Video games are only getting better and more popular among consumers. Worldwide sales of video games are forecast to reach $221.40 billion in 2023, according to market research firm Statista, and continue growing at a compound annual growth rate (CAGR) of nearly 7% through 2027. Today, three billion people around the world are regular gamers, a number that continues to grow at a brisk pace. And people are gaming on an increasingly diverse number of platforms, whether consoles, personal computers, or smartphones. With technological advancements improving the quality of video games on a near-constant basis, the industry continues to be a leader in the entertainment sector, attracting consumer discretionary dollars. Here are the three best video game stocks to buy in 2023.

Nintendo (NTDOY)

Kyoto, Japan-based Nintendo (OTCMKTS:NTDOY) is arguably the best-known video game company in the world, boasting popular game titles and characters such as Mario, Donkey Kong, and Zelda. However, most people are likely unaware that Nintendo is one of Japan’s oldest companies, having been a going concern since 1889. Until the 1970s, Nintendo specialized in trading cards. It pivoted to gaming consoles when video games were in their infancy and never looked back.

There are plenty of reasons to be bullish on Nintendo right now. The company’s Switch console has been a smash hit, having sold 114 million units. Plus, the company continues to churn out hit titles that gamers love, most recently the bestselling Pokémon Scarlet and Pokémon Violet games. Upcoming catalysts for the company and its stock include the release of a new console to replace the Switch that has been around since 2017, as well as an increasing focus on digital game downloads that offer the company higher margins. Nintendo is also monetizing its popular characters and game franchises through a series of upcoming films and the opening of theme parks around the world.

Nintendo’s stock, which trades over the counter in the U.S., could use a boost. Currently trading at $10 a share, the stock has largely been trading sideways for years. In the past 12 months, Nintendo’s stock has declined 9%, and the share price has been down 5% in the past five years. However, 2023 be the year that fortunes change for Nintendo and its shareholders. Thus, it is among the top video game stocks to buy.

Microsoft (MSFT)

Next up is Seattle-based Microsoft (NASDAQ:MSFT), Nintendo’s chief rival when considering video game stocks to buy. The company, co-founded by Bill Gates, has had a consistent winner on its hands with the Xbox console and exclusive game titles such as Halo, Forza Motorsport, and Gears of War. Now, Microsoft is looking to expand on its video game titles through its $68 billion acquisition of Activision Blizzard (NASDAQ:ATVI).

Microsoft has offered to pay $95 a share for Activision Blizzard, which represents a 25% premium over the stock’s current price of $76. Should it succeed in its bid for Activision Blizzard, the acquisition will provide Microsoft with additional hit games such as World of Warcraft, Call of Duty, and Candy Crush. The purchase would also enhance Microsoft’s video game technology and give it lucrative intellectual property rights.

Acquiring Activision Blizzard requires regulatory approval from jurisdictions around the world, and Microsoft has run into some headwinds on that front, notably in the United Kingdom. Some lawmakers in Washington, D.C., have also expressed concerns about the deal. For its part, Microsoft is plowing ahead and says it is determined to close the Activision Blizzard purchase by year’s end.

MSFT stock is on sale right now, down 23% in the past year and trading at $239 a share. The stock has gained 166% over the last five years.

Electronic Arts (EA)

Sports video games are among the most popular titles. Madden NFL and FIFA Soccer are perennial bestsellers. And Redwood, California-based Electronic Arts (NASDAQ:EA) is the leader in sports video games. Beyond its EA Sports games, Electronic Arts also produce hit titles and franchises such as Medal of Honor, The Sims, and Mass Effect.

Additionally, Electronic Arts boasts more than 600 million active users on its EA player network, where gamers compete online in the company’s popular sports titles.

Upcoming catalysts for Electronic Arts include the rumored introduction of a gaming console, as well as virtual reality (or VR) headset and cloud gaming products. The company is also a leader in the fast-growing professional gaming market, where people play and compete for money.

As with Nintendo and Microsoft, there is room for improvement in EA stock as well. The company’s share price is down 4% over the last 12 months and only up 8% in the past five years. The company pays a quarterly dividend that currently yields 0.61% or 19 cents a share. Such dividends are rare among pure gaming companies such as Electronic Arts.

On the date of publication, Joel Baglole held a long position in MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.