Investors looking for stocks that can thrive amid the market's wild swings - and a possible recession ahead - might look at video game stocks such as Electronic Arts Inc. (EA), Activision Blizzard Inc. (ATVI) and Take-Two Interactive Software Inc. (TTWO).

“We anticipate valuation multiples for video game companies to move higher owing to the relative safeඣty of the interactive entertainment industry,” wrote BMO Capital Markets analyst Gerrick Johnson, according to a detailed story in . “The video game industry is quite defensive.”

Video Game Viewership Seen Surging In Recession

BMO says that the value of traditional video game franchises has been overlooked amid the unprecedented success of Fortnite's free-to-play game model.

“Interactive entertainment is one of the most inexpensive forms of entertainment as measured by cost divided by time consumed,” wrote Johnson. “Should an economic downturn take root, we would anticipate video game consumption to grow as those who lose (or are fearful of losing) theirꦅ jobs, may pull back on discretionary spending in other bigger ticket areas.”

The likelihood of takeovers by major buyers such as Apple Inc. (AAPL), Alphabet Inc.’s (GOOGL) Google, Sony and Microsoft Corp. (MSFT) may also serve as catalysts for video game st𝓀ocks, especially Take-Two, the owner of the Grand Theft Auto franchise and Red Dead Redemption 2.

Take Two Interactive

Take Two’s strong balance sheet could make it particularly attractive as a takeover target, according to Johnson, who upgraded the stock to market perform. Cowen analysts are also optimis𒈔tic about Take Two’s new console launches slated for 2020, per another report. While bears have feared competition from Fortnite, Cowen analyst Doug Creutz views the stock as the best play on the next generation of consoles.

Another firm, Jefferies, expects a strong title pipeline and new online game offerings in 2019 to lift the stock nearly 21% from current levels over 12 months, per Barron's.

Electronic Arts

Electronic Arts is als𒆙o seen as performing well, rising on better-than-expected quarterly results and 2019 guidance. JPMorgan’s Alexia Quadrani ꦍwas among the bulls who presented an upbeat outlook after the report, reiterating an overweight rating and lifting her target, per .

Looking Ahead

While video game stocks may benefit from tailwinds this year and in 2020, several have trailed the broader S&P 500 this year. But the big test will be how well these "recession-resistant" stocks perform in a downturn.