seeking to bolster their content library amid the rise of video game streaming and to consolidate their position in the Metaverse.

INSIGHTS

AI/Metaverse: The Smart Glasses Race Is Heating Up

Google has just unveiled a series of partnerships with leading eyewear brands—including Warby Parker, Kering Eyewear, Korean fashion label Gentle Monster, and Chinese manufacturer Xreal—to develop AI-powered smart glasses. The move follows the unexpected success of Meta’s Ray-Ban smart glasses, which have sold over 2 million units since their 2023 debut, with EssilorLuxottica, owner of…

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Gaming: Switch 2 Off To An Impressive Start

Since announcing earlier this month the release details for the Switch 2, Nintendo has had to face several headwinds, including negative reactions to the high price of the console and game titles in the US and Europe ($450/ EUR450 and $70-90, respectively) that cast some doubts about consumer demand, the tariff drama that could have…

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Product Details

NAV & Performance

UBS

ISIN

CH0473580212

Currency

USD

Type

Active Equity

Issuer / Rating

UBS / S&P A+

Inception Date

20.12.2019

Liquidity

Daily