The video game industry is in a slump, with sales down by about 12% over last year. As sales slid, so have the stocks of companies such as Activision Blizzard (ATVI), Electronic Arts (ERTS) and Take Two Interactive (TTWO), which recently reported second-quarter earnings.
Each of these companies has created terrific game franchises. Activision Blizzard, for example, is known for Guitar Hero, Call of Duty and Tony Hawk among others, while Electronic Arts is best known for titles such as FIFA 10, Madden NFL 10 and Need for Speed SHIFT.
Take Two Interactive, which tried but failed to break into EA's turf in the sports genre, sells the highly popular Grand Theft Auto game.
With new motion-controlled gaming consoles expected out from Microsoft (MSFT) and Sony (SNE) by the end of the year, investors may want to consider investing in the industry now, before sales for the new consoles pick up towards the holiday season. But which companies will do best?
For the bull and bear cases on Activision Blizzard, Electronic Arts and Take Two Interactive, see the video below.
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