Unfortunately one video gaming company, Sony has been left out of the party and its shares are actually down since July. As many of us have been hearing, Sony's launch of its new console PS3 looks like a disaster in the making. I am reading reports that at least one analyst at Lazard Capital is saying Sony will deliver only 200,000 PS3's on launch day November 17th and by year end may only ship 750,000 unit in the U.S.
So, not only is the console pricey at $500 to $600 a pop, but they will be scarce as hen's teeth. Get ready for lots of dissappointed kids, teens and shareholders this holiday season. There is even more bad news. Apparently the new PS3 is not delivering on the backwards compatibility it promised. In other words many old Playstation and PS2 games like the popular Guitar Hero from Red Octane aren't working right on the new PS3. This gets worse when you consider that there may not be a lot of titles immediately available for the PS3. So what are you going to play on that new $600 system?
I have been bullish on Nintendo for some time and own shares currently. Still, the Wii console, which will make its debut two days after PS3, is looking like a big winner. At $250 each, Wii's will fly off the shelves of stores like GameStop, Best Buy and Walmart. Analysts are expecting at least 1.2 million units sold in the U.S. this year. I think they will beat that number. Nintendo, which is trying to expand the gaming market via innovative gameplay will also have brisk sales of its DS handheld and games from its Mario franchise and the Legend of Zelda, which is finally due out in the coming weeks.
Another great way to play this year end boom in video gaming is via the game makers, otherwise known as software providers. I own Electronic Arts because it is the blue chip name of the group, but Activision also stands to do benefit as does Take Two Interactive, maker of Grand Theft Auto and a new violent schoolyard game that is apparently great but not for younger kids, named Bully.
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