Through TheFLY's Eyes: Video Game Developers
from Theflyonthewall.com














Down, But Not Out

Recently, there has been a lot of bad news coming out of the video-game industry. Last year there was controversy after the discovery of the "Hot Coffee" mod in Take-Two's (TTWO) Grand Theft Auto: San Andreas. This January, Electronic Arts (ERTS) lowered their guidance for the year. Sony (SNE) recently delayed the launch of their PlayStation 3 console to this November, meaning the lean times would likely continue for developers as consumers hold out for their next new video-game console. Then last week, Activision (ATVI) reported a fourth quarter loss on lower sales.

Although all of these various factors are legitimate reasons for concern, at least in the near term, they have also created a good buying opportunity for those investors with some patience. This November, before the critical holiday season, both Sony and Nintendo (NTDOY) are scheduled to release their next-generation consoles, which is sure to relieve a lot of pressure on the industry. Microsoft (MSFT) has already released their offering, the Xbox 360, and the company is expecting to ship 12 million consoles this calendar year. This infusion of next-generation hardware in the consoles should spur another golden age of development and an exponential boost in sales, as consumers snap up the new consoles this holiday season.